HMS Networks AB on Tuesday disclosed a substantial improvement in profitability for the fourth quarter, with adjusted operating profit up 64% year-on-year. Adjusted earnings before interest and tax (EBIT) rose to 268 million Swedish crowns from 163 million in the prior-year quarter, lifting the adjusted operating margin to 28.2% from 20.2%.
Net sales in the period increased 18% to 951 million crowns. At the same time, order intake declined 4% to 854 million crowns, a contrast to the stronger sales and delivery performance.
Chief Executive Officer Staffan Dahlström said the end of the year was defined by elevated delivery volumes, citing higher manufacturing capacity in North America and shipments drawn from an earlier order backlog. Those factors contributed to the stronger top-line and margin expansion reported for the quarter.
Reported profit after tax for the quarter was 72 million crowns, down from 75 million a year earlier. The decline was driven by a one-off tax expense of 104 million crowns related to U.S. tax law following HMS Networks' 2024 acquisition of Red Lion. Excluding that tax impact, adjusted profit after tax for the quarter would be 209 million crowns.
For the full year, the company reported growth in both orders and sales. Order intake increased 23% to 3.46 billion crowns while net sales rose 17% to 3.58 billion crowns. Adjusted EBIT for the year climbed to 911 million crowns from 665 million the prior year. Reported profit after tax for the year was 435 million crowns, up from 310 million.
Balance sheet metrics showed improvement as well, with net debt falling to 2.35 billion crowns from 3.28 billion a year earlier. Reflecting the stronger operating performance and balance sheet position, the board proposed a dividend of 4.80 crowns per share, compared with no dividend the previous year.
Separately, HMS completed the acquisition of parts of Molex's industrial communications business on Jan. 2, further expanding its industrial communications footprint.
These results combine a notable rise in adjusted operating profitability and margins, stronger full-year order intake and sales growth, and a reduction in net leverage, while a significant, one-off U.S. tax charge related to the Red Lion deal reduced reported quarterly profit after tax.