TAUFKIRCHEN (dpa-AFX) - The tensions between Russia and the West continue to swell the order books of the armaments electronics group Hensoldt. Thanks in part to an order for a new air defense system for the German Armed Forces, the company's order backlog reached a record in the first quarter. Sales, on the other hand, declined, as Hensoldt announced on Tuesday in Taufkirchen near Munich. Despite a higher margin in day-to-day business, the radar specialist was once again in the red.

The news was met with some ups and downs on the stock market: The Hensoldt share gained a good one and a half percent in value at times in the morning. The share price then fell by almost three percent. In the early afternoon, the share was one of the biggest losers in the MDax, the index of medium-sized stocks, with a discount of 1.1 percent to 37.88 euros.

In the first quarter, Hensoldt had once again benefited from the armament of Western armed forces. The company received orders worth 665 million euros, almost twice as much as a year earlier. As a result, the order backlog has grown by a good six percent to almost 5.9 billion euros since the turn of the year.

Major orders in the sensor business contributed to this - such as the new air defense system that Hensoldt offers together with the Rheinmetall and Diehl arms groups. There were also orders for the TRML-4D short-range radar, which is also used in the Iris-T SLM air defense system from Diehl Defence in Ukraine.

In the first quarter, Hensoldt achieved sales of 329 million euros, almost three percent less than in the previous year. Nevertheless, earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects grew by almost eleven percent to 33 million euros. At the bottom line, the loss was reduced by around a quarter year-on-year to 15 million euros.

The new CEO Oliver Dorre is confident that Hensoldt will increase its turnover from 1.85 billion euros in the previous year to around 2.3 billion euros in the current year. Money from the so-called special fund for the rearmament of the German armed forces, for which Germany is taking on additional debt, should contribute to this.

Hensoldt's management had initially set a turnover target of around two billion euros for 2024, but raised its forecast at the beginning of April following the takeover of electronics specialist ESG. This should leave 18 to 19 percent of revenue as adjusted earnings before interest, taxes, depreciation and amortization, if business volumes with a low value-added share are excluded.

However, industry expert David Perry from the US bank JPMorgan criticized the Group for its "weak earnings quality". The adjusted key figures defined by Hensoldt did not take into account high special effects. The strong order intake underpins his very optimistic assessment of the armaments boom, Perry wrote. However, there are better opportunities to profit from this.

The analyst also considers the valuation of the Hensoldt share to be too high. Based on the latest share price, the Bavarian company is valued at around 4.4 billion euros on the stock exchange./stw/ag/mne/mis