Shares of leading Norwegian defense manufacturer Kongsberg Gruppen ASA (KOG.NO) are down 12% today following the company’s Q2 earnings release. Investors reacted nervously to rising costs, a drop in cash reserves, and a mixed picture of order intake across various business segments. Despite the sharp pullback in Kongsberg’s share price, the sell-off has not spilled over into the broader defense sector. Growth leaders like the UK’s Rolls-Royce (RR.UK) and Germany’s Rheinmetall (RHM.DE) continued to post gains. The market reaction appears to be primarily profit-taking after a strong rally in recent months.
Kongsberg Gruppen – Key Q2 2025 Financial Highlights
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Revenue increased 20% year-over-year to NOK 13.90 billion, up from NOK 11.59 billion in Q2 2024.
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EBIT came in at NOK 1.92 billion, including a one-time gain of NOK 158 million from the sale of its steering gear business.
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Excluding that gain, the EBIT margin rose to 12.8%, compared to 12.5% last year.
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Net income rose to NOK 1.62 billion, up from NOK 1.18 billion, with earnings per share improving to NOK 1.85 (vs. NOK 1.36).
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New orders reached NOK 18.18 billion, compared to NOK 17.28 billion in Q2 2024.
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Order backlog hit a record NOK 138.8 billion, up from NOK 95.56 billion a year ago.
Kongsberg highlighted strong demand across all business segments, with second-quarter operations confirming both robust fundamentals and continued growth momentum. The company emphasized that every division recorded year-over-year revenue growth, supported by:
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Higher deliveries of missile and air defense systems in the defense segment,
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Strong activity in the shipbuilding market within Kongsberg Maritime,
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Rising demand for underwater technologies, spanning both civilian and defense markets.
Defense Outlook
Kongsberg reported solid demand for its defense systems, with several countries indicating plans to procure Kongsberg solutions. Specifically:
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Germany confirmed its purchase of the Joint Strike Missile for its F-35 fighter jets, with the final contract signed at the end of June.
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The company also finalized a strategic joint venture with Thales, combining their tactical communications units. The move strengthens the merged entity’s position in a defense sector seeing rising investment across Europe.
Liquidity and Strategic Developments
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Cash and cash equivalents dropped to NOK 14.39 billion, down from NOK 16.46 billion in the previous quarter.
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Net cash flow was negative NOK 2.08 billion, including NOK 1.78 billion in dividend payments.
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Net interest-bearing debt decreased to NOK -9.07 billion, compared to NOK -11.30 billion in Q1.
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In Q2 2025, the company signed a deal to acquire U.S.-based Sonatech, a specialist in underwater acoustics (subject to regulatory approval).
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Of the NOK 109 billion in defense backlog, NOK 22 billion is scheduled for delivery in H2 2025.
Segment Breakdown
Kongsberg Defence & Aerospace
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Revenue: NOK 6.12 billion (+38% YoY)
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Key contract: NOK 6.5 billion deal for Joint Strike Missiles with Germany (5th country to place an order)
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New orders: NOK 9.84 billion
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Backlog: NOK 109.24 billion
Kongsberg Maritime
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Revenue: NOK 6.39 billion (+7% YoY)
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Offshore vessel solutions accounted for 35% of newbuild orders
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New orders: NOK 7.52 billion
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Backlog: NOK 26.2 billion
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EBIT: NOK 716 million, margin: 11.2%
Kongsberg Discovery
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Revenue: NOK 1.23 billion (+21% YoY), driven by underwater vehicle and mapping system deliveries
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EBIT: NOK 230 million (vs. NOK 143 million YoY)
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New orders: NOK 966 million
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Backlog: NOK 2.92 billion
Chart: Kongsberg Gruppen (D1 interval)
Source: xStation5
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