July 5, 2017 / 7:04 AM / 4 months ago

IBA lowers full year guidance citing project delays

July 5 (Reuters) - Belgian medical equipment maker Ion Beam Applications (IBA) cut its 2017 earnings guidance on Wednesday, as delays in customer’s projects weighed on revenue.

IBA, which makes proton therapy machines to treat cancer, now expects to report 5-10 percent revenue growth and a low to mid-single digit operating margin for 2017.

In May the company lowered its full-year operating margin outlook to 10-12 percent from 11-12 percent and confirmed revenue guidance of 15-20 percent growth.

“For 2017 it’s huge, even if you’re on the midpoint of their revised guidance it’s about a 60 percent cut on EBIT,” ING analyst Giel-Jan Triest said.

The company said that around half of its ongoing proton therapy projects were experiencing delays, while cost cutting measures had taken longer than anticipated to bear fruit. IBA has also faced a number of one-off costs in emerging markets.

“These systems are so big that they actually have to build buildings for them. This is done by third party contractors and here is the delay,” Triest said.

The company said its dividend policy remains unchanged and reaffirmed its confidence in its mid-term goal of attaining a 13 to 15 percent operating margin.

In separate news the company announced the signing of a contract with a proton therapy centre in Virginia worth about 60 million euros. (Reporting by Manon Jacob and Alan Charlish; editing by Jason Neely)

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