NGS Group AB (NGS:STO), a provider of healthcare and education staffing based in Sweden, reported revenue on Thursday of SEK 100.3 million (€8.6 million) for the first quarter ended 31 March 2024, a decrease of 29% when compared to the same period a year ago.

According to SKR (Swedish Municipalities and Regions), the Stockholm region reduced its hiring of healthcare personnel in Q4 2023 by 47%. The staffing industry in healthcare also saw a decrease, the group added. This restrictiveness in hiring had impacted the group’s results. NGS Group said the decrease in revenue in healthcare was seen primarily in nursing staff.

On the other hand, in Norway, the group reported revenue growth. The growth was in line with internal expectations for Q1.

NGS Group said recruitment and temporary work decreased during the first quarter due to a continued weak economy. Furthermore, customer project delays (such as subsidiary Source's exclusive 7-year agreement with selection psychologists for government authorities) had a material impact on net sales in comparison to the first quarter of 2023.

EBITDA for the first quarter amounted to a loss of SEK 5.5 million (€0.4 million), compared to a loss of SEK 1.6 million (€0.1 million) the year prior, with an operating margin -5.5% (-1.1% the year prior).

EBIT (operating profit) for the first quarter amounted to a loss of SEK 6.8 million (€0.6 million), compared to a loss of SEK 2.7 million (€0.2 million) the year prior and an operating margin -6.8% (-1.9% the year prior).

EBITDA and EBIT decreases were due to the large declines in revenue in healthcare, primarily nursing staff, which was lower than expected. The negative EBITDA results were linked to continued volume reduction in nurse staffing as well as on continued lower demand in recruitment as a result of the current economy and on customer project delays.

The group added that operations within medical staffing have also been negatively affected by the purchasing restrictions in Sweden with a smaller loss of revenue compared to 2023. However, the loss of revenue has been largely compensated in terms of margin maintenance activities.

CEO Erika Rönnquist Hoh said, “With our extensive efforts, both in strengthening sales and at the same time continuing with the ongoing cost review, I see a good opportunity to turn around the weak result.”

NGS Group shares closed on 25 April at SEK 3.14 (€0.27), down 1.87% on the day. The company has a market cap of SEK 66.30 million (€5.67 million).