Why a fall in operating profit still ended in a net profit

LEFDAL Mine Datacenter AS, a Norwegian company based in Kjølsdalen, reported revenue of NOK 328m in FY2025, up from NOK 172m a year earlier. Operating profit went the other way and fell to NOK 15.0m from NOK 31.8m. The operating margin narrowed by 13.9 pp to 4.6%, against 18.5% in FY2024. Net profit still swung to NOK 36.1m from a loss of NOK 21.8m, so the result below the operating line did the work that operations did not.

Margins usually thin in a year like this when new business is won on price, or when staff and overhead are added before the revenue pays for them. Revenue grew fast from NOK 36.3m in FY2023, and the balance sheet grew with it: total assets reached NOK 1.6bn, while the equity ratio slipped to 9.9%. Cash rose to NOK 297m. The accounts do not show what lies behind the net profit. I would watch the operating line before the bottom one, because it is the one that repeats.