(2017-10-24) Kitron ASA today reported strong revenue growth in the third quarter.
Kitron's revenue in the second quarter amounted to NOK 535 million, a 17 per cent underlying growth compared to 463 million in the same quarter last year.
Peter Nilsson, Kitron's CEO, comments: "Kitron continues to gain market share. I see this as a validation of the operational improvements over the past years, which have strengthened competitiveness and efficiency. As mentioned before, our margins will wary from quarter to quarter, and the third quarter was affected by restructuring in Norway and a higher share of revenue of products with high material content and therefore lower contribution. However, we remain solidly on track for our 2017 guidance and our strategic ambitions."
Strong revenue growth Kitron's revenue for the third quarter increased by 16 per cent compared to the same period last year. Adjusted for foreign exchange effects, the increase was 17 per cent. Growth compared to the same quarter last year was particularly strong in the Industry market sector. Energy/Telecoms also recorded solid growth.
Profitability affected by restructuring in Norway Operating profit (EBIT) was NOK 29.2 million, compared to 30.1 million last year, a decrease of 3 per cent. Profitability expressed as EBIT margin was 5.5 per cent, compared to 6.5 per cent in the third quarter of 2016. EBITDA was NOK 42.6 million, an increase of 3 per cent compared to last year. Net profit amounted to NOK 16.4 million, a decrease from 17.7 million. This corresponds to earnings per share of NOK 0.09, compared to NOK 0.10 last year.
Solid order backlog The order backlog ended at NOK 1 008 million, an increase of 3 per cent compared to last year. Orders received in the quarter were NOK 535 million.
Improved capital efficiency Net working capital decreased by 10 per cent from NOK 498 million to NOK 448 million compared to the same quarter last year, continuing the trend of decreasing net working capital compared to revenue. Operating cash flow was NOK 22.4 million, compared to 36.4 million in the third quarter 2016.
Investments in the US Over the past years, Kitron has invested in manufacturing capacity and capabilities, ensuring resources that are modern, highly competitive and able to handle expected growth. During the third quarter Kitron has invested in a Surface Mount Technology (SMT) line in Johnstown, Pennsylvania. This site now has capabilities locally to offer a complete solution to customers, spanning from PCBA, to box-build and high-level assembly.
Active management of component availability The demand for electronic components increased in 2017, driven especially by the automotive industry and IoT. However, the electronic components manufacturers' capacity has not increased at the same rate. Kitron has not been markedly affected by this situation during the first three quarters of the year due to the processes and safety stocks put in place with our supply partners. During the fourth quarter, we see that components availability challenges are escalating. However, we do not currently foresee meaningful loss of revenue. We expect some impact on efficiency as production rescheduling is likely to be necessary.
Outlook For 2017, Kitron expects revenue to grow to between NOK 2 150 and 2 350 million. The EBIT margin is expected to be between 5.6 and 6.4 per cent. Revenue is now expected to be in the higher end or slightly above indicated range. The growth is primarily driven by customers in the Industry sector. The profitability increase is driven by cost reduction activities and improved efficiency.
Enclosed in PDF are the quarterly report and the presentation.
The interim report is presented today at 8:30 a.m. CEST. The presentation will be given in English by CEO Peter Nilsson and CFO Cathrin Nylander, and will be webcast at the following link: http://webtv.hegnar.no/presentation.php?webcastId=67382486
For further information, please contact: Peter Nilsson, CEO, tel: +47 948 40 850 Cathrin Nylander, CFO, tel: +47 900 43 284 E-mail: investorrelations@kitron.com
Kitron is one of Scandinavia's leading electronics manufacturing services companies for the Defence/Aerospace, Energy/Telecoms, Industry, Medical devices and Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, China and the United States. Kitron had revenues of about NOK 2.1 billion in 2016 and has about 1 350 employees. www.kitron.com
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
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