Kitron: Q2 2016 - Solid improvement of all key figures

(2016-07-13) Kitron ASA today reported solid revenue growth combined with improved margins and a strong operational cash flow.

Kitron's revenue in the second quarter amounted to NOK 563 million, an increase from 489 million in the second quarter last year.

Operating profit (EBIT) was NOK 33.1 million, compared 22.1 million last year.

Net profit amounted to NOK 21.4 million, an increase from 13.3 million. This corresponds to earnings per share of NOK 0.12, compared to NOK 0.08 last year.

Peter Nilsson, Kitron's CEO, comments:
"This was an all-round strong quarter for Kitron's operations. All key figures improved significantly, both compared to last year and to the preceding quarter. The substantial order backlog underpins our positive outlook for the rest of the year."

* Strong growth in revenue and order backlog
* Improved profitability
* Defence communications order
* Capacity adjustments
* Improved capital efficiency

Strong growth in revenue and order backlog
Kitron's revenue in the second quarter was 15 per cent higher than last year. Growth adjusted for foreign exchange effects was 10 per cent. The Industry sector performed particularly well, with a revenue growth of 37 per cent. As in preceding quarters, revenue within Offshore/Marine continues to fall due to the general downturn in the oil service market. Within the other sectors, growth was solid.

The order backlog ended at NOK 989 million, an increase of 19 per cent compared to last year.

Improved profitability
Profitability expressed as EBIT margin  was 5.9 per cent for the quarter, compared to 4.5 per cent in the second quarter of 2015

Defence communications order
Kitron received an order from Kongsberg Defence & Aerospace AS for military communications equipment, for supplies to an existing contract for deliveries to Hungary. The contract has a value for Kitron of NOK 37 million, and deliveries will take place in 2016 and 2017. Over the last twelve months, Kongsberg has placed orders totalling NOK 157 million to Kitron for advanced tactical communications equipment.

Capacity adjustments
Due to the strong revenue growth, Kitron decided to increase production capacity by investing in two new SMT lines, one in Lithuania and one in Sweden. They will be in place in the fourth quarter 2016 in Lithuania and in the first quarter 2017 in Sweden.

During the third quarter, Norway is adjusting the indirect resources to compensate for the longer-term downturn in the Offshore/Marine sector. In addition, due to short-term reduction of activity and change in product mix to less labour-intensive products, some employees might be furloughed during the third quarter.

Improved capital efficiency
Net working capital was reduced by 7 per cent from the same quarter last year. Operational cash flow was NOK 60.8 million, compared to 48.6 million last year.

Outlook
For 2016, Kitron expects revenue of between NOK 2 050 and 2 250 million and EBIT margin of 5.3 to 6.3 per cent. The growth is driven by increased demand in the Industry and Defence/Aerospace sectors. 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 2:00 p.m. CEST at Kitron ASA's head office, Olav Brunborgs vei 4, Billingstad.

The presentation will be given in English by CEO Peter Nilsson and CFO Cathrin Nylander, and will be distributed through webcast at the same time at the following link: http://webtv.hegnar.no/presentation.php?webcastId=36173695

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 equipment and Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, China and the United States. Kitron had revenues of about NOK 1.95 billion in 2015 and has about 1 250 employees. www.kitron.com

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act).