Kitron: Sharp rise in EBIT and strong momentum in Defence

Kitron's revenue amounted to NOK 365.8 million in the third quarter of 2012, a 3.7 per cent increase compared with the same period last year. EBIT were NOK 15.4 million, a 67.9 per cent increase compared with same period last year. Operating cash flow for the third quarter was negative by NOK 15.4 million (NOK 8.2 million). Offshore/Marine was the strongest growing market segment with a 71.8 per cent leap in revenues compared to the same quarter last year and the company said it expected this trend to continue. The company said it is also bullish about the prospects in the Defence segment. Major Defence contracts secured Kitron secured two significant contracts with Kongsberg during Q3. Firstly, in August Kitron signed an exclusive manufacturing agreement for electronics modules that are part of the Kongsberg's newly won framework agreement with the US Army for the weapon station Crows. The agreement means that Kitron is the preferred supplier of electronics to Kongsberg Protech Systems. The deliveries under the agreement will come from Kitron's subsidiary in Norway and the newly established operation in the US. For the US factory the CROWS program alone will generate revenue of more than NOK 60 million per annum over the next five years. The total potential under the contract is significantly higher. Secondly, in September Kitron received orders from KONGSBERG related to military communication equipment at a value of NOK 70 million. The deliveries will take place in 2013, 2014 and 2015. Kitron China and Germany reach break-even In the third quarter both Kitron China and Kitron Germany reached breakeven. The factory in China was opened one year ago and has now grown to more than 100 employees and an annual turnover approaching NOK 150 million. Funding obtained to expand operation in Lithuania The ambition is to develop Kitron Lithuania to the main factory for PCB manufacturing in Europe. Kitron will receive up to LTL 4.5 million (NOK 10 million) in funding from the Lithuanian government in relation to expansion investments over the coming years. The plans include an expansion of the factory in Kaunas and the establishment of a distribution centre as described above. The total investment is estimated to NOK 40 - 50 million over the next three years. The funding from Invest Lithuania is expected to cover up to 25% of the total investment.