Electronics Production | February 08, 2008
PKC's net sales grew 26.1% from 2006
Finland based EMS provider PKC has posted Financial Statement 1 January - 31 December 2007. Consolidated net sales grew 26.1% over the previous year, totalling EUR 288.6 million (228.9 million). Operating profit was EUR 28.2 million (24.2 million) and profit before taxes was EUR 25.6 million (22.8 million).
Mika Kari, President and CEO: "Our wiring harnesses manufacturing capacity was expanded in Pskov, Russia and in China. The integration of the North American business operations required more procedures than expected, which burdened the profitability of the Wiring Harnesses business. The integration will be completed during the current year". "In the Electronics business, we increased design resources and were able to boost the share of contract design during the year. The introduction of electronics manufacturing at the unit in China proceeded as planned". The higher degree of uncertainty in the global economy has not been reflected in our key customers' forecasts for 2008. Based on customer forecasts, we expect to see growth in our net sales and to achieve a good operational result. The competitive situation will remain tough as consolidation in our customer sectors and our competition continues. We will increase our investments in developing market areas which, we believe, will enable us to achieve considerable growth in the future.” The Group's wiring harnesses deliveries grew substantially in Europe and South America compared with the previous year, thanks to growth in the commercial vehicles market. The deliveries of wiring harnesses for other vehicles enjoyed a favourable trend. The volume of deliveries in North America was somewhat smaller than expected. The sales of wiring harnesses and cabling to the telecommunications and automation industries remained at the previous year's level but took place largely in the latter part of the year, with final-quarter sales being substantially higher than in the previous year. The growth of electronics contract design and manufacturing exceeded earlier expectations. Investments made by the company's telecommunications customers led to an increase in the volume of design services and demand from the industrial electronics sector also remained strong. Aiming to improve our competitive position, we increased our resources in product development and design, enhanced our production technology and stepped up our production capacity. Consolidated net sales in October-December amounted to EUR 78.1 million (65.6 million), up 19.0% on the same period a year earlier. Consolidated operating profit totalled EUR 6.8 million (3.9 million), accounting for 8.7% of net sales (6.0%). Depreciations amounted to EUR 2.0 million (1.8 million). Financial income and expenses were EUR 1.2 million negative (0.9 million negative). Profit before taxes was EUR 5.6 million (3.0 million). Profit for the report period was EUR 3.3 million (2.1 million). Net sales generated in the report period by the Wiring Harnesses business amounted to EUR 62.0 million (53.6 million), or 15.5% more than in the comparative period. The segment's share of consolidated net sales was 79.4% (81.8%). It generated an operating profit of EUR 4.6 million (2.8 million), equivalent to 7.4% of the segment's net sales (5.2%). Net sales generated by the Electronics business grew 34.9% to EUR 16.1 million (11.9 million). The segment's share of consolidated net sales was 20.6% (18.2%). It generated an operating profit of EUR 2.2 million (1.1 million), equivalent to 13.6% of the segment's net sales (9.3%). Consolidated net sales in the financial year totalled EUR 288.6 million (228.9 million), increasing by 26.1% on the previous year. Consolidated operating profit totalled EUR 28.2 million (24.2 million), accounting for 9.8% of net sales (10.6%). Depreciations amounted to EUR 7.6 million (6.3 million). Financial income and expenses were EUR 2.5 million negative (1.5 million negative). Profit before taxes was EUR 25.6 million (22.8 million). Profit for the financial year totalled EUR 17.6 million (15.7 million). Net sales generated by the Wiring Harnesses business during the report year rose by 26.3% to EUR 230.0 million (182.0 million). The segment's share of consolidated net sales was 79.7% (79.5%). The Wiring Harnesses business reported an operating profit of EUR 18.7 million (17.9 million), or 8.2% of the segment's net sales (9.8%). The Electronics business segment saw its net sales increase by 25.0% to EUR 58.6 million (46.9 million), accounting for 20.3% of consolidated net sales (20.5%). The Electronics business posted an operating profit of EUR 9.4 million (6.4 million), or 16.1% of the segment's net sales (13.5%). Consolidated net sales enjoyed favourable growth in both business areas and profitability remained at a good level. The world market prices of raw materials maintained their high level. We used derivative instruments to hedge part of our future copper requirements. The earnings trend of the North American operations fell below expectations. The Electronics business's new production unit in China was completed according to timetable and it manufactured its first products in December. In Russia, the production volume of the Pskov factory was increased as planned, and production in the extension to the factory will be started early this year.