Electronics Production | May 11, 2006
Kitron shows profit
Norway's largest EMS-provider Kitron's operating revenue during this years first quarter amounted to NOK 433.1 million (NOK 379.9 million). The growth in sales, together with the cost reductions following the reorganisation in the Norwegian electronic manufacturing services (EMS) business, has produced profit before tax of NOK 16.1 million.
Kitron's operating revenue increased by 14.0 per cent compared to the first quarter 2005 Turnover in the Norwegian EMS operation, Kitron AS, represented 59.8 per cent of the group's turnover during the first quarter. The Swedish EMS operation, Kitron AB, provided 16.8 per cent of Kitron's turnover. Kitron Lithuania represented 8.6 per cent of the group's turnover in the first quarter. In total the EMS operation provided 84.0 per cent of turnover in the first quarter whereas during the same period last year it represented 88.2 per cent of Kitron's turnover. Kitron Microelectronics provided 16.0 per cent of the group's turnover in the first quarter against 11.8 per cent for the same period last year. The increase is partly a result of higher volumes to established customers in the Norwegian part of the business as well as new sales to customers, particularly in the Swedish operation. Turnover has increased in all market segments, but is greatest for the Defence/Marine segment. Turnover in this segment shows an increase of 25.8 per cent in the first quarter compared to the corresponding period last year. Satisfactory gross margin The gross margin amounted to 39.8 per cent during the quarter. Despite a reduction of 1.8 percentage points from the first quarter last year, the gross margin is considered satisfactory. The change from the corresponding period last year is largely because of changes in the product mix in both EMS and microelectronics. Quarterly variations must be expected. Improved profit before tax Operating profit for the first quarter was NOK 20.6 million and has improved by NOK 21.9 million compared to the corresponding period last year. During the first quarter, net financial costs amounted to NOK 4.5 million, NOK 1.2 million lower than in the same period last year. The reduction is partly because of lower interest-bearing debt and partly because the accounts in the first quarter of 2005 accrued the expenses for renewal of loan agreements. Balance sheet The company's final balance as at 31 March 2006 amounted to NOK 647.2 million against NOK 603.5 million at the same time last year. Group equity was NOK 167.1 million, corresponding to an equity ratio of 25.8 per cent. Capital tied up in inventory represented NOK 255.8 million as at 31 March 2006 against NOK 254.7 million at the same time in 2005. Capital tied up in accounts receivable and other receivables was NOK 197.2 million at the end of the first quarter of 2006. Corresponding capital tie-up at the same time in 2005 was NOK 148.0 million. Sales of accounts receivable represented NOK 168.8 million as at 31 March 2006, against NOK 179.1 million on the same date last year. Group capitalised interest-bearing debt totalled NOK 69.2 million as at 31 March 2006 of which long-term interest-bearing debt amounted to NOK 11.7 million. Capitalised interest-bearing debt at the end of the first quarter of 2005 was NOK 87.0 million. Cash flow from operational activities for the first quarter of 2006 was NOK -73.9 million, against NOK -28.3 million for the corresponding period last year. The reduction is mainly because of increased capital tie-up in accounts receivable and other receivables at the end of the period. The increase of accounts receivable is connected to high degree of invoicing at the end of the period and the group's factoring agreement.