Kitron reports solid second quarter and record high backlog
EMS provider Kitron is reporting a solid second quarter with a record order backlog. Strong growth within other market sectors compensated for the lower demand within Medical.
Kitron's revenue for the second quarter was NOK 994 million (EUR 96.4 million), compared to NOK 1.04 billion (EUR 100.9 million) last year. The EMS provider says that the underlying revenue growth in the second quarter was 5%, as revenue for the first half and second quarter is negatively affected by currency effects compared to last year of around 10%. Profitability expressed as EBIT margin was 7.4% in the second quarter, compared to 8.5% in the same quarter last year. The EBIT margin is at the top end of the company’s guidance for 2021, and in line with the strategic target path, although lower than last year, when there where economies of scale due to exceptional volumes within Medical devices. The order backlog ended at NOK 2.29 billion (EUR 222 million), an increase of 9% compared to last year. "Despite currency headwind, Kitron had another solid quarter. Other market sectors have picked up the slack as the Corona-related demand surge within Medical devices ebbed. The underlying growth and profitability is on track for our annual guidance and strategic ambitions, the record-high order backlog and very strong demand in several market sectors make us confident in the last half of the year," says CEO Peter Nilsson in the report. The company says that it saw strong growth within the Electrification, Connectivity and Industry sectors, while revenue declined within Defence/Aerospace. As expected, revenue within Medical devices has gradually been normalised after the pandemic-related demand surge during 2020. The order backlog increased within the Electrification, Connectivity and Industry sectors, while it declined within Defence/Aerospace. As expected, the order backlog within Medical devices has gradually been normalised. Second quarter operating profit (EBIT) was NOK 73.1 million (EUR 7 million), compared to NOK 88.0 million (EUR 8.5 million) last year. EBITDA was NOK 97.5 million (EUR 9.4 million), compared to 113.8 million (EUR 11 million) last year. Profit after tax amounted to NOK 49.5 million (EUR 4.8 million), compared to 64.3 million (EUR 6.2 million) in the same quarter the previous year. Kitron says that the general material supply situation continues to be a challenge to deliveries. The company does however expect some relief during the fourth quarter and further relief during the first half of 2022.