Kitron halts production in Ningbo following lockdown
The authorities in Ningbo, China, have imposed a lockdown in Zhenhai, one of the six districts in Ningbo, due to an outbreak of COVID-19 in the area. Although there are no known cases at Kitron's Ningbo facility, production was halted on December 7 due to the restrictions. The production halt is expected to last two weeks.
Kitron's says in an update that other sites will not be able to compensate for the production halt in Ningbo. The halt in production has led the EMS provider of adjust its outlook for the full year of 2021. For 2021, Kitron has previously indicated a revenue outlook of between NOK 3.7 billion and 3.9 billion (EUR 365 million and EUR 384 million) and an EBIT margin between 6.8% and 7.1%. Revenue is now expected to between NOK 3.65 billion and 3.75 billion (EUR 360 million and EUR 370 million), and EBIT is expected to be between NOK 235 million (EUR 23.2 million) and 255 million (EUR 25.1 million). In the third quarter report, Kitron described demand as very strong. The company says that this is still the case. "If anything, the demand outlook has strengthened further, supporting a positive outlook for 2022, given that the supply constraints gradually ease," the company writes in the update.