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Electronics Production | October 27, 2006

Kitron presents stronger results

Higher turnover and profitable operation have led to progress for Norway based EMS-provider Kitron in the third quarter. The Group increased production for existing customers during the quarter, and increased order backlog provides for further improved operation and profitability.

Kitron's operating income for the quarter was 5.7 per cent higher than during the same period in 2005 and amounted to NOK 350.4 million (NOK 331.4). Due to stronger turnover in the Swedish part of the Microelectronics business area the EMS operation had a slight decrease in turnover, mainly in the Norwegian operation. The reduction is particularly a result of lower activity in the Defence/Marine market segment, but also to some extent in the Data/Telecoms segment. On the other hand the Industry segment and the Medical Equipment segment show increased turnover compared to the corresponding period last year. Optimising working procedures has somewhat slowed Kitron AS' production during the third quarter due to the co-location in Arendal. The optimalisation work will start to pay off for the operation from the start of the fourth quarter. Turnover in the Norwegian EMS operation, Kitron AS, amounted to 53.9 per cent of the Group's combined turnover during the third quarter. The Swedish EMS operation, Kitron AB, represented 14.6 per cent and UAB Kitron contributed 13.4 per cent of the Group's turnover during the third quarter. In total the EMS business generated 80.5 per cent of the turnover during the third quarter whilst during the same period last year it represented 86.8 per cent. Kitron Microelectronics has increased its share correspondingly. The increase is largely the result of a sound market situation for microelectronics. The Group's four market segments are of almost equal size in terms of turnover, which gives the Group good balance and reduced risk. The geographic distribution of the operating revenues shows that Sweden is a larger market than Norway for Kitron. Sweden's proportion of the total turnover is increasing and represented 47 per cent of the total turnover during the third quarter of 2006 against 43 per cent during the same period last year. Norway represents 43 per cent during the third quarter against 49 per cent during the same period last year. Kitron's operating profit for the third quarter was NOK 14.3 million compared to NOK 4.1 million for the corresponding period last year. The progress results from higher turnover and the benefits of the reorganisation Kitron has carried out in the Norwegian operation during the first and second quarters this year. Despite the increase in turnover during the period the total payroll expenses were in line with corresponding expenses during the same period last year. As a result of the increased activity during the third quarter it has not been appropriate to reduce manning as much as the Group warned of in connection with the restructuring in the Norwegian EMS operation. Click here to download the full report (PDF).
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