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Electronics Production | April 20, 2007

PKC to increase result

The PKC Group's net sales in the January-March period increased by 28.3% on the previous year to EUR 70.0 million (54.5 million in Jan.-Mar. 2006). Operating profit was EUR 6.5 million (8.2 million) and profit before taxes was EUR 6.1 million (8.4 million). The diluted earnings per share were EUR 0.24 (0.33).
Mika Kari, President and CEO said “The business acquisition in North America and growth in demand led to a substantial increase in our net sales. Operative profitability maintained at a good level despite the increased prices of raw materials and the start-up costs of new factories, which burdened the operational result in comparison with the comparison period.

With our key electronics customers increasing their operations in Asia, we plan to start an electronics business in China during the current year. To complement our cost-effective production in Europe, we will be able to offer similar contract manufacturing services in China as well in the future."

The commercial vehicle market grew over the same period last year. The Group's deliveries to the truck industry grew significantly during the first three months, mirroring our customers' volume growth. The sales of wiring harnesses for other vehicles and machinery grew due to the acquisition of the North American operations and larger orders from customers. The sales of wiring harnesses and cabling to customers in the telecommunications and automation industries fell from the same period last year.

The competitive situation in the electronics design and contract manufacturing business has remained stiff, forcing suppliers to adopt cost-effective operating models and to serve customers flexibly. Demand for the Group's electronics contract design and manufacturing had a positive trend during the report period.

The commercial vehicle market is expected to grow over last year. Thanks to good demand of products, delivery volumes to the truck industry are estimated to have a favourable trend. Deliveries of wiring harnesses for other vehicles and machinery are forecast to grow. Deliveries of wiring harnesses to telecommunications and automation industries are estimated to remain at the same level as before. The full-year net sales of the Wiring Harnesses business are expected to grow even if the additional net sales from the companies acquired in North America are not taken into account.

The electronics contract design and manufacturing market is estimated to maintain its present level, with the competitive situation remaining tough. The net sales of the Electronics business are expected to grow over the previous year. The PKC Group is preparing to start the procurement and contract manufacturing of electronics components in China.

CFO Marko Karppinen's employment with PKC Group Oyj has ended on 31 March 2007. Sami Klemola (36), M.Sc. (Admin.), LL.M., will take over the CFO's tasks as from 1 May 2007. His responsibilities will include Group finance and administration.

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