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Electronics Production | July 13, 2007

PKC increased sales by 31,4%

The PKC Group's net sales in the January-June period increased by 31.4 % on the previous year to EUR 143.6 million (109.3 million). Operating profit was EUR 13.8 million (15.0 million) and profit before taxes was EUR 13.2 million (14.6 million). Diluted earnings per share were EUR 0.55 (0.55).
"The Group continued to grow strongly in both business segments. Thanks to the actions we carried out, we were able to meet the need for increased capacity. With our main customers enjoying increased volumes and as we expanded into new market areas, net sales in our Wiring Harnesses business showed strong growth on the previous year. In spite of the expansion of operations, we achieved a good level of operating profit", PKC's CEO Mika Kari commented.

"In our Electronics business, we racked up significant growth in both contract manufacturing and design. During the latter part of the year, we will invest in starting up operations in China. The ability in the years ahead to offer cost-effective contract manufacturing services in China too will bring an improvement in our position as a partner of the telecommunications and electrotechnical industry. For our customer industries, the development outlook for the latter part of the year remains favourable. We are pushing ahead with actions to boost capacity and improve efficiency in order to meet growing customer needs and to maintain a good level of profitability in coming years as well", he added.

The commercial vehicle market showed growth compared with the same period a year ago. Deliveries by the Wiring Harnesses business to the commercial vehicle industry in Europe and South America were at a high level. Deliveries for other types of vehicle were likewise at a good level. Sales of wiring harnesses and cabling to the telecommunications industry declined somewhat from the same period a year earlier owing to low demand from certain customers in the early
part of the year.

Demand for electronics contract design and manufacturing showed favourable growth in the report period. In the face of a tough competitive situation, suppliers must have cost-effective operational models in place and be able to respond swiftly to customers' changing needs, at home and worldwide.

Consolidated net sales in April-June amounted to EUR 73.7 million (EUR 54.8 million), up 34.4 % on the same period a year earlier. Consolidated operating profit totalled EUR 7.3 million (6.8 million), amounting to 10.0 % of net sales (12.5 %). Depreciation amounted to EUR 1.6 million (1.5 million). Financial income and expenses were EUR 0.2 million negative (0.6 million negative). Profit before taxes was EUR 7.1 million (6.2 million). Profit for the report period rose to EUR 5.4 million (EUR 4.0 million). Diluted earnings per share were EUR 0.30 (0.22).

Net sales generated by the Wiring Harnesses business during the report period were EUR 59.8 million (42.8 million), up 39.7 % on the comparison period. Its share of consolidated net sales was 81.1 % (78.0 %). Operating profit was EUR 5.6 million (5.1 million), or 9.3 % (11.8 %) of the segment's net sales.

Net sales generated by the Electronics business segment rose by 15.5 % to EUR 13.9 million (12.0 million), representing 19.0% of consolidated net sales (22.0%). Operating profit was EUR 1.8 million (1.8 million), or 12.5 % (14.2 %) of the segment's net sales.

The PKC Group's net sales increased by 31.4 % for the first half on the previous year, reaching EUR 143.6 million (109.3 million). Consolidated operating profit totalled EUR 13.8 million (15.0 million), amounting to 9.6 % of net sales (13.7 %). Aggregate depreciation amounted to EUR 3.7 million (3.0 million). Financial income and expenses were EUR 0.6 million negative (0.4 million negative). Profit before taxes was EUR 13.2 million (14.6 million). Profit for the report period was EUR 9.7 million (EUR 9.9 million). Diluted earnings per share were EUR 0.55 (0.55).

Net sales generated by the Wiring Harnesses business during the report period rose by 36.8 % to EUR 117.9 million (86.2 million). Its share of consolidated net sales was 82.1 % (78.8 %). Operating profit of the Wiring Harnesses business totalled EUR 10.5 million (11.8 million), amounting to 8.9 % of the segment's net sales (13.6 %).

The Electronics business segment saw a rise in net sales of 11.3 % to EUR 25.8 million (23.1 million), accounting for 17.9 % of consolidated net sales (21.2%). The Electronics business segment reported operating profit of EUR 3.3 million (3.3 million), amounting to 12.6 % of the segment's net sales (13.8 %).

The Group's full-year net sales grew in both business segments, and a good level of profitability was maintained. World market prices of raw materials have remained at a high level. We were able to meet increased demand by increasing production capacity. The integration of operations in North America is moving ahead, but the earnings trend has not been in line with expectations. Production volumes at the new factory in Pskov, Russia were increased as planned.

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