Kitron Swings to Q4 Profit
BILLINGSTAD, NORWAY -- Kitron's net profits rose in the fourth quarter despite flat revenues at the EMS company.
Sales were unchanged from last year at NOK 476 million ($63 million) for the period. Net profit rose to NOK 17.3 million, up from a loss of NOK 4 million, influenced by improved operating profits and currency effects. Operating cash flow was NOK 12.9 million, compared to NOK 51.5 million a year ago.
Operating income was NOK 14.3 million, compared to NOK 4.3 million last year. The company took one-time charges of NOK 6.9 million in the period, down from NOK 8.7 million in the fourth quarter 2013. EBIT margin was 3% in the fourth quarter, compared to 1.8% sequentially and 0.9% in the fourth quarter of 2013. The main reason for the improvement was lower payroll expenses.
Order backlog was NOK 868 million, an increase of 21% compared to the same time last year.
Peter Nilsson, Kitron's CEO, said, "While we certainly have more to do, this quarter clearly shows that we are moving in the right direction. Cost initiatives are starting to take effect, and in the fourth quarter all of our business units were profitable. There was also encouraging news on the sales side, and a strong order backlog gives us a good start in 2015."
During the quarter, Kitron AS, in Arendal, Norway, received orders worth NOK 25 million from a leading company within the offshore industry. Also, Kitron AB, in Jönköping, Sweden, signed a three-year deal with Speed Identity for production and related services for its biometric identification systems. The agreement has an estimated value of at least SEK 30 million during the three years, with options of prolonging.
For the year revenues rose 7.3% to NOK 1.75 billion ($229 million). Operating profit was NOK 30 million, up from 25.1 million, and net income rose to NOK 24.2 million, from NOK 8.3 million.
In December, Kitron announced the move of its Arendal operations from Hisøy to Kilsund. Whereas the Hisøy plant is a leased facility, the Kilsund plant is owned by Kitron and was Kitron's main production facility from 1985 until 2005. Kitron will make invest about NOK 45 million to upgrade and expand the Kilsund facility and increase efficiency. The move is expected to take place early in 2016. One-off costs relating to the move are expected to be NOK 6.9 million and were charged in the fourth quarter of 2014.
Kitron guided for growth and improved profitability in 2015. The first-quarter revenue outlook is slightly down sequentially due to seasonality. Growth is driven by increased demand in the defense sector in the US and Norwegian markets, and increases in the energy, telecom and industrial sectors, offset in part by lower demand for offshore/marine products due to the oil market in Norway.
