Kitron: Q4 2014 - Initiatives yield improved profitability

(2015-02-11) Kitron ASA today reported improved profitability for the fourth quarter 2014, demonstrating that cost initiatives are yielding results. The board also proposes to resume paying a dividend.

Kitron's revenues amounted to NOK 476 million, unchanged from the fourth quarter of 2013. Operating profit (EBIT) was NOK 14.3 million, compared to 4.3 million last year. In the fourth quarter, one-off costs of NOK 6.9 million were booked, compared to one-off costs of 8.7 million in the fourth quarter of 2013.

Net profit amounted to NOK 17.3 million, an improvement from minus 4.0 million, influenced by both improved operating profit and currency effects on net financial items. Operating cash flow was NOK 12.9 million, compared to 51.5 million in the fourth quarter of 2013.

The order backlog was NOK 868 million, an increase of 21 per cent compared to the same time last year.

The Board of Directors of Kitron ASA has decided to propose a dividend of NOK 0.05 per share for 2014 to be resolved at the Annual General Meeting (AGM). The AGM will be held on 21 April 2015 at 08:30 at Continental Hotel, Oslo. Further details, including ex date, will be included in the notice of AGM.

Peter Nilsson, Kitron's CEO, comments:
"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."

* Important orders in the fourth quarter
* Improved profitability in the fourth quarter
* Full year profitability improvement
* Kitron invests in its Arendal operations

Important orders in the fourth quarter
Kitron AS, in Arendal, Norway, received orders from a leading company within the offshore industry. The orders had a value for Kitron of NOK 25 million and helps secure the revenue in 2015. This is important as the offshore sector is experiencing reduced order intake.

Kitron ASA's subsidiary Kitron AB, in Jönköping, Sweden, signed a three-year frame agreement with Speed Identity AB 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.

Improved profitability in the fourth quarter
The EBIT margin was 3.0 per cent in the fourth quarter, compared to 1.8 per cent in the preceding quarter and 0.9 per cent in the fourth quarter of 2013. The main reason for the improvement was lower payroll expenses.

Full year profitability improvement
For the full year Kitron's revenues amounted to NOK 1 751 million, an increase from 1 632 million in 2013. Operating profit for the year was NOK 30.0 million, up from 25.1 million, resulting in an EBIT margin of 1.7 per cent, an increase of 0.2 percentage points compared to last year.

Kitron invests in its Arendal operations
In December, it was announced that Kitron AS will move its operations from Hisøy to Kilsund. Both locations are in Arendal, Norway. 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 investments estimated at NOK 45 million in order to upgrade and expand the Kilsund facility and increase the efficiency of the Arendal operations. 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.

Outlook
For 2015, Kitron expects growth and a clear improvement in profitability. However during first quarter the revenue outlook is slightly down sequentially due to seasonality. Growth is driven by increased demand in Defence sector for US and Norwegian markets, as well as increases in Energy/Telecoms and Industry. Offshore/Marine will have reduction due to oil service market in Norway.

Enclosed in PDF are the quarterly report and the presentation.

The interim report is presented at 08:30 a.m. CEST at Kitron ASA's head office, Olav Brunborgs vei 4, Billingstad.

The presentation will be given in English by CEO Peter Nilsson and CFO Cathrin Nylander, and will be distributed through webcast at the same time at the following link: http://webtv.hegnar.no/presentation.php?webcastId=19994877  

For further information, please contact:
Peter Nilsson, CEO, Tel: +47 948 40 850 or e-mail: peter.nilsson@kitron.com
Cathrin Nylander, CFO, Tel: +47 900 43 284 or e-mail: cathrin.nylander@kitron.com

Kitron is one of Scandinavia's leading electronics manufacturing services companies for the Defence, Energy/Telecoms, Industry, Medical equipment and Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, China and the United States. Kitron had revenues of about NOK 1.75 billion in 2014 and has about 1 200 employees. www.kitron.com

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.