Kitron

Q4 2015 - Improved profitability, strong cash flow

Kitron: Q4 2015 - Improved profitability, strong cash flow

(2016-02-11) Kitron ASA today reported the seventh consecutive quarter of improved profits, accompanied by revenue growth, very strong operational cash flow and a proposed dividend increase.

Kitron's revenues in the fourth quarter amounted to NOK 525 million, an increase from 476 million in the fourth quarter of 2014. Operating profit (EBIT) was NOK 33.6 million, compared to 14.3 million last year.

Net profit amounted to NOK 22.6 million, an improvement from 17.3 million. Operating cash flow was NOK 87.8 million, compared to 12.9 million in the fourth quarter of 2014.

The order backlog was NOK 976 million, an increase of 12 per cent compared to the same time last year.

Kitron will host a Capital Markets Day later today, at which the underlying business improvements will be described in more detail. See separate stock exchange notice for highlights. The event will be webcast, and the presentation material will be made available at Newsweb.no and Kitron's web site.

The Board of Directors of Kitron ASA has decided to propose a dividend of NOK 0.21 per share for 2015 to be resolved at the Annual General Meeting. Last year the dividend was NOK 0.05.

The board has also modified the dividend policy. Kitron will pay an annual dividend of 30 to 60 per cent of the company's ordinary net profit after tax. The range is increased from 30 to 50 per cent. The adjustment is based on a fundamental strengthening of Kitron's business, with improved profitability and successful programs to improve the working capital.

Peter Nilsson, Kitron's CEO, comments:
"In the fourth quarter we continued to strengthen revenue, profit and orders. Also, the actions we have taken to improve operating cash flow have paid off, and I am very pleased that Kitron is now able to pay our shareholders a very competitive dividend."

Continued profitability improvement
Profitability expressed as EBIT as a percentage of revenue was 6.4 per cent for the quarter, up from 3.0 per cent in the fourth quarter of 2014. The substantially improved results are a consequence of increased revenue, improved product mix and increased service sales, both from development and engineering. In general, there is a stronger demand for technical services than last year.

Strong overall revenue growth
Revenue in the market sector Defence/Aerospace increased by 16.2 per cent in the fourth quarter, driven by rollout of military communications equipment orders announced in the previous quarter. Medical equipment increased by 9.5 per cent driven by announced contracts and increased demand from existing customers. Energy/Telecoms was ere up 28.3 per cent, driven by growth in North America for existing customers. Offshore/Marine was down 27.3 per cent compared to the fourth quarter of 2014 due to a very weak market, as previously noted.