Kitron

Q4 2018 - Strong revenue growth

(2019-02-14) Kitron today reported quarterly figures that strong growth and underlying earnings improvement despite challenges on the component market.

Kitron's revenue for the fourth quarter was NOK 739 million, an increase of 11 per cent compared to last year. The order backlog increased by 16 per cent on a comparable basis. Both figures are all-time highs.

Profitability expressed as EBIT margin was 5.7 per cent in the fourth quarter. Adjusted for one-offs, it was 6.6 per cent.

Cathrin Nylander, Kitron's CFO and acting CEO, comments:
"The fourth quarter showed us continuing to deliver on Kitron's growth strategy. Organic growth was strong, leading to all-time high revenue. At the same time, we announced the acquisition of the EMS division of API Technologies Corp., illustrating our targeted approach to mergers and acquisitions and answering customer demand for a stronger presence in the US market. We expect further progress in 2019, and in March we will announce longer-term ambitions at a capital markets day."

Strong revenue growth
Kitron's revenue in the fourth quarter amounted to NOK 739 million, compared to 668 million in the same quarter last year. Revenue growth compared to the same quarter last year was particularly strong in the Industry market sector. Marine/Offshore is now growing, albeit from a very low level. Defence/Aerospace declined. As previously reported, demand within Defence/Aerospace will fluctuate, and growth is expected to resume at the end of 2019.

Record backlog
The order backlog is noticeably affected by the implementation of the new accounting standard IFRS 15. Without the effect from implementation of IFRS 15, the backlog would have been NOK 1 519 million, which equals a growth of 16 per cent. Due to the IFRS 15 implementation, the booked order backlog ended at NOK 1 335 million.

Early signs of increasing activity among customers in the oil and gas industry have led to a substantial backlog increase in the Marine/Offshore market sector.

Underlying earnings improved, one-offs impact
Fourth quarter operating profit (EBIT) was NOK 42.3 million, compared to 43.1 million last year. EBITDA was NOK 54.6 million, compared to 56.9 million last year. EBITDA and EBIT are negatively affected by NOK 6.7 million of one-off costs relating to the acquisition of the EMS division of API Technologies Corp. All figures below include these one-off costs, unless otherwise noted.