Kitron Reports Q4 2022 Record Revenue, Profits, Order Backlog

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Kitron reported fourth-quarter results showing record levels for revenue, profits and order backlog, driven by a strong market and better component availability.

Kitron’s revenue for the fourth quarter was NOK 1 813 million, compared to NOK 949 million last year. The revenue growth reflects underlying growth for all business units, including acquisitions.

Fourth-quarter operating profit (EBIT) was NOK 165.0 million, compared to 52.3 million last year. EBITDA was NOK 203.2 million, compared to 78.4 million last year.

The order backlog ended at NOK 6 098 million, an increase of 116 per cent compared to last year. All market sectors show growth.

Peter Nilsson, Kitron’s CEO, comments, “We are pleased to report positive quarter-over-quarter growth in 2022, thanks to the alleviation of supply constraints. This has allowed us to ramp up production and meet the surging demand from our clients, leading to improved operational efficiency and robust margins in the fourth quarter. Our diverse market sectors continue to experience strong demand, and we anticipate this positive trend to persist in 2023. We are seeing heightened activity among numerous customers, particularly in the defence sector, as they drive growth and expansion.”

Profitability expressed as EBIT margin was 9.1 per cent in the fourth quarter, compared to 5.5 per cent in the same quarter last year.

Profit after tax amounted to NOK 101.2 million, compared to 40.0 million in the same quarter the previous year. This corresponds to earnings per share of NOK 0.52, up from 0.20 last year.

Strong turnaround in second half of year

Full-year revenue of NOK 6 487 million gave an overall increase in revenue of 75 per cent for the year. The revenue growth reflects underlying growth for all business units, including acquisitions.

Operating profit (EBIT) for the year ended at NOK 459.6 million, compared to NOK 240.8 million in 2021, resulting in an EBIT margin of 7.1 per cent, compared to 6.5 per cent. Profit after tax was NOK 287.1 million, up from NOK 152.8 million, corresponding to NOK 1.46 earnings per share, compared to NOK 0.85 in 2021.

Capital efficiency ratios improving

Operating cash flow in the fourth quarter was NOK 63.1 million, compared to NOK 9.0 million in the fourth quarter of 2021. For the full year, operating cash flow was NOK 117.0 million compared to 126.3 million in 2021.

Net working capital was NOK 1 930 million, an increase of 57 per cent compared to the same quarter last year. Net working capital as a percentage of revenue was 26.1 per cent compared to 31.7 per cent last year. Capital efficiency ratios are now improving. Our focus continues to be on improving the supply situation, as well as managing resources, cash and deliverables.

Dividend

The board proposes an ordinary dividend of NOK 0.50 per share (NOK 0.25).

Outlook

Demand continues to be strong, and the EBIT margin and capital efficiency are improving. For 2023, Kitron expects revenues between NOK 6 700 and 7 300 million. Operating profit (EBIT) is expected to be between NOK 450 and 550 million. Revenue and EBIT are now expected to be in the higher end of the ranges.