Kitron's Profitability Improvement Continues in Q2 2015

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Kitron ASA today reported the fifth consecutive quarter of improved profits, due to a combination of growing revenue and better margins.

Kitron's revenue in the second quarter amounted to NOK 489 million, an increase from 457 million in the second quarter last year.

Operating profit (EBIT) was NOK 22.1 million, compared to 6.9 million last year. The improved results are a consequence of increased revenue and better margins, helped by growing service sales.

Net profit amounted to NOK 13.3 million, an improvement from 3.9 million. This corresponds to earnings per share of NOK 0.08, compared to NOK 0.02 last year.

Peter Nilsson, Kitron's CEO, comments:

"The second quarter confirms that Kitron is continually improving operations and financial results. Important orders, particularly within the Defence and Aerospace sector, give cause for optimism. Going forward, we will implement plans to ensure that operational metrics and margins improve even further."

• Fifth consecutive quarter of improved profits
• Continued strong development in Defence
• Important new orders in Defence and Aerospace
• Cash flow significantly improved

Fifth consecutive quarter of improved profits

The improvements in Kitron's profitability continued in the second quarter. Profitability expressed as EBIT as a percentage of revenue was 4.5 per cent for the quarter, up from 1.5 per cent in the second quarter of 2014. The improved results are a consequence of increased revenue and better margins, where there has been strong contribution from the service sales, both from development and engineering.

Continued strong development in Defence

Revenue in the market sector Defence/Aerospace increased by 56 per cent from the second quarter last year. Energy/Telecom and Industry also grew, while Medical equipment declined slightly. Offshore/Marine was down 45 per cent due to the weak oil service market in Norway.

Important new orders in Defence and Aerospace

During the quarter Kitron has received several significant orders, particularly within the Defence/Aerospace sector, for instance from Kongsberg Defence & Aerospace and from Saab AB (Business Unit Avionics Systems).

Total order backlog was NOK 830 million, compared to NOK 859 million at the same time last year. Growth in Data/Telecom and Medical sectors offset reductions in the Offshore/Marine Sector.

Cash flow significantly improved

Operating cash flow was NOK 48.6 million, compared to 9.5 million in the second quarter of 2014. This is primarily related to the improvement in profit and development of working capital. Working capital reduction actions continue to be in focus.

Outlook

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

About Kitron

Kitron is one of Scandinavia's leading electronics manufacturing services companies for the Defence/Aerospace, 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