Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kitron ASA (FRA:KP5, Financial) reported close to double-digit growth in the Nordic and U.S. markets, showcasing a strong market presence.
- The company experienced a 60% growth in energy infrastructure expansion, doubling its market share in this sector.
- Defense and aerospace sectors continue to show steady demand, providing stability amidst economic fluctuations.
- Kitron ASA is pursuing regional opportunities in Central and Eastern Europe and Asia, aligning with the global shift towards localized production.
- The company is focusing on new partnerships and intensifying efforts to attract new clients in 2025, building on the successes of 2024.
Negative Points
- There is a slowdown in the European economy, impacting demand in sectors like residential energy solutions and industrial vehicles.
- Revenue for Q3 2024 decreased by 19% compared to last year, reflecting seasonality and lower volumes.
- EBIT for the quarter fell to EUR 10.7 million from EUR 16.2 million last year, with a lower EBIT margin of 7.3%.
- The electrification sector showed a year-on-year decline, particularly in products reliant on housing construction.
- Revenue reductions were significant in CEE and Asia, with declines of 41% and 34% respectively compared to last year.
Q & A Highlights
Q: What is driving the weak margin in the Nordics given the strong year-on-year sales?
A: Cathrin Nylander, CFO: We are planning to grow more in the Nordics, which involves increasing staff and assets. Currently, we are facing inefficiencies due to not fully utilizing our potential, alongside seasonal impacts.
Q: Any updates on the full-year guidance given the stronger than expected EBIT in Q3?
A: Cathrin Nylander, CFO: We are sticking to our current guidance despite the stronger EBIT in Q3.
Q: What is the full potential in terms of revenue per day?
A: Lars Nilsson, CEO: We aim for EUR1 million per day from our Norwegian facility, but currently, we are not fully geared for this level. We are working towards achieving this target.
Q: Can you explain the better-than-guided Q3 margin?
A: Cathrin Nylander, CFO: We ended up higher than expected due to fewer problems than anticipated, despite being lower than last year.
Q: Is the process of moving customers to free up capacity for defense finalized?
A: Lars Nilsson, CEO: We are moving two or three customers to Denmark from Norway. The largest move involves electrification to Poland, expected to finalize next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
