ARENDAL, NORWAY -- Kitron today reported second quarter revenue fell 4.5% year-over-year on currency effects as the EMS firm recorded record order backlogs.

The EMS company's revenue for the period ended Jun. 30 was NOK 994 million ($92 million) as underlying revenue growth of 5% offset by negative currency effects of about 10%.

Second quarter operating profit (EBIT) was NOK73.1 million, down 16.9% from last year. EBITDA fell 14% to NOK97.5 million. Profit after tax was NOK49.5 million, down 23% from the previous year. 

Operating cash flow was NOK109.3 million, compared to 5.5 million last year. Net working capital decreased 2% to NOK1.03 billion.

Profitability expressed as EBIT margin was 7.4% in the quarter, down 110 basis points from last year. The EBIT margin is at the top end of the company’s guidance for 2021, and in line with the strategic target path, although lower than last year, when there where economies of scale due to exceptional volumes within medical devices.

Order backlog ended the period at NOK2.29 billion ($263 million), up 9% from a year ago, reflecting strong total demand situation within IOT and warehouse automation. Adjusted for currency effects, order backlogs increased 13%. Backlog increaseds in the electrification, connectivity and industrial sectors and declined in defense/aerospace. As expected, the order backlog within medical devices has gradually been normalized. 

In a press release, Peter Nilsson, CEO, Kitron, said: "Despite currency headwinds, Kitron had another solid quarter. Other market sectors have picked up the slack as the Corona-related demand surge within medical devices ebbed. The underlying growth and profitability is on track for our annual guidance and strategic ambitions, the record-high order backlog and very strong demand in several market sectors make us confident in the last half of the year."

The electrification, connectivity and industrial sectors showed strong growth, while revenue declined within defense/aerospace. As expected, revenue within medical devices has gradually normalized after the pandemic-related demand surge during 2020.

The general material supply situation continues to be a challenge to deliveries. Kitron expects some relief during the fourth quarter and further relief during the first half of 2022.

For 2021, Kitron expects revenue between NOK3.9 billion and 4.2 billion. EBIT margin is expected to be between 6.8 and 7.4%. The outlook for 2021 implies that Kitron is back on its long-term trajectory for revenue and profitability after exceptional growth in 2020, largely driven by Corona-related demand within the medical devices sector. Growth is driven by connectivity, electrification and indutrial sectors, offset in part by flattening medical device demand and slightly lower defense/aerospace.