Page 8 - Kitron Annual Report 2011

Basic HTML Version

8
Kitron annual report 2011
The net cash flow from investing activities in 2011
was minus NOK 50.0 million (minus NOK 49.6 mil-
lion).
The net cash flow from financing activities was NOK
15.9 million (NOK 23.3 million). Kitron enters into
financial leasing agreements when applicable. The
leasing obligation is recognised as debt.
Kitron expects to generate sufficient cash to finance
the operation in the foreseeable future. A positive
cash generation is expected in 2012 as a result of
stable working capital development and improved
profitability.
Balance sheet and liquidity
Total assets at 31 December 2011 amounted to NOK
1 060.2 (NOK 1 015.5 million). At the same time
equity amounted to NOK 436.0 million (NOK 420.6
million) and the equity ratio was 41.1 per cent (41.4
per cent).
Inventories increased by NOK 21.5 million during
2011 and amounted to NOK 346.8 million at the end
of the year (NOK 325.3 million). Inventory turns went
down from 4.2 to 3.8. The increase in inventory is
partly explained by the build up of inventory in relation
to the establishment of the new operations in US and
China. Accounts receivable amounted to NOK 360.8
million at the end of 2011 (NOK 352.7 million). Over-
due receivables are low and credit losses have been
small during 2011.
At 31 December 2011, the group’s interest-bearing
debt was NOK 299.1 million (NOK 264.0 million).
The debt is mainly related to factoring and financial
leasing.
Cash and cash equivalents amounted to NOK 50.9
million at the balance sheet date (NOK 48.2 million).
NOK 19.2 million of this amount was restricted de-
posits (NOK 18.8 million). The group’s liquidity situa-
tion is satisfactory.
Going concern
There have been no events to date in 2012 that sig-
nificantly affect the result for 2011 or valuation of the
company’s assets and liabilities at the balance sheet
date. The board confirms that the conditions for the
going concern assumption have been satisfied and
that the financial statements for 2011 have been pre-
pared on the basis of this assumption.
Net profit (loss) of the parent company
The parent company Kitron ASA recorded a profit of
NOK 29.7 for 2011 (2010: loss of NOK 19.2 million).
The board of directors proposes the following alloca-
tions for Kitron ASA:
Dividends
NOK
8.6 million
Transferred to other equity NOK
21.1 million
Total allocations
NOK
29.7 million
Free equity after dividends in the parent company
amounts to NOK 27.4 million.
Financial market risk
Kitron’s business exposes the company to financial
risks. The company’s procedures for risk management
are designed to minimise possibly negative effects
caused by the company’s financial arrangements.
The group is affected by exchange rate fluctuations as
a significant share of its goods and services are sold
in foreign currency. At the same time raw materials are
purchased in foreign currency, while the foreign units’
operating costs are incurred in the units’ local currency.
Exchange-rate gains and losses only arise in the period
in which an asset denominated in a foreign currency is
recognised. A larger proportion of revenue than costs
is recognised in NOK and SEK. However, revenue
and costs in foreign currencies are largely balanced
in such a way that the net exchange rate risk is small.
The group does not enter into significant hedging ar-
rangements other than agreements with customers that
allow Kitron to adjust the selling price when the actual
exchange rate on the purchase of raw materials signifi-
cantly deviates from the agreed base rate.
The company is exposed to price risk because raw
materials follow international market prices for elec-
tronic and mechanical components, and because the
company’s goods and services are exposed to price
pressure.