Kudelski posts modest profit

André Kudelski is the CEO of the Swiss digital broadcast technology company Keystone

The Swiss digital technology company, Kudelski, has reported a first-half net profit of SFr4.48 million ($3.22 million).

This content was published on September 12, 2003 minutes

A recovery in the digital TV market helped the firm recover from a net loss of SFr17.9 million last year.

Kudelski was widely tipped to post an improvement on last year’s first-half result.

The company still made an operating loss of SFr6.36 million in the first six months of the year.

But it beat analysts' expectations - an operating loss of SFr11 million ($7.9 million) had been predicted, compared with a loss of SFr14.2 million during the same period last year.

The Lausanne-based firm, which is active in encoding and access systems for digital satellite and cable television, reiterated that it expected to break even on operating income for the full year.

It said it expected full-year sales of SFr400-430 million, after SFr176.9 million in the first half.

"The top line (sales) is good, especially if you consider there was a six per cent negative currency impact," said Julius Baer analyst, Roger Steiner.

Kudelski said it expected strong growth from next year in revenue and earnings before interest and tax, helped by new contracts.

Break-even promise

A break-even result in 2003 is seen as a vital step for the company as it tries to recover from recent difficulties.

Last year, the firm issued a profit warning as demand for its products fell following a slump in the European digital TV market.

The company saw its share price collapse by four-fifths in 2002, although it has more than doubled this year.

Stocks in Kudelski are currently trading at around SFr38.

In recent months, the company said it sees signs of an improvement in the digital TV market.

Simultaneously, the firm has been expanding. Last month, it concluded a deal with the French consumer electronics firm Thomson to buy MediaGuard from Canal Plus Technologies.

MediaGuard makes devices that control access to digital TV services.

Analysts saw Friday’s announcement as an opportunity to gauge the company’s integration of MediaGuard.

The acquisition will start adding to group earnings in 2004, contributing SFr55 million to operating income by 2007, Kudelski has said.

The firm also won two major contracts to supply conditional access solutions to Sogecable-Via Digital and Kabel Deutschland broadband cable subsidiary, MSG MediaServices GmbH.

swissinfo with agencies

Key facts

Based in Lausanne, Kudelski has a global workforce of around 1,100.
It has offices in Asia, Europe and the United States.
Kudelski was founded in 1951 as a producer of recording equipment.

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