Annual report 2008 - Comrod

Business AreasANTENNASSales and marketThe business area achieved revenues of NOK 259.6 million in2008, which represents a strong growth of 52% compared to2007. The newly developed multiband antenna generation hasbeen very well received in the market. The antennas deliveredto Harris Corporation formed part of the growth during 2008.Several new antenna contracts were also secured with othercustomers in 2008. These contracts, together with generallypositive market trends for tactical communication worldwide,enabled us to achieve record revenues for antennas.Production and resultsThe business area’s operating margin for 2008 was 14%,compared to 11% in 2007.The profit margin in 2008 was achieved inspite of a weak USDduring the first three quarters of the year and extensive use oftemporary workers and overtime at the Tau plant. The margins areexpected to gradually improve during 2009 due to the ongoingtransfer of new products to the Hungarian facility.The business area reported an operating profit of NOK 35.4million in 2008, an increase from NOK 18.8 million in 2007. Thefirst orders for the new loop antenna are expected in Q1/Q2 of2009. This product received a high level of attention at severalinternational trade fairs, and is expected to become a mainstay ofthe future growth in this business area.The business area had 146 employees as of 31 December 2008(2007: 118). No occupational injuries resulting in sick leave ormaterial damage were recorded in 2008. The business area’sworking environment is regarded as good.Production processes and waste products do not require anyspecial permits. Waste products are sent to approved disposalsites or recycled. The products do not present a health hazardwhen they leave the company.MASTSSales and marketThe business area achieved revenues of NOK 64.7 million in2008, an increase of 19% on the 2007 level of NOK 54.4 million.The strong growth within the business area partly relates to theincreased use of Line Of Sight (LOS) systems and the Group’simportant contracts with the Thales Group, among others, fordeliveries to the MIDS/Terre programme.Deliveries of masts to the US, Canadian and French armies in2008 also strongly contributed to the growth in revenues. Asbasic market trends are still favourable for masts, the companyexpects to maintain and increase the high level of revenues it hasnow established.Production and resultsThe business area reports an operating profit of NOK 9.5 millionin 2008, compared with an operating profit of NOK 6.8 million in2007. The growth in revenues, together with improved operationsthrough the group-supported projects, has established a basis forprofitability within the business area, and positive growth is thusexpected in 2009 as well.OtherThe business area had 28 employees as of 31 December 2008(2007: 22). No occupational injuries resulting in sick leave ormaterial damage were recorded in 2008. The business area’sworking environment is regarded as good.Production processes and waste products do not require anyspecial permits. Waste products are sent to approved disposalsites or recycled. The products do not present a health hazardwhen they leave the company.INDUSTRIAL PRODUCTSSales and marketAs a result of the continued weak development of insulatorproducts, the company has decided to phase out this activityduring the first half of 2009.The product range within offshore-related products will continueand receive the full attention of the business area’s organization.The operating segment achieved revenues of NOK 29.3 million in2008 compared with NOK 33.0 million in 2007.Production and resultsThe business area reported an operating loss of NOK 1.2 millionin 2008 compared with an operating profit of NOK 2.4 million in2007. As the company gradually phases out insulator productsduring 2009, the margin for this operating segment will improve.OtherThe business area had 25 employees as of 31 December 2008(2007: 31). No occupational injuries resulting in sick leave ormaterial damage were recorded in 2008. The business area’sworking environment is regarded as good.Production processes and waste products do not require anyspecial permits. Waste products are sent to approved disposalsites or recycled. The products do not present a health hazardwhen they leave the company.POWER SUPPLYSales and marketThe business area achieved revenues of NOK 18.1 million in 2008,compared to the 2007 level of NOK 33.5 million. Revenues fromcontracts that have now expired made up a high proportion ofrevenues in 2007 and Power Supply is in a transitional periodbetween contracts and customer networks.Establishing an extended customer base to expand the businessis still the top priority. The company expects to be being awardednew contracts during 2009, and the business area has highgrowth expectations in the medium term within this area. Ahigher number of requests/inquiries were received during secondhalf of 2008.In the second half of the year, the company started to deliver thenew custom-built battery charger to Harris Corporation Inc. Thisis the first strategic power supply contract with this company.Production and resultsThe business area reported an operating loss of NOK 0.7 millionin 2008 compared with an operating profit of NOK 7.5 million in2007. The EBIT margin within the area ended up at minus 4%.This is the result of revenue level being too low. However thegross margins for the general operating segment are acceptable.The Group expects to see improved profitability in Power Supplyas a new customer base is gradually established. The launch ofComrod Communication Group Annual report 2008 27