Automotive manufacturer Kongsberg Automotive has entered into an agreement with the Lear Corporation to sell almost its entire interior business (interior comfort systems). The sale is made on a company basis for 175 million euros, equivalent to 1.7 billion kroner.
The company announced late Thursday night, about seven hours before Kongsberg Automotive Friday morning reported its third-quarter results.
It shows a pre-tax loss of €1.5 million out of total sales of €267 million. In the same period last year, profit before tax was 0.6 million euros on a turnover of 255 million euros.
Sharpen the wallet
Interior Design Business offers seat climate and comfort systems for all major vehicle manufacturers and seat manufacturers. The buyer, US-based Lear Corporation, has long been a partner of Kongsberg Automotive. When Americans now buy a convenience business, about 3,800 Kongsberg Automotive employees in Asia, Europe and North America will get a new employer.
According to Kongsberg Automotive, selling the company is part of the change the company is making as it will improve its product portfolio. Going forward, the company will focus on couplings, fluid transmission systems, drivelines, chassis and off-road vehicle equipment. The purpose is to maintain and enhance competitiveness, cash flow and growth.
The transaction is expected to be completed in the first quarter of 2022.
Our portfolio decisions are driven by the clear strategy of building on market-leading positions in the business areas in which Kongsberg Automotive is involved. Going forward, we can fully use our most valuable resources in the businesses in which we excel, Kongsberg Automotive Senior Director Joerg Burchheim says in a statement.
Cable works are also sold
Earlier on Thursday, the Norwegian automaker announced that it is also selling its Light Duty Cables (LDC) business to Suprajit Engineering.
The sale was made based on a company value of 37.7 million euros, equivalent to 367 million Norwegian kroner.
LDC produces mechanical and electromechanical cables.
The quarterly report states that the two companies together have an annual turnover of 320 million euros.
The most affected interior
Kongsberg Automotive, like the rest of the auto industry, has been hit by the supply crunch unfolding in global markets as a result of a lack of sufficient components and semiconductors.
A little over a month ago, Kongsberg Automotive announced that it was withdrawing its guidance for this year.
- Revenue is now forecast at 1.1 billion euros, up from 1.13 billion euros previously.
- Adjusted operating profit is expected to be 50 million euros, compared to the previous 60 million euros.
“The revised target numbers reflect the company’s expectations that the semiconductor shortage, combined with higher raw material prices, will continue to reduce auto manufacturers’ production, and that this will continue through the fourth quarter of 2021,” Kongsberg Automotive forecasts in 2021. Sept. .
The message itself is highlighted in the quarterly report. It also states that the interior design business is the area of business most affected.
This year, Kongsberg Automotive fell 33 percent on the Oslo Stock Exchange. If you look back three years, the share is down more than 80 percent. Kongsberg Automotive’s market capitalization is NOK 2.5 billion.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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