Kudelski hit by poor emerging markets performance

TV technology outfit Kudelski Group, home of the Nagra and Conax brands, saw its integrated digital TV revenues drop significantly in the first half, with its Conax brand taking a particular hit in emerging markets. The company was also hit by restructuring costs. 

Kudelski’s integrated digital TV revenues dropped by 16.4% in the first half to US$280 million (€246 million). The company said that its digital TV business had been “resilient” in developed markets, but that it saw a sharp drop in emerging markets, with Conax seeing its revenues decrease thanks to its exposure in this segment.

Overall, Kudelski posted revenues of US$446.1 million, down from US$497.2 million, resulting in negative operating income of US$2.2 million compared with an operating profit of US$15.4 million for the same period last year. The company turned in a net loss of US$36.5 million, compared with a loss of US$5.3 million for the prior year period.

The company was boosted by the performance of its cybersecurity division, offset by higher than normal seasonality having an impact on its Skidata public access unit.

Kudelski said it expected the TV business to recover in the second half, driven by additional sales to existing customers, particularly in the Asia Pacific and African markets. Integrated digital TV operating expenses are expected to drop following a restructuring programme earlier this year that saw the Nagra and Conax teams come together and a restructuring of its French operations. Kudelski this week announced the sale of its SmarDTV conditional access module and set-top unit to an affiliate of French CAM specialist Neotion, which it said was in line with its strategy of focusing on core activities.

The company confirmed its full-year financial guidance, with an expectation that operating income will be between US$30 million and US$45 million.