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. Last Updated: 07/27/2016

Sitronics Posts Loss on Expansion Costs

Itar-TassA technician at the Sitronics-owned Mikron plant in Moscow examining passes used by the city's metro system.
Electronics firm Sitronics on Monday posted a loss in the first quarter as project delays and overseas expansion drove up costs.

Net loss was $28 million, the company said, without giving year-earlier figures. Revenue rose about 10 percent to $310 million, CEO Yevgeny Utkin said. He said the tendencies of the first quarter would continue in the second quarter.

"Our full-year sales should be in line with our expectations," Utkin said. "We expect a considerable decrease in profitability due to a delay in projects from our customers and increasing competition."

Sitronics, controlled by the Sistema conglomerate, also develops software and makes telecommunications equipment and consumer electronics.

"The second half should be stronger," said Nadezhda Golubeva, an analyst with Aton Capital. The company's ability to win new contracts in the second half "remains the most important issue that will reflect on its future and investor attitude. It is absolutely impossible to predict what contracts it will get."

Sitronics last June bought 51 percent of Intracom Telecom from Greece's Intracom for $162 million, expanding operations to 35 countries.

Utkin declined to specify Intracom's share of the sales of the telecommunications solutions unit, Sitronics's main line of business. He said the firm still expects the unit's full-year revenue to reach the earlier forecast of $900 million. Improving the unit's structure will allow the company to cut costs by $20 million this year.

Sitronics CFO Dmitry Ivanov said the company raised its sales forecast slightly for the information technology and microelectronics units.