Elcoteq lowers its 2Q and full-year outlook

Elcoteq's previous estimate: "Second-quarter net sales are expected to reach the same level as the first quarter of 2011. Operating income for the second quarter is expected to remain negative while the second half of the year is expected to be profitable thanks to expected higher sales volumes. Due to the lower than expected start to the year and supply chain uncertainties caused by the situation in Japan, operating income for the whole year may not be positive. On the other hand additional business from new customers may have positive impact on the outlook for the second half of the year." The main reason for the change in the outlook is the weaker development in sales due to the delay in securing the long term financing of the company. The result is further heavily burdened by the exceptionally high costs of the current financing. The finalization of the five-year export financing revolving credit facility to be granted by Magyar Export-Import Bank Zrt. to the company's Hungarian subsidiary has been delayed, but is expected to be completed by 30 June 2011. The company is also continuing negotiations with other credit institutions and investors, including the company's current lenders, for refinancing its existing Revolving Credit Facility and for securing new long-term credit facilities as well as new equity or equivalent investments.