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© Elcoteq Electronics Production | August 31, 2011

Elcoteq with operating loss of EUR 38 million (April-June)

Elcoteq recorded net sales of 175.7 million euros between April and June (332.3 million euros in April-June 2010). Operating result totaled -37.8 million euros (-6.9), excluding one off items it was -11.7 million euros (- 3.0).
Elcoteq's Chairman of the Board, Mr. Jorma Vanhanen:

"The second quarter of 2011 was a challenging period for Elcoteq. Operating result was negative as sales continued to decline from the first quarter. Sales decline was resulting from existing customers being extremely careful for outsourcing production to Elcoteq as the customers were concerned about the financial situation of the company. Due to the situation it was also extremely difficult to make new customer deals during the quarter."

Outlook

Elcoteq has no visibility for the outlook for the rest of the year due actions taken by its' lenders and consecutive reactions by suppliers and customers.

© Elcoteq

Fiscal: April - June

Elcoteq recorded net sales of 175.7 million euros between April and June (332.3 million euros in April-June 2010). Operating result totaled -37.8 million euros (-6.9), excluding one off items it was -11.7 million euros (- 3.0). Net sales have decreased significantly from last year. The sales decline was caused by TV sales peak in 2010 during Q2, due to Football World Championship and Sharp KIN phone production was at peak in Q2 in 2010. Also the main AMS customer in Mexico has significantly reduced volumes.

Operating result includes impairments of 27.7 million euros which are relating to discontinuation of adopting going concern basis in preparing of the company’s consolidated financial statements.

The Group’s net financial expense was -7.5 million euros (net financial income 5.2 million euros in April-June 2010). Loss before taxes was -45.3 million euros (-1.7) and net loss totaled -63.1 million euros (-6.5). Earnings per share (EPS) were -1.93 euros (-0.18).

The Group’s gross capital expenditures on fixed assets between April and June were 1.7 million euros (2.6), or 1.0% of net sales (0.8%). Depreciation amounted to 33.1 million euros (7.5). During the review period no main single investments were made.

Cash flow after investing activities was -12.3 million euros (5.3). The Group had 45.1 million euros sold accounts receivable without recourse at the end of June 2011 (3.3 million euros at the end of June 2010).

At the end of June 2011, Elcoteq had cash totaling 40.5 million euros (72.5). The Group’s interest-bearing net debt amounted to 36.4 million euros (76.3). The net debt increased 46% from the first quarter. The solvency ratio was 6.3% (18.7%) and gearing was 2.0 (0.7). Rolling 12-month return on capital employed (ROCE) was - 25.4% (16.8%).

Fiscal: January - June

Net sales in January - June decreased compared to the same period last year, standing at 367.2 million euros (552.9 million euros in January - June 2010). Operating result was –48.9 million euros (-19.8) and excluding one off items –21.3 million euros (-13.6).

Operating result includes impairments of 27.7 million euros which are relating to discontinuation of adopting going concern basis in preparing of the company’s consolidated financial statements.

Income before taxes was -66.2 million euros (61.3). Earnings per share (EPS) were -2.55 euros (1.05). Cash flow after investing activities was -24.5 million euros (-18.0).

Gross capital expenditures on fixed assets in January - June amounted to 4.0 million euros (5.6), 1.1% of net sales (1.0%). Depreciation totaled -38.7 million euros (-17.6).

Balance Sheet, Financing

At the end of June 2011, Elcoteq had cash totaling 40.5 million euros (90.9 million euros at the end of 2010 and 72.5 million euros at the end of June 2010). The company has reduced the 73.5 million euros syndicated committed credit facility to 48.5 million euros agreed in March 2011.

The Credit facility was fully utilized and matured on June 30, 2011. Due to tight liquidity situation the Company was not able to repay the remaining 48.5 million euros outstanding under the facility on its maturity (30 June 2011).

At the end of March, the Group’s interest-bearing net debt amounted to 36.4 million euros (76.3). The solvency ratio was 6.3% (18.7%) and gearing was 2.0 (0.7). Rolling 12-month return on capital employed (ROCE) was - 25.4% (16.8 %).

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January 22 2018 4:33 pm V9.2.1-2