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Electronics Production | November 12, 2007

Elektrobit's sales grew in Q3

During the third quarter of 2007, Elektrobit continued to follow the strategic path as defined in the spring 2006. Elektrobit has focused its business operations and concentrates on clear growth businesses in the Automotive and Wireless Business Segments.
Elektrobit's net sales grew steadily and amounted to EUR 35.3 million for third quarter (an increase of 5.3% compared to second quarter of 2007 of EUR 33.5 million; an increase of 27.7% compared to the corresponding period of 2006 of EUR 27.6 million).

The operating loss totalled to EUR -4.0 million (EUR -6.6 million in second quarter of 2007 and EUR -2.5 million corresponding period of 2006).

During the reporting period Elektrbit balanced its customer portfolio by entering new markets and acquiring new customers. During the reporting period none of the customer shares exceeded 11 per cent of the net sales and in addition, the summarized share of the ten biggest customers was 54 per cent. Elektrobit announced an agreement concerning the development of handset technologies and reference designs for TerreStar's (TerreStar Networks Inc.) upcoming satellite-terrestrial all-IP mobile network.

During the third quarter of 2007 Elektrobit continued significant investments in research and product development in order to develop new business for the company in line with the strategy.

Elektrobit continued the actions to render the company cost structure to correspond with the new focused business setup after the divestments of the Network Test and Production Solutions businesses. Elektrobit has commenced actions to increase the productivity and improve the fixed costs efficiency of such operational activities as facilities, sourcing, logistics, information management and administration.

Comparisons between the Continuing Operations figures for the third quarter of 2007 and the corresponding period in 2006:

The net sales amounted to EUR 35.3 million (EUR 27.6 million; an increase of EUR 7.6 million or 27.7%). The net sales of the Automotive Business Segment were EUR 14.5 million (EUR 10.1 million; an increase of EUR 4.5 million or 44.3%). The net sales of the Wireless Business Segment were EUR 20.4 million (EUR 17.5 million; an increase of EUR 2.9 million or 16.5%).

Operating loss totalled to EUR -4.0 million (EUR -2.5 million) and was distributed as follows: the Automotive Business Segment EUR 0.5 million (EUR 0.5 million), the Wireless Business Segment EUR -5.2 million (EUR -3.0 million) and the other businesses EUR 0.7 million (EUR 0.0 million). Net cash flow from operations amounted to EUR -6.7 million (EUR 1.7 million).

Comparisons between the Continuing Operations figures from January to September 2007 and the figures for the corresponding period in 2006:

Net sales amounted to EUR 99.7 million (EUR 87.1 million, an increase of EUR 12.6 million or 14.5%). The net sales of the Automotive Business Segment were EUR 36.4 million (EUR 27.5 million, an increase of EUR 8.8 million or 32.0%) and the net sales of Wireless Business Segment were EUR 62.6 million (EUR 59.4 million, an increase of EUR 3.2 million or 5.4%).

Operating loss was EUR -17.8 million (EUR -0.8 million, a decrease of EUR 17.1 million) and it was distributed as follows: the Automotive Business Segment EUR -0.3 million (EUR 1.2 million), the Wireless Business Segment EUR -18.7 million (EUR -2.1 million, a decrease of EUR 16.5 million) and other businesses a profit of EUR 1.1 million (EUR 0.1 million). Cash flow from operations amounted to EUR -18.4 million (EUR -0.2 million).

According to the guidance given in conjunction with Q2 results on August 2, 2007, the company expected the sequential revenue growth from the first half of 2007 to the second half of 2007 to be stronger than it was from the second half of 2006 (MEUR 61.0) to the first half of 2007 (MEUR 64.5) and the operating loss in the second half of 2007 was expected to reduce significantly compared to the operating loss of the first half of 2007 (MEUR -13.8).

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