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Electronics Production | November 03, 2010

Order intake at Neways continues to increase

Neways Electronics recorded turnover of EUR 66.2 million in the third quarter of 2010, up 52% compared with the same period last year.
Both operational profit and net profit increased for the fifth quarter in a row. The order portfolio increased to EUR 70.8 million as per 30 September 2010, up 5% compared with the end of June. Demand for electronic components and systems was higher across the board. On that basis, expectations for the full year 2010 are positive.

As in the first half of 2010, Neways’ profitability remains under pressure because suppliers cannot always meet the rapid increased sector demand. This results in a certain level of inefficiency along the entire chain. More specifically, Neways can only recharge a part of the extra costs of purchasing and production capacity utilisation, which means cost levels are relatively high to ensure sufficient flexibility towards Neways’ customers.

Capital position

Neways’ financial position as per end of September remains strong. However, the significant increase in order and activity levels put some pressure on working capital.

Outlook

Neways is positive about the developments in the fourth quarter of 2010 and the first months of 2011. In the current quarter, profitability will be under pressure from a shortage of materials and the resultant inefficiency in the chain. However, it is expected that this will be resolved to a large extent in the coming months.

Partly on the basis of the current higher order portfolio, Neways expects turnover to rise to more than EUR 240 million for the full year 2010 and that net profit in the second half of the year will be substantially higher than in the first half of 2010.

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