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Electronics Production | November 15, 2011

Thailand floods delays Thrane & Thrane's maritime products

The severe floods in Bangkok are expected to have an adverse impact on parts of the company's supplies over the next few months.

Severe flooding continues to affect Thailand, including the Bangkok area, where one of Thrane & Thrane's larger suppliers has a production site. The situation has become increasingly critical during the past week, the company said, and the water has ruined materials as well as assembly and testing equipment. The company expects this to affect supplies of maritime products over the months ahead, including radio products forming part of the new System 6000 series. Products for other markets are not expected to be affected. "Like many other businesses in the Bangkok area, our business partner has been severely hit by the heavy flooding. As a result, there is hardly any doubt that this will affect supplies, and thus our revenue, over the next two or three months," said Walther Thygesen, CEO of Thrane & Thrane. We have yet to feel any adverse impact, and we have reason to believe that this is only a temporary problem. Most likely, this will only postpone some of our sales, but we now expect that our overall revenue for 2011/12 will be DKK 30–50 million lower than our previous guidance," says Walther Thygesen. Thrane & Thrane has monitored the situation closely since flooding began in Thailand. Previously, the disaster was not expected to have a material effect on the company's shipments, because initially there was only limited damage to equipment relating to Thrane & Thrane's products and because the company had built a large emergency inventory of a range of products. Thrane & Thrane is working hard in both Denmark and Thailand to normalize production as quickly as possible in order to restore full capacity shipments to customers. A number of employees have been dispatched to Bangkok to assist in this work, and the company is looking into possible production alternatives for the most critical products. Based on the above, Thrane & Thrane now expects revenue of around DKK 1,085–1,135 million for the 2011/12 financial year, against the previous forecast of DKK 1,125-1,175 million. The operating margin is forecast at around 15% instead of the previous forecast of around 17%.
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