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PCB |

Aspocomp re-publishes its 1H report

Due to technical problems Aspocomp's financial report for its first half of 2007 came out wrong. The report follows here in the right issue.

Aspocomp's net sales were EUR 51.6 million (EUR 72.9 million in 1-6/2006). The reference quarter figure includes the Chinese lower technology plant that was divested in April. Eliminating the effect of the divestiture, comparable net sales declined by 17.6 percent (EUR 62.6 million in 1-6/2006). Net sales of the Salo plant waned due to a limited number of products and production ramp-down. Global overstocking of the handset market in the first quarter of the year still affected demand at the Chinese plant. Its sales picked up towards the end of the period. Lower technology products of the Thai plant were under heavy price pressure, which affected its sales volumes. Net sales at the Oulu plant continued to strengthen. Aspocomp's pperating profit reached EUR -40.9 million (-8.9). The decline was mostly attributable to write-offs amounting to EUR 20.4 million at the Salo plant and compensation of EUR 10.1 million to the former employees of Aspocomp S.A.S. The plants in Oulu and China continued to turn a profit. Cash flow from operations was slightly improved to EUR -2.1 million (-2.3) and investments totaled EUR 48.7 million (10.4). Investments consisted mostly of the purchase of a minority share in the Chinese subsidiary. The report and reference period figures do not include the Modules division divested in August 2006. Unless otherwise stated, the reference period figures include the Chinese lower technology plant. The Aspocomp Group's net sales for the April-June period were EUR 24.1 million (35.9). The Group's comparable net sales for the period were EUR 30.9 million, excluding net sales of the Chinese lower technology plant sold in April. It fell by 22.2 percent and in China, by 9.8 percent on the reference quarter. Net sales of the Salo plant waned due to a limited number of products and production ramp-down. Global overstocking during the first quarter of the year still affected demand at the Chinese plant. Lower technology products of the Thai plant were under heavy price pressure, which affected its sales volumes. Net sales of the Oulu plant improved slightly on the reference period. However, the total net sales of the Finnish Salo and Oulu plants declined by 15.3 percent due to the Salo plant. Comparable net sales of the Asian plants in China and Thailand, eliminating the effect of the lower technology plant sold in China, declined by 24.9 percent. Sales of the Thai plant waned markedly on the reference quarter. Despite weaker overall demand, sales in China picked up 20.2 percent on the first quarter of the year. The Group's net sales per plant were as follows: - the Finnish plants, 44 percent (36%) - the Asian plants, 56 percent (64%) The Group's net sales by market area were as follows: - Europe, 59 percent (54%) - Asia, 21 percent (31%) - the Americas, 20 percent (15%) The Group's net sales per product area were as follows: - handheld devices and telecom networks, 83 percent (67%) - automotive, industrial and consumer electronics, 17 percent (33%) Operating profit was EUR -34.4 million (-5.3), or -143 percent (-17%) of net sales. The severe decline in operating profit was mostly attributable to write-offs amounting to EUR 20.4 million at the Salo plant, of which the plant building accounted for EUR 11 million, and compensation of EUR 10.1 million to the former employees of Aspocomp S.A.S. Salo write-offs, both building and machinery, include uncertainties and the final outcome may differ from current amounts. Profit of the Thai plant waned noticeably on the reference quarter. The plant's lower technology products were under heavy price pressure, which shrank its sales volumes and pressed profits. Although the profit posted by the Chinese plant fell visibly on the reference quarter due to lower sales volumes, resulting from global overstocking in the handset market, and unfavorable product mix, its profitability remained good. Profit of both Asian plants improved in the second quarter compared to the previous quarter. Profit of the Oulu plant improved on both the reference quarter and the January-March period. The Group's net financial expenses were EUR -3.6 million (-0.3) and the profit for the period was EUR -40.2 million (-5.7). Financial expenses included EUR 2.1 million in Aspocomp S.A.S litigation interest. Earnings per share were EUR -0.79 (-0.14). Maija-Liisa Friman, president and CEO of Aspocomp commented: "The first half of the year was a challenging period in the PCB market due to the overstocked global sales channels. In addition, certain products at the Salo plant were terminated and subsequent to the minority share acquisition in China, the Suzhou plant underwent a significant transition period. The Salo plant was closed down in July. The major overhauls have now been completed and there are signs of an improvement. The Group's cash flow from operations is starting to turn and we expect it to improve in the third quarter of the year. Closing down the Salo plant is expected to yield annual savings in excess of EUR 10 million and reduce loss before non-recurring items by about EUR 3 million. After a weaker start of the year, the transition period following the minority share purchase in the Chinese subsidiary was completed. Experienced Chinese management has replaced the Taiwanese and the unit has been integrated into the Group. The benefits of the operational takeover will be visible starting the third quarter and come into full effect in the fourth quarter of the year. We are now well-poised for taking full advantage of the growing market. Lower technology products from Thailand have been under heavy price pressure this year, which has affected the sales volumes. Actions taken to improve the plant's operative performance, including labor cost cuts and better control of raw material usage, have started to bear fruit. The Oulu plant, in contrast, continues to excel. The decision of the French Supreme Court on June 19, 2007, was the least expected outcome. According to the decision, Aspocomp has to pay EUR 10.1 million plus interest to the former employees of Aspocomp S.A.S. The related counter obligation of Aspocomp to Nordea has been converted into a bank loan; therefore, the decision will not essentially weaken Aspocomp's immediate liquidity. In order to better serve our globally growing customers, we are actively continuing partnership and financing negotiations. A partnership enables our growth in Asia and helps finance our planned investment program. The possible choice for strategic partnership will also affect the timing of investments and plant start-up in India. Aspocomp's volume production is now located entirely in Asia. The closing down of the Salo plant went well. Consequently, we expect to see a better performance starting from the third quarter of the year."

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March 28 2024 10:16 am V22.4.20-1
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