PCB | November 15, 2007

Aspocomp’s turnover down significantly

Aspocomp’s turnover and profit went down significantly during the first nine months of this year. Net sales were 76.1 million euro compared to 110.7 million euro in the same period last year.
Net sales for Aspocomp went down from 110.7 million to 76.1 million euros during the first nine months. Reference period figure includes the Chinese lower technology plant that was divested in April 2007. Eliminating the effect of the plant, comparable net sales declined by -19.5 percent (EUR 94.5 million in 1-9/2006). Net sales of the Salo plant waned due to a limited number of products and production ramp-down. The plant was closed down in July. Sales at the Chinese plant picked up gradually and reached the reference quarter level in the July-September period. Sales fell noticeably at the Thai plant and remained on a par with the reference period at the Oulu plant.

Aspocomp’s operating profit was EUR -47.2 million (-13.0). The decline was mostly attributable to write-offs amounting to EUR 20.4 million at the Salo plant, compensation of EUR 10.1 million to the former employees of Aspocomp S.A.S and the decrease in the profitability of the Thai and Chinese plants. The plants in Oulu and China continued to turn a profit. Earnings per share from continuing operations: EUR -1.36 (-0.60). Cash flow from operations: EUR -17.8 million (0.8). Investments: EUR 46.6 million (17.9). Investments consisted mostly of the purchase of a minority share in the Chinese subsidiary. Per-share cash flow after investments: EUR -1.40 (-0.56). On November 8, 2007, Aspocomp announced it will transfer its subsidiaries in China and India as well as certain equipment from the Salo plant to a new holding company. Meadville Holdings Limited will purchase an 80 percent stake in the company and Aspocomp will remain a minority owner.

Net sales in the third quarter were down 37.2 percent from 37.7 million to 24.4 million euros. Operating profit was -6.3 million compared to -4.3 million for the same quarter last year. The Group's comparable net sales for the period were EUR 32.0 million, excluding net sales of the Chinese lower technology plant sold in April. Comparable net sales fell by 23.6 percent and in China by 5.0 percent on the reference quarter. As production at the Salo plant was closed down in July, the plant's net sales waned due to a limited number of products sold from the stock. After global overstocking of the handset market in the first quarter of the year, sales at the Chinese plant reached the reference quarter level. Lower technology products of the Thai plant were still under heavy price pressure, which shrank its sales volumes.

Net sales of the Oulu plant fell somewhat on the reference period. The total net sales of the Finnish Salo and Oulu plants declined by 18.2 percent.

Comparable net sales of the Asian plants in China and Thailand, eliminating the effect of the lower technology plant sold in China, declined by 4.5 percent.

The Group's net sales per plant were as follows:
- the Finnish plants, 31 percent (33%)
- the Asian plants, 69 percent (67%)

The Group's net sales by market area were as follows:
- Europe, 66 percent (58%)
- Asia, 22 percent (26%)
- the Americas, 12 percent (16%)

The Group's net sales per product area were as follows:
- handheld devices and telecom networks, 72 percent (61%)
- automotive, industrial and consumer electronics, 28 percent (39%)

Aspocomp's main priority towards the end of 2007 is the restructuring of the Group and the successful closing of the transaction with Meadville Holdings Limited. This enables the company to develop its market position and competitiveness, serve the main global customers and increase cost-effectiveness through the joint venture with
Meadville. In addition, the transaction is expected to strengthen the liquidity of the Aspocomp Group; however, the liquidity will remain weak.

The full-year net sales of the Aspocomp Group from continuing operations and excluding the sold plant in China are forecast to decrease compared to the previous year. Profitability, excluding one-off items, is anticipated to remain on a par with 2006 and the full-year 2007 result is expected to be markedly unprofitable.

Aspocomp estimates that the Group's consolidated cash flow from continuing operations is not likely to reach break-even during the last quarter of this year. The cash flow of the operative subsidiaries Aspocomp Oulu Oy in Finland and ACP Electronics Ltd. in China is expected to stay positive.
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December 13 2018 1:08 pm V11.10.14-1