Eltek ASA - Report second quarter and first half year 2009

Drammen (19 August, 2009). Eltek ASA reports revenue of NOK 1,487 million and a gross profit of NOK 341 million for the second quarter 2009. Operating profit (EBIT) was NOK 41 million, compared to NOK 52 million in the second quarter last year. Positive net financial items contributed to an improvement in profit before tax to NOK 68 million from NOK 51 million in the same quarter last year. Net working capital was reduced by NOK 140 million in the second quarter, and net cash flow from operations amounted to NOK 193 million. Net debt was reduced by NOK 142 million to NOK 724 million at the end of the second quarter.

Revenue increased by 5 percent from the first quarter 2008. The growth was supported by currency developments, and revenue declined by 8 percent on a currency adjusted basis. The gross margin declined to 23.0 percent from 23.7 percent in the second quarter 2009, with gross margin improving in Eltek Valere but declining in Nera Networks. The positive net financial items of NOK 28 million in the second quarter include positive currency effects of NOK 55 million.

Net free cash flow after investment was NOK 128 million in the second quarter and NOK 249 million for the first half year, and the company will remain focused on working capital management to continue to improve its financial flexibility.

Going forward, the uncertain economic outlook continues to limit demand visibility, and both Eltek Valere and Nera Networks have taken measures to reduce the cost base in preparedness for a continued challenging market.

Eltek Valere expects the measures to lower the annual cost base by approximately NOK 30 million, whereas Nera Network expects combined annual savings in cost of goods sold and operational costs of approximately NOK 55 million from the first of two planned restructuring phases. Non-recurring costs related to restructuring affected the Income Statement negatively by NOK 10 million in each of the two subsidiaries in the second quarter 2009.

Please find enclosed the interim report for the second quarter and first half year 2009 on http://www.newsweb.no

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SOURCE: Eltek ASA

Related terms: currency, investment, market, profit, restructuring, revenue, tax