Espoo, Finland, 2016-08-10 08:00 CEST (GLOBE NEWSWIRE) --
EFORE PLC Half year financial report August 10, 2016 at 9.00 a.m.
This release is a summary of Efore's Half year financial report January – June 2016. The full report is a PDF file attachment to this stock exchange release and is available on the company's website at the address www.efore.com.
January – June 2016 in brief:
- Net sales totalled EUR 39.5 million (EUR 47.2 million), down -16.4 % compared with the corresponding period last year
- Adjusted operating result was EUR -2.6 million (EUR 0.7 million)
- Operating result was EUR -3.0 million (EUR 0.7 million)
- Earnings per share were EUR -0.06 (EUR -0.01)
- The outsourcing negotiations of China plant have progressed well
| 1-6/16 | 1-6/15 | Change | 1-12/15 | |
| Key indicators, EUR million | 6 mo | 6 mo | % | 12 mo |
| Net Sales | 39,5 | 47,2 | -16,4 | 89,9 |
| Telecommunication sector | 18,0 | 25,2 | -28,6 | 44,8 |
| Industrial sector | 21,5 | 22,0 | -2,3 | 45,1 |
| Adjusted operating result */** | -2,6 | 0,7 | -1,6 | |
| Operating result ** | -3,0 | 0,7 | -2,0 | |
| Result before taxes | -3,1 | -0,2 | -3,3 | |
| Net result | -3,3 | -0,4 | -3,4 | |
| Earnings per share, EUR | -0,06 | -0,01 | -0,07 | |
| Solvency ratio, % | 28,3 | 37,2 | -23,9 | 34,2 |
| Gearing, % | 32,1 | -0,4 | 24,5 | |
| Cash flow from business operations | 1,2 | 4,2 | 1,8 |
* Adjustments include items such as costs due to changes in organizational structure, impairment charges and impact from the sale of businesses
** Starting from H1/ 2016 the term “Operating result” is used instead of “Results from operating activities”
| Key indicators Half year, EUR million | H1/2016 | H2/2015 | H1/2015 |
| Net Sales | 39,5 | 42,6 | 47,2 |
| Telecommunication sector | 18,0 | 19,6 | 25,2 |
| Industrial sector | 21,5 | 23,1 | 22,0 |
| Adjusted operating result | -2,6 | -2,3 | 0,7 |
| Operating result | -3,0 | -2,7 | 0,7 |
Financial estimate for 2016
Efore Plc downgraded its financial estimate for 2016 on August 4, 2016.
New financial estimate is:
The Company estimates its net sales of financial year 2016 to be lower than in the previous year (2015: EUR 89.9 million) and adjusted operating result to be lower than last year (2015: EUR -1.6 million)due to the new forecasts which indicate lower sales than earlier estimated. H2/2016 adjusted operating result will not be as low as in the corresponding period of last year (H2/2015: EUR -2.3 million).
Previous financial estimate was:
The Company estimates its net sales of financial year 2016 to be lower than in the previous year (2015: EUR 89.9 million), and adjusted operating result (old term results from operating activities without one-time items) to be negative, but better than in the previous year (2015: EUR -1.6 million).
Jorma Wiitakorpi, Efore’s President and CEO:
The first half of the year was especially characterized by a weaker than forecasted demand and an unfavorable product mix in the telecommunication sector. Certain telecom projects were delayed and due to this a portion of the net sales is postponed to the latter part of the year. Furthermore, a two-year long project delivery to one remarkable telecom customer was completed in 2015. Despite our efforts we have not been able to generate additional revenue to replace the deficit arising from this project. These all had a negative effect on net sales and profitability during the H1/2016. Thus H1/2016 net sales were lower than in the corresponding period of last year.
The industrial sector sales were almost on the same level as in the corresponding period of last year. The profitability of the industrial sector was at a satisfactory level.
The implementation of the renewed strategy and necessary efficiency programs have not progressed as planned. Furthermore, there have been changes in business environment which require adjustments to the strategy. Corrective actions were started early in the summer. The target is to reduce fixed costs significantly.
The outsourcing negotiations of manufacturing as well as manufacturing support functions at Suzhou plan in China have progressed well. The target remains to finalize the negotiations in time for the new partner to produce Efore’s first products during H2/2016.
The before mentioned actions will improve significantly the company’s profitability.
The most important action of Efore now is to successfully execute the outsourcing of manufacturing in Suzhou and cost savings. These concrete measures are taken to create conditions for positive operating result in 2017. New long-term targets will be published in Autumn.
Net sales development
January – June net sales totalled EUR 39.5 million (EUR 47.2 million).
The first half year 2016 net sales of telecommunication sector totalled EUR 18.0 million (EUR 25.2 million), with a year-on-year decrease of 28,6 %.
The first half of the year was especially characterized by a weaker than forecasted demand and an unfavorable product mix in the telecommunication sector. Certain telecom projects were delayed and a portion of the net sales was postponed to the latter part of the year. Furthermore, a two-year long project delivery to one remarkable telecom customer was completed in 2015. Despite our efforts we have not been able to generate additional revenue to replace the deficit. These all had a negative effect on net sales and profitability during the H1/2016. Thus H1/2016 net sales were lower than in the corresponding period of last year.
The industrial sector sales were almost on the same level as in the corresponding period of last year and totalled EUR 21.5 million (EUR 22.0 million). The profitability of the industrial sector was at a satisfactory level.
Result development
The operating result decreased clearly compared with the last year resulting EUR -3.0 million (EUR 0.7 million) and adjusted operating result was EUR -2.6 million (EUR 0.7 million).
Main reasons for the weak result development were lower than forecasted demand of telecom sector and an unfavorable telecom product mix. The low utilization of production capacity weakened the operating result.
Business development
Sales of the telecommunication sector are expected not to grow this year. At the end of the reporting period Efore has won some projects improving sales in 2017 and onwards.
The net sales of the industrial sector went down slightly but the new customer acquisition of the sector has progressed well. New business has been acquired in Broad-Band Networking Application, Diagnostic Medical and Stage Lighting Mobile Heads.
Market outlook
During the last years the group has reached in to new markets enabling better opportunities for growth. The products based on the LTE (4G) technology are in a key role in network expansions. There is a trend towards smaller base stations where Efore also focuses product development investments.
Power supplies for LED lighting, instrumentation, medical equipment and infrastructure offer several growth areas for Efore in the industrial sector. Efore focuses on expanding its product selection and increasing its customer base especially in the segments where high reliability is required, where market fluctuations are lower and product life-cycles are longer.
Factors of uncertainty have been presented in the section “Short-term risks and factors of uncertainty”.
EFORE PLC
Board of Directors
For further information please contact Mr. Jorma Wiitakorpi, President and CEO, on August 10, 2016 at 9 -10 a.m., tel. +358 40 175 8510
DISTRIBUTION
Nasdaq Helsinki Oy
Principal media
Efore Group
Efore Group is an international company which develops and produces demanding power products. Efore's head office is based in Finland and its production units are located in China and Tunisia. Sales and marketing operations are located in Europe, United States and China. In the fiscal year ending in December 2015, consolidated net sales totaled EUR 89.9 million and the Group's personnel averaged 887. The company's share is quoted on the Nasdaq Helsinki Ltd. www.efore.com
ENCL: Half year financial report H1/2016 incl. tables
