Eltek ASA - Report fourth quarter and full year 2009

Eltek generated continued strong free cash flow of NOK 194 million in the fourth quarter 2009. Free cash flow for the full year 2009 improved by more than NOK 1 billion to NOK 585 million, with positive contributions from all business segments.

The top priorities for Eltek in 2009 were to improve cash flow and strengthen its financial flexibility, and measures to improve working capital management and cash collection have paid off. Net cash flow from operating activities improved by NOK 947 million to NOK 838 million in 2009, as working capital was reduced by NOK 685 million to NOK 899 million.

The Board of Directors is satisfied with the result of the focused working capital programs but working capital management remains a key priority with an aim to generate positive free cash flow in all segments also in 2010.

Group revenue amounted to NOK 1,497 million and gross profit to NOK 349 million for the fourth quarter. EBIT was a negative NOK 143 million, including impairment and other non-recurring charges of NOK 199 million. For the full year, revenue declined by three percent to NOK 5,778 million, whereas gross profit declined two percent to NOK 1,338 million. EBIT was a negative NOK 11 million, including impairment and non-recurring charges of NOK 220 million. Loss before tax amounted to NOK 173 million for the fourth quarter and to NOK 92 million for the full year 2009.

Order entry declined by 10 percent from the third to the fourth quarter, and normal seasonal patterns indicate a revenue decline from the fourth quarter to the first quarter in the following year. Overall, Eltek expects that the telecom power market will stabilize in 2010, and that the transmission market will show growth. 

Eltek believes it has a good foundation to strengthen its position going forward, with a power efficient product portfolio of power supply products and a broader Evolution radio portfolio. Eltek Valere expects growth for industrial applications, and stands to benefit from growth initiatives in new areas such as solar power inverters and electric vehicle chargers.

Please find enclosed the interim report for the fourth quarter and full year 2009 on http://www.newsweb.no