Eltek ASA: Report third quarter 2014

(Drammen, 23 October 2014): Eltek reported revenue of NOK 951 million in the third quarter 2014, compared to NOK 999 million in the third quarter last year, which was unusually strong.

The gross margin was 28.2 percent, compared to 28.1 percent in 2013 and 29.4 percent in the third quarter last year.

Adjusted EBIT was NOK 80 million and adjusted EBITDA was NOK 104 million. There were several one off items in the third quarter related to: (a) accounting issues in Brazil, (b) ONE Eltek costs and (c) R&D impairment in the US. Reported EBIT was NOK 56 million, compared to 93 million in the third quarter last year.

Reported profit before tax for the continuing operations was NOK 37 million, compared to 72 million last year. Reported net profit was NOK 30 million, compared to 53 million last year.

"We secured key strategic orders and frame agreements in this quarter, and this will support our growth going forward after a quarter partly characterized by one-off effects," said Eltek's CEO Colin Howe.

Order intake decreased 10 percent, but order backlog was stable. Short backlog turnaround time combined with orders booked in the early part of the fourth quarter provide good visibility for the current quarter.

Eltek's market focus is now on the business areas Telecom Power, Industrial Applications and Data Center Power.

Revenue in Telecom Power, including Data Center Power, was NOK 849 million in the third quarter, a decrease of 6 percent from the third quarter last year. During the quarter Eltek signed a global purchasing agreement with Ericsson, a key strategic customer. Recently, Eltek has also signed an important frame agreement with a leading regional operator in the Middle East and Africa covering supply of power systems to 19 subsidiaries. There were also important contract wins in Thailand, Singapore, Australia and Vietnam.

Within data centers, Eltek has contributed to the successful implementation of a mega data center in the Asia Pacific region. This project will be presented at the Datacenter Dynamics conference in London in November.

Revenue in the Industrial Applications business area was NOK 102 million in the third quarter, an increase of 23 percent, thus continuing the positive development from previous quarters. In September Eltek signed a key global frame contract with Siemens, following up on the strategy of pursuing agreements with the leading infrastructure providers.

Also, Eltek today announced that it is acquiring Singapore-based EV Industrial to form the base for further growth within the Industrial segment in Asia.

"We see strong growth in the Industrial segment, and the acquisition of EV Industrial will help realize this potential in the important Asian markets," said Colin Howe.

Revenue and gross margin in the fourth quarter are expected to be at about the same level as in the third quarter.

Please find enclosed the interim report for the third quarter 2014 on http://www.newsweb.no

The company hosts a presentation and subsequent Q&A session on a combined webcast and conference call at 8:30 CEST today.

Webcast: http://www.eltek.com/webcasts or follow the webcast link on the investor relations section on the company web site.

Conference call: Please dial in 5 minutes prior to start time using the below number and confirmation code.

Norway +47 2316 2771
International call +44(0)20 3140 8286
US +1212 444 0481

Participants will be asked for their name, company and conference ID. The Eltek conference ID is: 1909972.

About Eltek:

Eltek is a strategic technology partner for power solutions. The company reported revenue of NOK 3.7 billion in 2013, and has approximately 2,400 employees and operations in almost 40 countries. The company focuses on power electronics markets, where it is one of the leaders in telecom power and a growing force within industrial applications. Eltek is also pursuing growth opportunities within the data center market. Eltek is listed on Oslo Stock Exchange (ELT:Oslo) and headquartered in Drammen, Norway.

This information is subject of the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.