SOLNA, Sweden, April 23, 2002 (PRIMEZONE) -- LGP Telecom:
-- Net revenues MSEK 266.0 (376.0)
-- Operating result declined to MSEK -6.2* (42.1)
-- Lower inventories and positive cash flow during the period
-- Bengt Broman assumes position as President and CEO of LGP Telecom
Holding AB at today's Annual General Meeting.
SALES AND RESULT
First quarter 2002
Net revenues for the first quarter amounted to MSEK 266.0 (376.0), which represents a decrease of 29.3 percent. The operating result amounted to MSEK -6.2* (42.1). Earnings per share were SEK -0.35 (0.96).
Europe, which is LGPs largest market, continued to be weak during the first quarter. The reason is that most operators are still holding back infrastructure investments awaiting GPRS service offerings and availability of 3G telephones in the market. LGP is not expecting any growth in this market during the first six months of 2002.
The North American market was relatively good. A number of major American operators have thus placed frame orders for TMA 1900 products. LGP is expecting a continued positive development during the remainder of the year.
Sales in Asia have been stable during the first quarter. LGP thus received orders for TMA from China as well as India.
The market development for the first quarter has meant a slight increase in order bookings and sales compared to the fourth quarter of 2001. The sales are related to telecom products for both 2G and 3G. Products for 3G account for 30 percent of telecom sales.
Capital tied up
The Group posted a positive cash flow during the first quarter and the group continues to be focused on reducing capital tied up in the business. During the second quarter the Group's inventories were reduced from MSEK 228.1 to MSEK 218.9 (290.7), which is equivalent to 4 percent.
Capital expenditures
Capital expenditures during the period amounted to MSEK 4.8 (81.9) and refer to machinery and equipment.
Expenses for development work were capitalized in the amount of MSEK 2.3. The item is included in intangible assets.
Personnel
The number of employees as of March 31, was 750 (927). As of December 31, 2001 the number of employees was 719.
Financing
The equity ratio as of March 31, 2002 was 71.0 percent (60.8). As of December 31, 2001 the ratio was 70.3 percent. The Group's liquid funds amounted to MSEK 47.4 (48.5). Unutilized committed credit facilities amounted to MSEK 150 (183.3) and interest-bearing liabilities amounted to MSEK 228.5 (313.3). Cash flow form current operations for the period January - March amounted to MSEK 16.1 (59.2). Net after capital expenditures cash flow was MSEK 35.4 (-80.1). Shareholders' equity per share amounted SEK 34.2 (34.5).
Forecast
No forecast for 2002 is offered. However, LGP finds no reason to have a different opinion than other players concerning the telecom market during 2002. At the moment LGP registers a small increase in order bookings for the telecom sector. For mechanical products the order situation is stable.
*) The result has been charged with costs of a non-recurring character in the amount of MSEK 3.9 attributable to severance payments and personnel changes
Accounting principles
From January 1, 2002 LGP has implemented the following new recommendations from the Swedish Financial Accounting Standards Council: RR 1:00 Consolidated reporting, RR 15 Intangible assets, RR 16 Provisions, contingent liabilities and assets, RR 17 Writedowns, RR 21 Loan costs and RR 23 Information about closely affiliated parties. Implementation of RR 1:00, RR16, RR 17, RR 21 and RR 23 has not had any major effect on results or financial position. According to RR 15 Intangible assets, expenses for development of new products should be reported as intangible assets to the extent such expenses with a high degree of certainty will lead to future economic benefits for the company. The cost of such intangible assets shall be amortized over their estimated useful life. Under LGP's application of the new rules, all development projects are carefully assessed. To justify capitalization of sunk costs, LPG's judgment has to be that customer orders will be received with a high degree of certainty. Under the accounting principles previously applied by LGP, all expenses for development of new products were expensed.
In all other respects the same accounting principles and calculation methods have been applied for the semi-annual report as for the most recent annual report.
ANALYSTS' MEETING - TELEPHONE CONFERENCE
At 8:30 a.m., Wednesday, April 24 at Operaterassen, Stockholm At 5:00 p.m., Wednesday April 24, English, telephone +44-20 8781 0571
To listen to a recording of the conference, call +44-20-8288 4459 code 616352 The recording will be available until May 1, 2002.
FINANCIAL REPORTING 2002
Interim Report April - JuneAugust 21 Interim Report July - OctoberOctober 22
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