NOVACAST TECHNOLOGIES LTD. (publ) 556211-0790 INTERIM REPORT FOR THE PERIOD JANUARY-SEPTEMBER 2009

NOVACAST TECHNOLOGIES LTD. (publ) 556211-0790 INTERIM REPORT FOR THE PERIOD
JANUARY-SEPTEMBER 2009	 

July - September 2009


•	Net sales for the period were at 19,0 MSEK (25,5)
•	 Loss after tax was -8,0 MSEK (8,0) 
•	Operating loss for the quarter was -6,8 MSEK (8,6)
•	Earnings per share -0,59 SEK (0,59)
•	 Reduced loss rate as result of cost reduction program
•	 Large Camito order of 28 MSEK from Magna 
•	 KOTEK foundry in Korea opened (current ownership 9%)
•	Improved cash flow from operating activities during third quarter compared to
previous quarters

January - September 2009
•	Net sales for the period were at 78,3 MSEK (65,9)
•	Loss after tax was -30,1 MSEK (4,4)  
•	Operating loss for the period was -26,6 MSEK (5,4)
•	Earnings per share before and after dilution -2,21 SEK (0,33)
•	Order intake was 58,0 MSEK (108,4) and order backlog was 
36,3 MSEK (56,5)
•	Turnover and result were affected negatively by transformer breakdown at
Camito Technology Center
•	Production of castings to wind power industry started 
•	Several new Camito orders during the period



	
Events after reporting period  

•	Further cost reduction program started after reporting period 


Group development during reporting period

Net sales

Net sales for the group for the first nine months of 2009 increased to 78,3 MSEK
(65,9). 

Result after tax

Result after tax for the period was -30,1 MSEK (4,4). 

The positive result for quarter 3 2008 was mainly due to accounting effects
relating to the acquisition of SwePart Verktyg AB. The result was influenced
positively by badwill of 13,8 MSEK related to the acquisition that was taken up
as revenue. 

The rationalization and cost reduction programs that were decided on during the
fall of 2008, combined with the effects of personnel reductions, have further
reduced the loss pace in operations compared to previous quarters. The pace loss
decreased from - 7,7 MSEK in the second quarter to - 6,8 MSEK in the third
quarter despite the fact that invoiced volumes decreased by 35% from 30,1 MSEK
to 19,0 MSEK during the last quarter. A further cost reduction program has been
decided in order to ensure balance in future operations. 

Approximately -19,4 MSEK of the loss is related to SwePart. Approximately -15,6
MSEK of the loss is related to the order backlog and business deals that were
taken over with the acquisition in 2008. The deviation is of such a nature that
a claim, based on the extent of the loss, has been filed against the seller of
SwePart Verktyg AB.

The result reduction within CTC that was related to the transformer breakdown at
the beginning of the year is calculated at approximately 3,0 MSEK of which 1,8
MSEK has been reported as compensation from the insurance company and is
included in the result for the period.   

Cash

Cash and cash equivalents at end of accounting period were 16,0 MSEK (13,4)
including unutilized check credit of 11,4 MSEK. Accounts receivable for the
group were at 23,1 MSEK (51,5).

During the period the group was granted new credit of 24,0 MSEK in a combination
of bank loan, 12,0 MSEK and loan from ALMI Skåne, 12,0 MSEK.

Order intake and order backlog

Order intake during the period was 58,0 MSEK (108,4) of which 42,9 MSEK (95,3)
applies to the Automotive business area and 15,1 MSEK (13,1) applies to
activities within foundry technology. Outgoing order backlog was 36,3 MSEK
(56,5) of which the Automotive business area reached 34,8 MSEK (56,5) and
Foundry Technology reached 1,5 MSEK (0). Order intake and order backlog refer
only to written order requests, not framework agreements.

Investments

Reported investments in property, plant and equipment during the period amounted
to 1,4 MSEK (21,8). The investments consist of measures for increasing
efficiency within SwePart.




Development per business area and market during reporting period

Automotive

Net sales for this business area were 64,7 MSEK (51,7) during the period.
Operating loss was -26,1 MSEK (7,1). Order intake during the period was 42,9
MSEK (95,3) and outgoing order book was 34,8 MSEK (56,5). 
 
Camito AB

Growing interest in the Camito technology has been noted.  

During the third quarter a large business deal of 28,0 MSEK, containing several
Camito dies, was finalized with Magna Heavy Stamping in Austria. Production has
commenced and the project will streatch over the first half of 2010.  The tools
will be used in the company's production of details to two new car models from
one of the world's leading automotive groups. Camito dies constitute 40% of the
Magna order. This is the largest order so far for Camito produced dies.

Camito received an order during the period for the first Camito die shoe casting
from August Läpple GmbH & Co KG in Heilbronn, Germany. 

Camito has also received orders for stamping die shoe castings and complete dies
from Schweikert GmbH, Germany. 

Camito Financial Services, formed during the period to support project and
customer financing, has developed a unique financing model for stamping dies.
Negotiations are under way with several interested parties regarding powerful
financial solutions to the market. 

Camito Technology Center AB (CTC)

A serious production stop due to transformer breakdown took place at the
beginning of the period and caused reductions in volume and result. Our claim
for compensation for the result loss is approx. 3,0 MSEK. Of this amount 1,8
MSEK has been reported as compensation from the insurance company and is
included in the result for the period.  

Production of the order for wind power castings valued in excess of 30 MSEK
signed with Enercon during the third quarter commenced during March 2009. As a
result of delayed blanket purchase orders production pace has not achieved the
planned level.  

A personnel reduction of 5 persons took place during the period and in
combination with certain other cost reductions, this has given a positive result
effect of approx. 2,8 MSEK annually. Other cost reduction programs are being
introduced, including a further 2 dismissals. The new program is expected to
result in further savings of approx. 0,8 MSEK.

During the third quarter CTC has been running on a reduced work week following
the level of bookings. This flexibility is expected to continue at least until
the end of the year. 

Janni Dimovski assumed duties as new CEO for CTC during the period. Janni is
also CEO for SwePart Verktyg, which facilitates the coordination of our
production units management-wise, as a lead in SwePart's changeover to Camito
technology. 
 


SwePart Verktyg AB (Swepart)

SwePart has continued to experience losses due to too low price levels in the
old order book that was taken over with the acquisition in 2008. The losses
amount to 15,6 MSEK. Old projects will largely be completed during the third
quarter of 2009 but some work remains to be done and continued cost limitations
should be expected during the fourth quarter as well. The discrepancy is of such
a nature that a claim, based on the extent of the loss, has been filed against
the seller of SwePart.

The effects of earlier notices of dismissal have so far had a positive result
effect of 1,7 MSEK. A total of 43 persons have been give notices of dismissal.
After trade union negotiations 17 persons left the company at the end of the
first six months and a further 5 will leave during the coming six-month period.
Seven persons have been re-hired to cope with deliveries for orders. The full
effect of personnel reductions is expected to be approx. 0,8 MSEK per month. 

Sandvik's Production Improvement Program (PIP), aimed at optimizing efficiency
mainly in time-consuming machining phases, is currently being conducted within
SweParat. During the reporting period 1,4 MSEK was invested in this program for
increasing efficiency, which is expected to lower total machining times with
30%.


Foundry Technology (incl. Graphyte product area)

Net sales for the business area during the period were 13,6 MSEK (14,2).
Operating loss was -0,5 MSEK (-1,7). 

NovaCast Foundry Solutions AB (NCFS)

The total customer base increased to 438 customers (415) and the installed
licence base increased to 662 (636).  The number of Technology Partner
Agreements has decreased to 203 (222), a natural result of the difficult
situation that foundries are experiencing. 

The company received orders for its NovaFlow&Solid simulation software from
three customers during the period, Columbus Steel Castings (USA), ERCO Leuchten
GmbH, (Germany) and Omen (Israel).  

Despite the 30 - 60% (depending on the market) decrease in volume in the foundry
industry NovaCast Foundry Solutions has succeeded in maintaining its volumes and
generated a neutral cash flow.  

A subsidiary was started in the USA during the period and is starting low-scale
business activities. 

Note that Graphyte is now included in NovaCast Foundry Solutions' results.
Graphyte's turnover in the period corresponding to last year was approx. 1,0
MSEK and had a negative result of approx. 3,0 MSEK.

Since the turn of the year Peter Vomacka is the new CEO at NovaCast Foundry
Solutions. Peter was previously sales manager at Graphyte AB. 





Parent company

Net sales for the parent company were 7,7 MSEK (10,1) during the period, of
which intragroup sales were 7,7 MSEK (10,0). Operating profit was 0,2 MSEK
(0,9). 

Risks and uncertainty factors 

By far the largest risk at the end of the year and for 2010 is the continued
prevailing industrial and financial crisis in many parts of the world. Although
certain signs indicate an initial turn for the better it is difficult to say
when it could result in definite improvements in general business volumes. 

Focus is currently on cash flow and capital structure, as well as on creating
possibilities for continued offensive marketing to achieve increased order
intake. 

For further information about the group's operational and financial risks, risk
management and risk exposure please see NovaCast Technologies' annual report on
www.novacast.se 

Events after reporting period

Since business volumes are as yet not at a level that gives positive results or
cash flow at the production units, the Board has decided on further cost
reduction and savings programs, among others by moving headquarters to SwePart's
offices, further personnel reductions, 3-4 day weeks for certain office workers.


Future developments

As in previous years, NovaCast Technologies AB does not give any prognoses,
mainly since business activities are still in the construction phase, where
individual orders or business deals can create significant swings in these
activities. The general market development combined with the prevailing global
financial crisis render it impossible to make any prognoses of our own this
year. 

The Board and management will focus on adapting business activities according to
market conditions, on liquidity and cash flow, as well as on creating a new
business platform for expansion. 
Our marketing department has recently noticed increased interest mainly in
Camito technology and the rationalization gains that can be reached. When
SwePart has worked through its old, unprofitable order backlog during the
current quarter there is therefore hope for improved future developments.
However, this demands positive order intake compared to current levels. 
  
Tyringe 27 October 2009

Hans Svensson
CEO

For further information contact Hans Svensson, CEO at NovaCast Technologies AB,
+46 451 751032 or +46 75652250.
 

Review report
We have reviewed this report for the period 1 January 2009 to 30 September for
NovaCast Technologies AB (publ). The board of directors and the CEO are
responsible for the preparation and presentation of this interim report in
accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility
is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Swedish Standard on Review
Engagements SÖG 2410, Review of Interim Report Performed by the Independent
Auditor of the Entity. A review consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with Standards on Auditing in Sweden, RS,
and other generally accepted auditing standards in Sweden. The procedures
performed in a review do not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. 
Accordingly, we do not express an audit opinion. 
Based on our review, nothing has come to our attention that causes us to believe
that the interim report is not prepared, in all material respects, in accordance
with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with
the Swedish Annual Accounts Act, regarding the Parent Company.

Tyringe, 27 October 2009
Öhrlings PricewaterhouseCoopers AB

Claes Thimfors
Authorised Public Accountant
Auditor in charge

  
 

 
 




Definitions
	
Equity ratio:	Equity in relation to balance sheet total.
	
Liquidity ratio:	Current assets minus stock in relation to current liabilities.
	
Earnings per share:	Profit for the period attributable to equity holders of the
parent company divided by the average number of shares.
	
	
Equity per share:	Equity in relation to number of outstanding shares per
respective reporting period.

Accounting principles
NovaCast Technologies' interim report was prepared in accordance with IAS 34
"Interim financial reporting", as well as RFR's 2:2 (Swedish Financial Reporting
Board) and the Annual Accounts Act. The same accounting principles were used in
our latest annual report. 

Coming reports
NovaCast Technologies AB's year-end report is expected to be published during
February 2010.

The information is such that NovaCast Technologies AB (publ) shall publish in
accordance with securities markets law and/or laws regarding financial
instruments. The information was presented for publication at 1 pm on 27 October
2009.

NovaCast Technologies AB develops and markets enhanced castings for the
production dies for car body parts, as well as software for methoding,
simulating and process control, for better and faster production processes to
the global automotive industry and its subcontractors, mainly foundries and tool
manufacturers.

NovaCast Foundry Solutions AB offers powerful software packages that basically
cover the complete needs in a foundry, from planning to process control and
quality control. Graphyte technology offers advanced process control systems for
serial production of castings in compacted graphite iron related to the
automotive industry.

NovaCast subsidiary Camito AB markets Camito enhanced castings manufactured in
one solid piece for the production of dies for forming and stamping automotive
body components in a considerably shorter time than traditional methods.

Camito Technology Center AB mainly produces heavy castings, primarily to the
automotive industry. The foundry is also the development center for Camito
technology.

SwePart Verktyg is Scandinavia's leading die manufacturer. SwePart provides the
group with expertise within the whole value chain for the manufacture and sales
of stamping dies.

NovaCast Technologies' (founded 1981) head office is in Tyringe, Sweden.

www.novacast.se


NovaCast Technologies AB (publ)
Box 158
282 23 Tyringe, Sweden
+46 457 38 63 00

Corporate identity number 556211-0790