AT&S 1H'07 Operating Profit Increases by 18%


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With revenues of EUR 241.7m and net profit of EUR 21.6m in the first half of financial 2007/08, AT&S continues to deliver consistently strong growth.  <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

AT&S, the largest producer of printed circuit boards in Europe and <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />India, has once again succeeded in bettering its results of the preceding year. Revenues were up 4% compared with the same period a year earlier, to EUR 241.7m. Operating profit  was  up  11%  to  EUR 22.2m.  "Despite  the  dollar's marked  weakness,  which  had  a  considerable  negative impact on our revenues, we were successful in raising total revenues once again," reports Chairman of AT&S's Board of Management, Harald Sommerer. 

The ramp-up of the fourth production line at Shanghai II, which  will  be  completed  by  the  end  of  November,  and Shanghai III, which is scheduled to enter production at the start of 2008, provide further opportunities for growth. 

Healthy  revenues  in  our  core  printed  circuit  board manufacturing  operation  more  than  compensated  for  the decline  in revenues contributed by our fledgling Services business.  While  Services  contributed  about  9%  of  total revenues in the first half of 2006/07, its share of the total in the same period this year slipped to just 2%. The Group

expects performance in this area to improve considerably in the second half of the year. In addition to its core business of  manufacturing  printed  circuit  boards,  AT&S  offers  its customers design and assembly services and PCBs from its business partners. This business model has the potential to generate  relatively  high  revenues  and  requires  extremely low levels of investment. 

The  weak  US  dollar  also  had  a  considerable  impact  on revenues.  As  AT&S's  main  competitors  for  telecoms business are located in Asia and closely linked to the dollar, prices for printed circuit boards of this kind are at the mercy  of fluctuations in the dollar. AT&S has now established the majority  of  its  production  for  the  telecoms  market  in  the extended US dollar area, so that exogenous effects on costs are  already  reflected  at  the  operating  levels.  Since  the remaining currency positions were hedged, the impact of the unfavorable US dollar was largely confined to revenues and had a much lesser effect on earnings. 

"Given these dramatic exchange rate fluctuations, we are highly satisfied with the results. Margins are better even than in  the  highly  successful  first  half  of  financial  2006/07. Operating profit was up 18% and earnings per share by fully 29%," explains Harald Sommerer. 

AT&S today employs 6,250 people at its production sites in Austria,  India,  China  and  Korea,  and  its  worldwide sales offices. 

In  the  coming  months  AT&S  expects  to  continue  to  be exposed  to  considerable  uncertainties  as  a  result  of currency  fluctuations.  "We  see  increasing  uncertainty attaching to revenue trends expressed in euro, and have therefore decided to suspend revenue guidance until further notice," explains AT&S CFO Steen Hansen. 

On the basis of its positive performance over the first half of the  year and the  success of its  hedging activities, AT&S continues to be optimistic about the outlook for the Group's net income and EPS, and reaffirms guidance for the latter of EUR 1.60-1.70.   

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