DANDERYD, SWEDEN -- Top 60 EMS provider Note Ab reported June quarter sales of SEK 298.6 million ($40.9 million), down from SEK 312.1 million a year ago.

The company also named Peter Laveson CEO and president, replacing Göran Jansson, who had been acting CEO and president since January.

On a continuing operation basis, sales rose 10%. The operating loss was SEK 3.8 million, an improvement from a loss of SEK 18.1 million, including one-time charges of SEK 8 million. The operating loss was 1.3%, up from a 5.8% loss. The loss after financial items dropped to SEK 5.9 million. The loss after tax was SEK 11.4 million, also up from a loss of 16 million last year. The EMS company reported negative cash flow after investments of SEK 54.9 million due to higher inventories to compensate for parts shortages.

For the first half, sales were SEK 572.0 million, down 10.8% from SEK 641.2 million a year before. Sales at continuing operations increased 4%. The operating loss, excluding structural and other nonrecurring costs, was SEK 12.3 million, up from a loss of 18.7 million last year. The operating loss doubled to SEK 56.3 million. Operating margin loss was 9.8%. The loss after financial items was SEK -61.0 (-31.0) million. Excluding nonrecurring costs, the loss after items was SEK 17 million. The after-tax loss was SEK 55.1 million.

During the period, the company continued to transfer production from Skänninge, Sweden, and Tauragé, Lithuania, and began shuttering its Gdansk, Poland, operation, which should be shut by year-end. The company took SEK 40 million in restructuring charges, charged to the first quarter. The company expects to save SEK 50 million on annual basis from the moves.

"After a fairly weak start to the year, market conditions gradually improved. Customer activity has increased, and at the mid-point of the year, our order book was up some 20% on last year," Jansson said. There are still "problematic shortages" of electronics components, which presented major challenges to production and logistics, he said.

The company now does volume production at Pärnu, Estonia, and Tangxia, China, and its joint venture plant in Krakow, Poland.

Note also organized its CAD and parts operations into a separate company, a joint venture with Anders Johansen.

Ed.: 1 SEK = US$0.1371

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