Major downsizing at NOTE's factory in Skellefteå
"In addition to the recession, we have faced a structural challenge during the year due to a generational change of a significant product at our largest customer in Telecom. This fact has negatively impacted the volumes and profitability of our existing business. In agreement with the customer, it has been decided to immediately cease production of their product.
The customer's decision to cease production has come earlier than expected, which requires further reductions in operations in Skellefteå. The measures will entail closure and impairment costs totalling approximately SEK 40 million. This cost will be fully charged to earnings in the third quarter.
The agreement we have now signed with the customer will strengthen NOTE's liquidity by some SEK 40 m. Combined with positive cash flows from operations in the second and third quarters of the year, our indebtedness will reduce.
The scale of operations in Skellefteå has been reduced in recent years and the number of employees is currently around 40. Most of our labour-intensive purchasing and manufacturing services now take place in our units in Eastern Europe and China.
NOTE's new sales are progressing according to plan. With previously announced and executed cost reductions, the group's cost level has reduced significantly. Together with the measures in Skellefteå, our assessment is that our running costs have been adjusted to current demand," says Knut Pogost, President and CEO of NOTE.
For further information, please contact:
Knut Pogost, President and CEO, tel. 08-568 990 06, 070-552 34 44
Henrik Nygren, Chief Financial Officer, tel. 08-568 990 03, 070-977 06 86