Changes in the Guidance for Financial Outlook
On January 10, 2013, EB lowered its profit guidance for 2012 due to the weaker than expected fourth quarter. The reason for the weakening of the fourth quarter was the non-recurring items of approximately EUR 4 million in total, booked as a result of the financial challenges faced by a US based customer of EB´s subsidiary, Elektrobit Inc. According to the lowered guidance, EB expected the operating result of the fourth quarter of 2012 to be approximately between EUR -0.4 million and EUR 1.1 million (EUR 3.5 million, 4Q 2011), the operating result of the second half of 2012 to be approximately between EUR 1.7 million and EUR 3.2 million (EUR 0.4 million, 2H 2011), and the operating result of the whole year 2012 to be approximately between EUR 2.2 million and EUR 3.7 million (operating loss of EUR -4.0 million in 2011). The expected operating results presented above included non-recurring items that caused the lowering of the fourth quarter profit guidance, as well as non-recurring income and costs related to the reorganization processes of TerreStar companies, booked earlier in 2012. The Company expected the outlook for the net sales to develop as estimated earlier and thus EB expected that the net sales of the fourth quarter of 2012 will be approximately EUR 57 million (EUR 49.0 million, 4Q 2011), the net sales of the second half of 2012 to be approximately EUR 104 million (EUR 86.1 million, 2H 2011) and the net sales of the whole year 2012 to be approximately EUR 200 million (EUR 162.2 million in 2011).
EB gave advance information on its fourth quarter and full year 2012 net sales and operating results on January 28, 2013. EB announced also to report its 2012 financial results, as provided by the IFRS 5 standard, divided between Continuing and Discontinuing Operations, and that the Test Tools product business is classified as Discontinuing Operations in the 2012 financial statements.
EB raised its profit guidance for 2013 due to the better than expected last quarter and gave a more precise net sales outlook for 2013 on December 17, 2013. The reason for the improved operating result outlook of the last
quarter was higher than expected net sales and better profitability in projects in the Automotive Business Segment. EB expected the operating result of the whole year 2013 to be approximately at the level of EUR 8 million (restated operating profit without non-recurring items of EUR 5.1 million, in 2012). Net sales was expected to grow slightly more than expected in the last quarter and net sales of 2013 to be approximately at the level of EUR 200 million (restated net sales of EUR 173.9 million, in 2012).