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IPTE: Results Q3 2009

IPTE NV, (Euronext Brussel: IPTE) reports sales of EUR 41.8 million for the 3rd quarter of 2009, against sales of EUR 50.7 million during the same period in the preceding year. Operating results in the 3rd quarter of 2009 showed a loss of EUR 2.9 million, compared with a profit of EUR 193,000 million during the same quarter in 2008. The net result amounted to a loss of EUR 3 million over the reporting period, compared to EUR 203,000 profit in the preceding year.

Orders at the end of the 3rd quarter 2009 rose to EUR 69.0 million, against EUR 66.2 million at the end of the 2nd quarter. The quarter saw sales of the Automation division drop to EUR 14.3 million, down from the 2008 figure of EUR 15.2 million. Orders declined from EUR 15.5 million at the end of the 2nd quarter of 2009 to EUR 12.2 million at the end of the 3rd quarter.

Sales of the Contract Manufacturing division declined from EUR 35.7 million in 2008 to EUR 27.5 million in 2009. Orders for the division rose to EUR 56.8 million, compared to EUR 50.7 million at the end of the 2nd quarter.

EUR 450,000 in restructuring costs were booked during the 3rd quarter (EUR 1.3 million for the first half of the year). Booked restructuring costs thus total EUR 1,750,000 on a YTD basis.

Further measures were taken to reduce headcount from 2,016 FTEs at the end of the 2nd quarter to 1,855 FTEs at the end of the 3rd quarter (current status: Automation division: 435 FTEs; Contract Manufacturing division: 1,420 FTEs).

Automation division
Though orders in the Automation division held up well during the first half, there was a sharp drop in the 3rd quarter, with orders at the end of the quarter reaching an all-time low of EUR 12.2 million. During the first 5 weeks of the fourth quarter order intake has picked up sharply, getting back to first half year levels.

The Board has identified all possible options and will come to a decision in the coming months about the structural measures to be taken to improve the automation business.

During the third quarter, a major Australian automation customer, Solar Systems, filed for Chapter 11 protection under Australian law. IPTE has an outstanding claim of EUR 2.9 million from this customer. Based on the currently known facts, the Board has decided to not yet book any provision for this claim. The main factors behind this decision are: the receivers at Solar Systems are working on a scenario to get the company going again, with the production line supplied by IPTE playing a crucial role. The line cannot run without IPTE making it operational. The probability of getting the company going again is seen to be realistic, meaning that IPTE’s task of providing the finishing touches to the line to make it operational should take place. IPTE will only carry out this work against payment.

Contract Manufacturing division
Contract Manufacturing orders are up for the first time this year, at EUR 56 million, against EUR 50 million at the end of the 2nd quarter. We believe that the decline in sales has bottomed out in the third quarter, with contract manufacturing business slowly starting to recover. Following the restructuring measures conducted in the past quarters, during which production was adapted to current market volumes, fourth quarter business is expected to deliver an improvement in results.

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