Hitt og þetta 27. apríl 2006


* Net sales of the first quarter of 2006 were EUR 21.6 million (EUR 20.9 million in 2005). Net sales increased by 3.5 percent compared to the previous year. * Operating loss was 0.5 million (loss EUR 1.4 million). Operating loss includes EUR 0.3 million of restructuring costs (EUR 1.2 million) * Loss before taxes was EUR 1.0 million (loss EUR 1.9 million) * Earnings per share were EUR -0.007 (EUR -0.011) * Order backlog on March 31, 2006 was EUR 20.4 million (EUR 15.5 million)


Net Sales

Net sales of the Group totalled EUR 21.6 million (EUR 20.9 million in 2005).

In the first quarter of 2006 demand was at a good level in all market areas.

Evox Rifa's US distribution center in El Paso, Texas, was moved to Chicago in March, and the Chicago sales office was relocated to the same premises.


Operating loss of the Group was EUR 0.5 million (loss EUR 1.4 million) and loss before taxes was EUR 1.0 million (loss EUR 1.9 million). The operating loss includes EUR 0.3 million of one-time costs related to production transfers and restructuring of the US operations, and EUR 0.1 million of bad debts. The result of the first quarter includes the capital gain of EUR 0.7 million regarding the company's real estate in Kalmar, Sweden.

Earnings per share were EUR -0,007 (EUR -0.011) and shareholders' equity per share was EUR 0.034 (EUR 0.077).

Order backlog

The order backlog of the Group was EUR 20.4 million at the end of the first quarter of 2006 (EUR 15.5 million). The order backlog increased during the first quarter of 2006. At the end of 2005 the order backlog was EUR 17.7 million. The order backlog is expected to remain on a good level in the second quarter of 2006.


Liquid assets of the Group were EUR 0.6 million (EUR 7.7 million) and the equity ratio was 11.8 % (22.5%) at the end of the period. If the convertible capital loan is counted as shareholders' equity, the equity ratio is 21,5 %. Investments into the expansion of production at the Finnish plant, the closure of the Kalmar plant in Sweden and the low profitability of the Finnish plant, and the increased need of working capital weakened the Group's liquidity during the first quarter of the year. The Group's financial position continued to be tight and financing negotiations to ensure net working capital and investment financing are ongoing.

BHC Components Ltd. reached an agreement in February 2006 on the main conditions of a contract to sell the real estate owned by BHC. The contract is expected to be completed during the second quarter of 2006. After the deal, BHC will continue in the premises as a lessee.

The sale of the Kalmar production property in Sweden to Peab Sverige AB took place in March. The proceeds were used to reduce the loans relating to the terminated production operations in Kalmar.

The shares (80%) of Nantong Evox Rifa Electrolytics Co. Ltd. were sold to BHC Components Ltd. through an internal purchase in March. This was done in order to clarify the structure of the Group and to make the structure better correspond to operations.

Investments into manufacturing equipment were EUR 0.3 million (EUR 1.3 million).


The nominal value of the shares of Evox Rifa Group Oyj is EUR 0.05, the number of shares was 177.221.018 on March 31, 2006 and the share capital was EUR 8.861.051,90.


The Annual General Meeting on April 20, 2006 decided, according to the Board's proposal, not to pay a dividend for the fiscal period ended on December 31, 2005.

Mr. Jerker Molander, Mr. Mikko J. Aro, Mr. Henrik Ehrnrooth, Mr. Jarmo Niemi and Mr. Pertti Laine were re-elected as Members of the Board. the Board of Directors has elected Henrik Ehrnrooth as Chairman and Jerker Molander as Vice Chairman for the Board of Directors.

The Authorized Public Accounting Firm KPMG Oy was re-appointed auditor of the company.

The Annual General Meeting decided to approve the proposal of the Board to authorise the Board to decide in deviation from the shareholders' pre-emptive right on new issues and/or convertible loans so that the increase of the share capital can be maximum EUR 1.772.210.


The average number of personnel in Evox Rifa Group was 1343 during the first quarter of 2006 (1290 in the same period in 2005). The number of operative personnel increased both in Asia and Europe due to improved utilisation rates of the plants.


Net sales of the electrolytic capacitors product group were EUR 11.6 million in the first quarter of 2006 (EUR 10.7 million). Profitability of the product group continued at a satisfactory level. Demand improved in all market areas and capacity utilisation rates of the plants improved. The order backlog was at a good level at the end of the quarter. The production of screw terminal electrolytic capacitors started at the Evox Rifa plant in Nantong, China.

Net sales of the film capacitor product group were EUR 10.1 million (EUR 10.2 million in 2005). Order backlog was at a good level and capacity utilisation rates of the plants improved during the first half of the year.

Production at the Kalmar plant in Sweden ended as planned at the end of 2005. This led to doubling of production at the Finnish plant. By the end of the quarter, the plant reached the qualitative targets that were set for the new production, but productivity was below the set target. The efforts to secure the delivery reliability caused higher additional costs at the Finnish plant than estimated, and therefore the plant's operating result was strongly negative. However, the order backlog of the plant is at a high level. Improvements in production efficiency and productivity are the main targets for the second quarter.

It is estimated that the full benefits from the closure of the Kalmar plant, annual savings of some EUR 3 million, will start to realise beginning from the third quarter of 2006.


The first quarter of 2006 was a period of good demand, and a strong demand is expected to continue in the second quarter. Demand in Europe is estimated to remain at the level of 2005. However, rapid changes in the market are quite possible.

Evox Rifa Group's most important customer groups are expected to continue developing at a steady pace, and the growth of the business operations in Asia of the major partners of the Group is expected to continue.

The weak result of the Finnish plant and its increased need for working capital have tied up Group's liquid funds. The productivity of the plant is expected to improve during the remaining quarters of the year which, if materialised, will lead to an improved operating result. In addition, the increased production at the plant in China is expected to add to the positive development of the profit. Hard price pressures will remain and the Group's financial situation will continue to be tight.

The figures of this Financial Report are unaudited.

In Espoo on April 27, 2006


Tuula Ylhäinen President & CEO

The full report including tables can be downloaded from the following link: