Doro hit by continued components shortage and strong US dollar
Doro hit by continued components shortage and strong US dollar Doro, the Lund-based telecommunications company listed on the OTC-list of the OM Stockholm Exchange, has continued to be hit by the global components shortage and a strong US dollar. Continued components shortage The shortage of different components has continued into Q2. The shortage has been caused by a global shortage of manufacturing capacity and has mainly affected DECT - digital wireless telephones. The main reason is the substantial demand for mobile telephones. DORO's size and importance as a purchaser of different telephony products gives it access to the components required through its wide contact network. Delivery orders are in place until Q4. The shortage of products increases the purchase price and logistics costs. New projects have also been delayed. DORO does not foresee any let up in the global components shortage in 2000. Strong Dollar A majority of DORO's products are bought in US dollars and sold in other currencies. The purchase price usually drops for each different product. The price reduction level has usually absorbed the USD exchange rate changes. DORO has a currency policy, where, a limited amount (around 25% of the flow) is hedged in US dollars. Due to the components shortage, suppliers' prices are steady or rising. The very high USD exchange rate and the rapid rise during the quarter, have only been marginally compensated for in sales prices. Considerably lower profit in Q2 The joint effect of two negative factors like a global components shortage and a strong US dollar, cannot be compensated by product launches, corporate acquisitions during 1999 (UpGrade of Sweden and companies in France and Poland) and the launch of exchanges or international broadband products. DORO considers that the profit for Q2 will be considerably lower than Q2 1999. A loss in Q2 cannot be ruled out. DORO believes that the conditions for reaching last year's profit (a pre-tax profit of SEK 65 million) still exist, if the effects of the components shortage and strong US dollar do not worsen. DORO will issue its Q2 report on 17 July. More information about DORO can be found at: www.doro.com For further information, please contact: DORO's CEO, Claes Bühler +46 46 280 50 61 DORO's CFO, Ingvar Karlsson +46 46 280 50 62 Lund 21 June 2000 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/06/21/20000621BIT00070/bit0001.doc http://www.bit.se/bitonline/2000/06/21/20000621BIT00070/bit0002.pdf