Reductions in profit and loss accounts and balance sheet

In a stock exchange notice of 17 October 2013, Infratek ASA (the Company) announced a reduction of its estimate of operating profit before financial costs and tax (EBIT), compared to the estimate as of 26 June 2013 of NOK 116 million. The main reason for the reduction was stated to be reduced profitability in Sweden, due to tight margins and losses on projects. In addition, the Company announced an expected reduction of the estimate due to potential write-down of balance sheet values including intangible and fixed assets. 

This autumn, the Company has been reviewing the values of the group’s assets and liabilities. Decisions have been made regarding write-downs and provisions that will reduce EBIT of NOK 122 million. After tax, the effect on the profit and loss accounts is estimated to NOK 99 million. The effect will be in the fourth quarter of 2013.

The conclusions are based on analyses of the development of profitability, future obligations, updated estimates of intangible assets, review of activated IT costs as well as a valuation of fixed assets and inventory. The most material balance sheet items affected by the analyses are:

• Impairment of goodwill of NOK 40 million
• Write-down of fixed assets and inventory of NOK 37 million
• Provision for losses on lease contracts of NOK 25 million
• Costs related to operative adjustments and severance pay estimated to NOK 20 million

Following these reductions, the board of directors expects that Infratek ASA's profit will be negative for 2013. The cash effect for 2013 will be negatively impacted with approximately NOK 15 million. The estimated future effect on EBIT will be positive and is estimated to NOK 10 million in 2014 due to lower depreciation and a reversal of the provision for losses on lease contracts.

The board of directors believe these adjustments contribute to a more correct valuation of assets in the balance sheet for 2013, and a subsequent amended depreciation profile. The Company is continuing its efforts to increase the profitability of the business.

Please note that the above information is based on the Company's assessments, which in connection with the presentation of the annual profit and loss accounts, will be subject to ordinary audit and review.

Board of Directors Infratek ASA

Oslo, 19 December 2013

For more information, please contact:

Vibecke Skjolde, CFO               

+47 916 62 110, vibecke.skjolde@infratek.no

Lars Bangen, acting CEO

+47 907 81 223, lars.bangen@infratek.no

 
About Infratek ASA:
Infratek is one of the leading Nordic players within building, operating and securing of critical infrastructure. The Group delivers a wide range of services for power grids, railway systems, fiber networks, district heating, public street lighting and technical high security solutions. Infratek has 1,700 employees in Norway, Sweden, Finland and Denmark, and had revenues of NOK 2.8 billion in 2012. Infratek is listed on the Oslo Stock Exchange. For further information, please see www.infratek.no.