SinterCast Results January-December 1998

SinterCast Results January-December 1998 SinterCast achieved technical break-through during 1998. Four installations of the SinterCast System 2000 Process Control Equipment took place, bringing the total number of production installations to five. SinterCast today plays a significant part in a number of engine programmes which will spearhead volume production of CGI. Therefore SinterCast has the conviction that CGI will come to play an increasingly important role in the automotive market of the future. The toughening emissions standards and the need for improving specific performance and fuel economy of Diesel engines will be met by a continual increase in cylinder pressures which in turn requires an increase in the specific material strength of the engine block and cylinder head. This leads automotive manufacturers to look further towards the benefits of CGI. During 1998, SinterCast announced a contract with Caterpillar Inc, a world leading engine manufacturer based in Illinois, USA. Installation of a SinterCast System 2000 was completed in January 1999. Two further installations of System 2000 took place in 1998 at VDP in Italy and at Sakana in Spain. Regular production of engine frames for Allen Industrial Power Group heavy stationary Diesel engines is on-going. The production volume of these engines, 10-17 tonnes each, has taken off during 1998, with an expected trend of expansion this year. A large European car manufacturer, which for competitive reasons wishes to remain anonymous, has chosen SinterCast CGI for the block of a high performance Diesel engine. This engine represents a landmark in automotive design and heralds the way for a new wave of state-of-the-art high performance Diesel engines for passenger cars. Following the installation of a SinterCast System 2000 at the Halberg Guss foundry in Gemany in 1998, series production of these engine blocks will begin during 1999. Cifunsa, one of North America´s largest independent foundries, continues to stimulate the demand for SinterCast CGI by marketing its CGI capability. During 1998, prototype castings of SinterCast CGI engine components continued in several foundries. These activities are concentrated to USA, Mexico, Brazil, Germany, Italy, Japan and Korea. In 1998, 2,840 prototype components (1040 engine blocks) were supplied to automotive manufacturers. Thus a vast experience is being accumulated among the leading foundries and automotive manufacturers to a number of leading car and truck manufacturers. For the second year, SinterCast, supported by AVL, a world-leading consultant in Diesel engine design, organised a CGI Design and Machining Workshop in November 1998. Some potentially revolutionary machining concepts were revealed, including a new cylinder boring tool. Also, new fine-boring technologies were revealed. Some 120 participants, representing leading machine tool companies, foundries and automotive manufacturers were present at the workshop. Following the two successful workshops held in Germany, a similar event is scheduled for April 1999 in the US, addressing mainly North and South American as well as Asian customers. Also this event will be co-sponsored by AVL and focus on design and machining issues. SinterCast has during 1998 helped bring about a Machining Consortium consisting of five leading European Automotive Manufacturers, the major German foundries and the University of Darmstadt. Within this consortium resources are pooled in order to evaluate optimal high speed machining methodologies for CGI both from a technical and economic point of view. SinterCast owns 20 patents and patent applications. Operating Result and Investments The Group's turnover for 1998 amounted to SEK 4.1 million (SEK 3.2 million for the previous year). The turnover mainly relates to income from production and installations. The result for the Group, after calculated tax, amounted to SEK -40.1 million, SEK -9.5 per share (SEK -67.2 million, SEK -16.4 per share). The change is primarily due to a cost reduction program, which has reduced the average number of employees from 48 for 1997 to 31 for 1998 and has resulted in a reduction of the operating costs by 35 % compared with 1997. Other operating income and other operating expenses relate to sub-letting of office space in SinterCast Ltd. The financial net is SEK 1.4 million lower than previous year, primarily due to changes in the Group's results and lower interest rate. Items affecting comparability in the Parent Company for 1997 and 1998 consist of provisions for receivables and conditional shareholders' contributions to Group companies, amounting to SEK 36.2 million (SEK 29.0 million). Investments by the Group during the period amounted to SEK 2.2 million (4.1 million). Liquidity The Group's liquidity on 31 December 1998 amounted to SEK 123.8 million (SEK 166.9 million). With estimated expense level but excluding expected revenues, this liquidity will cover the company's operation up to and inclusive of the year 2001. Still High Risk The commercial risk remains high until large-scale production has commenced. Annual Report The Annual Report, which will be available on April 1, will be sent to those who have requested such information from SinterCast AB (publ). The Annual Report can also be found on the SinterCast Website: http://www.sintercast. com Annual General Meeting The Annual General Meeting of SinterCast AB (publ) will be held on Monday 19 April 1999 at 16.00 at the premises of the Stockholm Stock Exchange, Källargränd 2, Stockholm. Interim Report The Interim Report January-March 1999 will be published 19 April 1999 Stockholm, 15 February 1999 On behalf of the Board of Directors Bertil Hagman President and CEO For further information: Bertil Hagman Tel +46 8-660 77 50 Fax +46 8-661 79 79 E-mail: info@sintercast.com For up-to date and relevant information on SinterCast: http://www.sintercast.com ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/02/15/19990215BIT00130/bit0001.doc Full report http://www.bit.se/bitonline/1999/02/15/19990215BIT00130/bit0002.pdf Full report