Increased Extraordinary Costs for Haldex
20 Dec, 2016, 06:31 GMT
STOCKHOLM, Sweden, Dec 20, 2016 /PRNewswire/ --
On July 14 the process related to the public offer on Haldex was initiated, which is still on-going and expected to continue into next year. Haldex' Board of Directors has previously communicated that the public offer process might be disruptive to Haldex' business.
Increased extraordinary costs
Uncertainty about Haldex' future owner situation has resulted in increased costs to be able to win new business, maintain good customer relationships and support the review of the competitive situation:
- Development contracts are funded by Haldex, instead of the traditional cost split between Haldex and the customer. This is a result of customers rating the risk of non-fulfillment of the contracts as high.
- Increased warranty provisions due to more generous customer obligations.
- Costs to retain and motivate staff. Recruitment of new staff has become increasingly difficult.
- Significantly higher legal costs for the on-going review of the competitive situation related to the public offer. Legal costs are expected to increase since the US Antitrust authorities has announced that they will initiate a so-called second request of its competitive review.
The cost increase for the fourth quarter is estimated to app. 70 MSEK (currency converted) and will be included in the 2016 result as extraordinary costs. Legal costs are expected to increase while other extraordinary costs are expected to decrease in 2017.
Full year 2016
The fourth quarter is typically the quarter of the year with the lowest revenue. Customer uncertainty about the future owner situation has resulted in difficulties in signing new customer contracts. In North America, which represents app. half of Haldex' revenue, the market situation has continued to deteriorate during all of 2016. Overall, Haldex is expecting an operating margin, excluding extraordinary costs, at app. 6.5% for 2016, compared to the previous estimate of app. 7%,
CONTACT:
For further information visit http://corporate.haldex.com or contact:
Bo Annvik, President & CEO, +46 418 476000
Åke Bengtsson, CFO, +46 418 476000
Catharina Paulcén, SVP Corporate Communications, catharina.paulcen@haldex.com or
+46 418-476157
Haldex AB (publ) is required to publish the above information under the EU Market Abuse Regulation. The information was submitted for publication by the Haldex media contact stated in the release on December 20, 2016 at 7.20 CET.
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http://news.cision.com/haldex/r/increased-extraordinary-costs-for-haldex,c2153541
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SOURCE Haldex