Eltek ASA: Eltek reorganizes its renewable business

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Drammen, 12 December 2013 - Eltek has decided to reorganize the renewable segment, as a part of its ongoing cultivation of the core business areas. Write-downs of inventory, capitalized R&D and provisions for future obligations will impact the Income Statement for the fourth quarter negatively by approximately NOK 100 million.
As stated in the third quarter report, Eltek was evaluating the future of its renewable business with a decision to be made in the fourth quarter. A project has now been established to manage the reorganization of this business.
 
The solar industry is facing challenges with dropping sales and margins. Despite our proven technology platform, we have not been able to build a scalable business under the current difficult market conditions. As a result, Eltek has decided to write down the inventory of grid connected solar inverters and capitalized R&D, and provide for future cost related to operations and customer obligations says Björn Wigström, CFO of Eltek.
 
Eltek expects the write-downs and provisions to amount to approximately NOK 100 million, to be accounted for in the fourth quarter 2013. Less than NOK 35 million of this amount is cash effective. 
 
The organization involved with grid connected inverters will be adjusted to meet the market situation.
 
We intend to maintain the key competence and technology in the company, as this has great value for future business opportunities within our core business areas.  We will continue to support our customers in this segment, and also seek viable options such as manufacturing partnerships, licensing or other ways to recover value, says Wigström.

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