Perlos (FIN-01510 Vantaa; www.perlos.com) reported a first-quarter operating profit of EUR 4.4m compared with EUR 17.1m in the same period last year, blaming the drop on a high cost foundation due to capacity increases. The fall in performance comes as industrial unrest gathers at the company´s Ylöjärvi / Finland plant over management´s plans to close it and concentrate production elsewhere.

At the end of April, workers at the plant, which is one of seven in Finland and employs 600 out of a total of 2,900 people across the country and 5,800 worldwide, staged a one-day strike in advance of talks between management and employees over the future of the facility.

Perlos wants to discontinue production at Ylöjärvi in the first quarter of 2006 “at the latest,” as it said the site is isolated from its other Finnish plants, and, moreover, demand for the mechanical modules it manufactures for the mobile telephone industries in Asia, central Europe and the Americas is shifting towards emerging markets.

Commenting on Q1 results, CEO Isto Hantila said the operating profit setback reflects a 2% sales decline to EUR 124.4m. Net profit fell to EUR 1.8m from EUR 11.8m in Q1 2004. The company anticipates some year-on-year sales improvement in Q2. However net profit, excluding one-off items, is expected to be significantly lower than in the 2004 quarter.

Perlos said net sales and earnings progress in 2005 will focus heavily on the second half year, with a major share of net sales from new products. Full-year sales in the telecom- munications and electronics units are expected to increase in line with volume growth in the mobile telephone market.

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Perlos annual report 2004 as PDF document (806 KB)