Can you please comment on the Operating Result breakdown for Europe, Asia and the Americas provided in the January-June Interim Report. Why is the European result negative?

Shareholder, name withheld

The Operating Result breakdown reflects the net result of SinterCast’s local expenses and local revenues in the three main geographical sectors. As a Swedish company, with R&D, production, engineering service and administration based in Katrineholm and commercial support provided from London, the vast majority of our operating expenses are based in Europe. Even when our engineering resources or sales efforts are applied to a project in Asia or the Americas, the personnel and R&D expenses are allocated to Europe – where the people are based and where the expenses are incurred.

SinterCast provides a result breakdown for Europe, Asia and the Americas in order to comply with reporting requirements. However, this reporting requirement is more relevant to the larger multinational companies that have local organisations to support their local business activities. As long as SinterCast continues to consolidate its technical activities and resources in Katrineholm, and use Katrineholm-based personnel to support worldwide customer activities, it will not be realistic to only balance the European expenses against the European revenues. For SinterCast, it is more appropriate to consider the Group result rather than the individual geographical sectors.