Amtel says cash-flow situation better than expected

Amsterdam, the Netherlands - Amtel-Vredestein N.V. has said it expects to reach positive operating cash-flow (net earnings plus depreciation) on a consolidated basis during the first quarter of 2006. The company told investors during the period leading up to its IPO in November 2005 that it did not expect to turn cash flow positive until the end of 2006.

Amtel-Vredestein's ceo, Alexey Gurin said, "As a result of our restructuring and disposal of loss-producing or cash-draining operations, we are building a self-sustaining, market-driven company for the future. The first major result of our efforts is that we plan to reach positive operating cash-flow much earlier than expected.” The company intends to use excess cash to reduce debt and to fund investments.

The company also announced that it will disclose its earnings results for the first quarter of 2006 on May 16 to coincide with the early release of its 2005 annual results.

Amtel-Vredestein said it will write-off approximately $106 million in 2005. Half of this is to adjust for the difference in sale price and book asset value of two large subsidiaries sold in the last few months. The Krasnoyarsk tyre factory was over-valued by $48 million, while the sale of the Volgograd carbon black unit has resulted in a $5 million write-off.

Other non-cash items of approximately $37 million include one-off adjustments to meet IFRS requirements; as well as write-downs of fixed assets and goodwill associated with the suspension of bicycle and truck tyre production at the company's Voronezh facility. In addition to non-cash adjustments, the company will also write-off restructuring charges - primarily due to redundancy costs - of approximately $9 million, plus approximately $7 million in IPO share options that were issued and disclosed at the time of the company's IPO in November.