Elektrobit Oyj - Company Announcement

ELEKTROBIT CORPORATION (EB) LOWERS ITS PROFIT GUIDANCE FOR 2012 DUE TO NON-RECURRING ITEMS WEAKENING THE FOURTH QUARTER AND GIVES MORE PRECISE NET SALES OUTLOOK FOR 2012

STOCK EXCHANGE RELEASE
Free for publication on January 10, 2013, at 10.15 pm (CET+1)
ELEKTROBIT  CORPORATION (EB)  LOWERS ITS  PROFIT GUIDANCE  FOR 2012 DUE  TO NON-
RECURRING  ITEMS WEAKENING THE  FOURTH QUARTER AND  GIVES MORE PRECISE NET SALES
OUTLOOK FOR 2012

Elektrobit  Corporation  (EB)  lowers  its  profit  guidance for 2012 due to the
weaker  than expected fourth quarter. The reason for the weakening of the fourth
quarter  is the  non-recurring items  of approximately  EUR 4 million  in total,
booked  as result of  the financial challenges  faced by a  US based customer of
EB's  subsidiary, Elektrobit Inc.  EB expects the operating result of the fourth
quarter of 2012 to be approximately between EUR -0.4 million and EUR 1.1 million
(EUR  3.5 million, 4Q 2011), the operating result of  the second half of 2012 to
be  approximately between EUR 1.7 million  and EUR 3.2 million (EUR 0.4 million,
2H 2011), and  the operating result  of the whole  year 2012 to be approximately
between  EUR 2.2 million and EUR 3.7 million (operating loss of EUR -4.0 million
in  2011). The expected operating results  presented above include non-recurring
items that caused the lowering of the fourth quarter profit guidance, as well as
non-recurring  income  and  costs  related  to  the  reorganization processes of
TerreStar companies, booked earlier in 2012.

The  outlook for the net  sales is expected to  develop as earlier estimated and
thus  EB  expects  that  the  net  sales  of  the fourth quarter of 2012 will be
approximately EUR 57 million (EUR 49.0 million in 4Q 2011), the net sales of the
second  half of 2012 is expected to  be approximately EUR 104 million (EUR 86.1
million  in 2H 2011) and  the net  sales of  the whole  year 2012 is expected be
approximately EUR 200 million (EUR 162.2 million in 2011).

Based  on the information received by EB's subsidiary, Elektrobit Inc., from the
US  based  customer,  the  customer  does  not  have enough funds to satisfy its
contractual  obligations  towards  EB.  Due  to  the  significant  risk  of  the
customer's  insolvency, EB books  an impairment of  all accounts receivable from
the  customer, will  not recognize  revenue for  the work  already done  for the
customer  project, and will book a  cost reserve related to purchase obligations
of the customer project. As a result EB's operating result of the fourth quarter
decreases by approximately EUR 4 million in total.

In  the  earlier  guidance,  given  in  the interim report published on November
6, 2012, EB  expected for the year 2012 that net sales and operating result will
grow  clearly  from  the  previous  year  (net  sales  of EUR 162.2 million, and
operating  loss of  EUR -4.0  million in  2011). For the  second half of 2012 EB
expected  that the net sales will grow clearly (EUR 86.1 million in 2H 2011) and
operating result to be clearly positive (EUR 0.4 million in 2H 2011). Due to the
seasonal  nature of the EB's  business and due to  the holiday period during the
third quarter, the net sales and operating result without non-recurring items in
the fourth quarter were expected to be higher than in the third quarter of 2012
(net  sales EUR 47.0 million,  operating profit without  non-recurring items EUR
0.8 million, 3Q 2012).

The above mentioned customer project of EB's Wireless Business Segment was based
on  the EB's Specialized Device Platform technology to be used in the customer's
mobile  devices.  Financial  challenges  of  the abovementioned customer and the
related  financial implications for EB, will  not affect the further development
of EB's Specialized Device Platform, or serving of other customers.

EB  will publish its Financial Statement  Bulletin on February 19, 2013 at 8.00
am.

Oulu, January 10, 2013

Elektrobit Corporation
Jukka Harju
CEO

Further information:
Jukka Harju
CEO
Tel. +358 40 344 5466

Distribution:
NASDAQ OMX Helsinki
Principal media

Elektrobit (EB)
EB creates advanced technology and turns it into enriching end-user experiences.
EB  is specialized  in demanding  embedded software  and hardware  solutions for
wireless and automotive industries. The net sales for the year 2011 totaled MEUR
162.2. Elektrobit    Corporation    is    listed   on   NASDAQ   OMX   Helsinki.
www.elektrobit.com

[HUG#1669721]