Nera Networks results will affect Eltek Q3 results negatively

A review of the business activities in Nera Networks has concluded with

significant adjustments of project and operating costs and bad debt provisions

which will negatively affect Eltek ASA's third quarter 2010 results. The

underlying activity level in the microwave transmission business has remained

subdued and including the above charges of approximately NOK 75 million Nera

Networks is expected to report EBIT of approximately NOK -105 million in the

third quarter 2010. The cash effect of the charges mostly relates to prior

quarters and will not have a significant impact on cash flow in the third

quarter.

Nera Networks is a wholly owned subsidiary of Eltek ASA, which announces its

interim results for the third quarter 21 October 2010.

A greater part of the charges relate to the operations in Brazil, for which Nera

Networks took similar charges of NOK 27 million in the interim results for the

second quarter and first half year 2010. Nera Networks has taken measures to

remedy the inadequacies uncovered in project management and financial control in

the Brazilian operations, including the appointment of a new management team

whereby the country manager, finance manager and operations manager have been

replaced.

For further information, please contact:

Jørgen Larsen, CEO in Eltek ASA, tel +47 9052 7930

Pål Skistad, CFO in Eltek ASA, tel +47 9085 0378

Eltek is a strategic technology partner within power solutions and microwave

radio transmission, through its three business units Eltek Valere, Nera Networks

and Nera Telecommunications. The company reported revenue of NOK 5.8 billion in

2009, and had close to 3,330 employees in more than 50 countries at the end of

the year. Eltek is listed on Oslo Stock Exchange and headquartered in Drammen,

Norway.

Nera Networks designs, develops, manufactures and markets a broad portfolio of

point-to-point microwave transmission radios under the Evolution brand name. The

company has extensive systems and project management expertise for turn-key

deliveries and after sales support and services. Headquartered in Bergen,

Norway, the company counts approximately 800 employees and reported revenue of

more than NOK 1.8 billion in 2009.

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

[HUG#1450693]

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