Vienna - Austrian company AT&S, the leading producer of printed circuit boards in Europe, said Thursday its first quarter net income dropped 46 per cent to 5 million euros (7.9 million dollars), down from 9.2 million euros in the same period last year.

Seasonal factors and a difficult market environment, combined with a weak US dollar and wage increases contributed to the results, the company said in its report.

Pre-tax profits were down 42 per cent to 5.3 million euros. Earnings before interest and taxes (EBIT) fell to 5.6 million euros, 22 per cent less than 7.8 million euros in the first quarter of 2007.

First quarter total revenues remained almost unchanged at 115.2 million euros - up a scant 0.4 per cent.

Gross profit in the first three months of 2008 was down to 15.9 million euros, a year-on-year decrease of 15 per cent.

Rising commodity, energy and personnel costs as well as the weak dollar posed challenges for the company, Austrian news agency APA quoted AT&S CEO Harald Sommerer as saying.

A seasonal slump and the difficult economic environment led to lower use of production capacity in the first quarter and to higher pressure on margins, AT&S said in its statement.

Despite the latest results and an unfavourable outlook for 2008, Sommerer said AT&S would increase production capacity in China and build an additional factory in Nanjangud, India until 2009. (dpa)