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Sector
Technology
Size
Small Cap
Market Cap £209.5m
Enterprise Value £207.6m
Revenue £68.2m
Position in Universe 704th / 1838

ELEKTROBIT CORPORATION (EB) INTERIM REPORT JANUARY-SEPTEMBER 2013 - Part 1

Thu 7th November, 2013 6:02am

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20131107:nHUGdmXy


STOCK EXCHANGE RELEASE
Free for publication on November 7, 2013 at 8.00 am

ELEKTROBIT CORPORATION (EB) INTERIM REPORT JANUARY-SEPTEMBER 2013 

COMPARABLE NET SALES GREW AND OPERATING PROFIT IMPROVED FROM THE PREVIOUS YEAR

From the beginning of 2013 EB has applied the new IFRS10 and IFRS11 standards. As a result the
proportion of net sales and operating result of e.solutions GmbH, a jointly owned company of EB
and AUDI, to be consolidated into Elektrobit group's consolidated financial statements has
changed. For comparability, all 2012 figures presented for comparison are restated assuming that
the proportionate consolidation method would have been applied already in 2012.

EB's figures are divided between Continuing and Discontinuing Operations as provided by the IFRS5
standard. In this interim report, Test Tools product business, sold on January 31, 2013, is
classified as Discontinuing Operations.

SUMMARY JULY - SEPTEMBER 2013

·         Net sales of the July - September 2013 from continuing operations grew to EUR 45.7
million (restated net sales of EUR 41.5 million, 3Q 2012), representing an increase of 10.1 %
year-on-year. 

·         Operating profit from continuing operations was EUR 1.0 million (restated operating
profit of EUR 2.0 million including non-recurring income of EUR 1.2 million resulting from the
settlement payment in the reorganization cases of TerreStar Corporation, 3Q 2012).

·         Net cash flow was EUR 1.8 million (EUR 9.9 million including an approximately EUR 10.8
million positive cash flow effect resulting from the settlement payment in the reorganization
cases of TerreStar Corporation, 3Q 2012).

·         Earnings per share from continuing operations were EUR 0.006 (EUR 0.013, 3Q 2012) and
earnings per share from continuing and discontinuing operations were EUR 0.011 (EUR 0.012, 3Q
2012).

·         In August EB announced to adjust its cost level due to the weakened demand outlook for
the rest of the year and to aim at EUR 1.5 million cost savings by temporarily laying off at the
maximum of 150 employees in Wireless Business Segment. The temporary layoffs were estimated to
last no longer than until the end of January 2014.

SUMMARY JANUARY - SEPTEMBER 2013

·         Net sales of the January - September 2013 from continuing operations grew to EUR 139.8
million (restated net sales of EUR 125.6 million, 1-9 2012), representing an increase of 11.3 %
year-on-year. 

·         Operating profit from continuing operations was EUR 2.4 million including non-recurring
costs of approximately EUR 0.8 million resulting from the cost saving measures in the Wireless
Business Segment in the first quarter of 2013 (restated operating profit of EUR 1.6 million
including non-recurring costs of EUR 1.2 million related to collecting the receivables from
TerreStar companies, and non-recurring income of EUR 1.2 million resulting from the settlement
payment in the reorganization cases of TerreStar Corporation, 1-9 2012).

·         Net cash flow was EUR 29.6 million including non-recurring net cash flow of about EUR 28
million resulting from the sale of the Test Tools product business (EUR 6.4 million, 1-9 2012).

·         Earnings per share from continuing operations were EUR 0.012 (EUR 0.009, 1-9 2012) and
earnings per share from continuing and discontinuing operations were EUR 0.199 (EUR 0.011, 1-9
2012).

·         A total of 307,690 new shares were subscribed between April 2 and October 8, 2013 by
virtue of the option rights 2008A and 2008B. The share subscription prices were recorded in the
Company's invested non-restricted equity fund. After the registration of the new shares, the
number of shares in Elektrobit Corporation's totals 129,720,380. 

·         The Board of Directors proposes to the Extraordinary General Meeting to be held on
December 4, 2013 that on the basis of the financial statements adopted for the financial period
ended on December 31, 2012, funds from the invested non-restricted equity fund be distributed to
shareholders as a repayment of capital, with the capital repayment amounting to EUR 0.11 per
share. The aggregate amount of the distribution based on the number of shares as of the date of
the notice to General Meeting would amount to EUR 14,269,241.80. 
 
 Group, continuing operations (MEUR)                   3Q 13  3Q 12 restated    1-9 13  1-9 12 restated    2012 restated 
 NET SALES                                              45.7            41.5     139.8            125.6            173.9 
 OPERATING PROFIT / LOSS                                 1.0             2.0       2.4              1.6              1.1 
 Operating profit / loss, % from net sales             2.3 %           4.7 %     1.7 %            1.2 %            0.6 % 
 Operating profit /loss without non-recurring items      1.0             0.7       3.3              1.5              5.1 
 EBITDA                                                  3.3             3.7       9.1              6.6              8.1 
 CASH AND OTHER LIQUID ASSETS                           43.9            15.7      43.9             15.7             14.3 
 EQUITY RATIO (%)                                     63.9 %          55.0 %    63.9 %           55.0 %           55.0 % 
 EARNINGS PER SHARE (EUR)                              0.006           0.013     0.012            0.009            0.008 
 
 
 Automotive Business Segment (MEUR)          3Q 13  3Q 12 restated    1-9 13  1-9 12 restated    2012 restated 
 NET SALES                                    34.1            27.4      97.2             78.7            110.6 
 OPERATING PROFIT / LOSS                       1.9            -0.0       3.1              0.6              3.3 
 Operating profit / loss, % from net sales   5.7 %          -0.1 %     3.2 %            0.8 %            2.9 % 
 EBITDA                                        3.5             1.0       7.6              3.6              7.3 
 
 
 Wireless Business Segment, continuing operations (MEUR)    3Q 13      3Q 12    1-9 13     1-9 12         2012 
                                                                   
restated            
restated    
restated 
 NET SALES                                                   11.6       14.1      42.8       47.1         63.5 
 OPERATING PROFIT / LOSS                                     -0.9        2.0      -0.8        1.0         -2.2 
 Operating profit / loss, % from net sales                 -7.9 %     14.1 %    -1.8 %      2.0 %       -3.5 % 
 Operating profit /loss without non-recurring items          -0.9        0.8       0.1        1.0          1.8 
 EBITDA                                                      -0.2        2.7       1.4        3.0          0.7 
 
 
EB'S CEO JUKKA HARJU:

"During January-September 2013 EB's net sales grew by 11.3 per cent year-on-year due to the
continued strong growth of the Automotive Business Segment. Net sales of the Wireless Business
Segment decreased year-on-year due to the decreased service demand in the authority market. EB's
operating result improved from previous year and was EUR 2.4 million positive. Operating profit of
the Automotive Business Segment improved year-on-year due to the increased software license sales
and improved management of projects. 

EB's outlook for net sales growth in 2013 remains good thanks to the growth of the Automotive
Business Segment. In the Wireless Business Segment, product based income is expected in the fourth
quarter, in addition to R&D service sales, as the product deliveries of EB's tactical
communication system will begin to Finnish Defence Forces, and a batch of the special terminal
products will be delivered to a customer for the authority markets. EB has a good opportunity to
reach the same operating profit level as last year without non-recurring items."

OUTLOOK FOR 2013

The changes resulting from the change in the method of consolidation of e.solutions GmbH, the
jointly owned company with AUDI have been taken into account in the 2013 outlook for net sales and
operating result presented below. More information about this has been presented in this interim
report in the section "Change in the consolidation of the jointly owned company of EB and AUDI as
of January 1, 2013".

EB expects for the year 2013 that net sales will grow and operating result will be at the same
level as it was in 2012 without non-recurring items (restated net sales of EUR 173.9 million, and
restated operating profit without non-recurring items of EUR 5.1 million, in 2012). 

In the Automotive B
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