Earnings Release • Aug 21, 2008
Earnings Release
Open in ViewerOpens in native device viewer
Copenhagen, 21 August 2008
Announcement No. 6/2008
Danionics A/S Ny Vestergade 14, 2. DK 1471 København K, Denmark Telefon: +45 70 23 81 30 Telefax: +45 33 93 40 18 E-mail: [email protected] Website: www.danionics.dk CVR-nr.: 71 06 47 19
As expected, Danionics reported a loss for the first half of DKK 1.5 million before recognition of a DKK 5.0 million writedown of the loan capital to Danionics Asia. The writedown equals the amount which Danionics contributed as loan capital to Danionics Asia in the first half. Apart from the writedown, the first half financial performance was on a level with the results achieved in H1 2007, when Danionics reported a loss of DKK 1.1 million.
Revenue for the period related to commission income from Danionics Asia.
The loan capital to Danionics Asia is recognised in the amount of DKK 0, as against DKK 29.3 million at 30 June 2007. In connection with the presentation of the annual report for 2007, the loan capital was written down to DKK 0. This valuation was retained in H1 2008, and the capital contribution during this period has therefore been written down over the income statement.
Cash amounted to DKK 16.6 million. Equity amounted to DKK 17.1 million at the end of the half-year period, down from DKK 23.5 million at 31 December 2007. The reduction in equity corresponds to the net loss for the period.
Second-quarter financial performance was a disappointment. The technical problem with one of Danionics trial batteries mentioned in the interim report for Q1 2008 turned out to be a general problem.
Identifying the cause of the problem proved to be a major and time-consuming task, which led to a very low level of production output in April, May and June. Delaying the company s sales efforts and the scheduled capacity expansion, the fault-finding process will also have an adverse impact on the financial performance.
The root of the technical problem was identified in July. It turned out that one of the sub-suppliers of electrodes had changed material forming part of its product, and the factory had failed to discover this change.
The process underlined the necessity of sourcing in electrode production, and the company will now work to achieve this as soon as possible. The first production line has already been installed, and within the coming 1-2 months production of negative electrodes will commence.
The company has procured production line no. 2, which will be installed in the near future. The goal is to manufacture all electrodes in-house by the end of 1 st quarter of 2009.
The second quarter also brought positive events. The joint venture retains its new strategy of developing close relations with a limited number of key customers. Three of these key customers conducted an audit of the factory during H1 2008. Two of the audits have been finalised, and the first of the key customers has placed a production order for 50,000 batteries for shipment in September 2008.
The second key customer has confirmed that it would be interested in working with Danionics, ordering trial batteries from Danionics for a specific product.
A fourth new key customer has tested and approved a Danionics battery, placing a trial order for 20,000 batteries for shipment in September 2008.
Danionics now has 11 active customers, and its current order book for September amounts to 140,000 batteries. Although this is the largest figure for one month to date, break-even is still a long way off, and further growth will depend on how the products of the company's customers are received in the market.
Another positive event was the appointment of a new and highly experienced factory manager, Mr Richard Koh.
Richard Koh, who is from Singapore, has more than 25 years' experience in R&D, engineering and factory management from electronics and electro-chemical businesses. Educated in Singapore, Europe and the USA, he has been in charge of factories in Singapore, Hong Kong and China.
There is still substantial and growing demand for lithium polymer batteries, and the market is changing. Price and battery capacity were previously the key factors when it came to winning orders. More and more, however, product reliability is becoming a crucial factor, and key customers are also displaying an interest in environmental factors and working place environment at the factories with which they collaborate. In the long term, both of these factors will be to Danionics advantage.
Danionics retains the forecast for 2008 presented in the annual report for 2007 released on 10 March 2008. The results for 2008 will be impacted by marketing and sales costs concerning Danionics Asia and administrative expenses of approximately DKK 2.5 million.
As a result, the company expects an overall loss in the region of DKK 2-3 million after interest income but before recognition of the share of the profit or loss or value adjustment in Danionics Asia.
Moreover, the company may realise commission income if the sales efforts undertaken by Danionics A/S should result in the addition of new orders.
The company has in 2008 contributed additional operating capital to Danionics Asia of DKK 5 million till date. It is expected to contribute further DKK 5 million before the end of 2008.
For additional information, please contact:
Henning O. Jensen, Chief Executive Officer, tel. +45 70 23 81 30
| Full | |||
|---|---|---|---|
| H1 | H1 | year | |
| DKK'000 except key ratios | 2008 | 2007 | 2007 |
| Income statement: | |||
| Revenue | 1 | 0 | 0 |
| Production costs | 0 | 0 | 0 |
| Other operating income | 0 | 0 | 0 |
| Gross profit/loss | 1 | 0 | 0 |
| Administrative expenses | -1,909 | -1,650 | -2,776 |
| Operating loss (EBIT) | -1,908 | -1,650 | -2,776 |
| Impairment of investment in associate (joint venture) | -4,961 | 0 | -32,029 |
| Net financial expenses/income | 419 | 547 | 930 |
| Loss before tax | -6,450 | -1,103 | -33,875 |
| Tax on the profit/loss for the period | 0 | 0 | 0 |
| Net loss for the period | -6,450 | -1,103 | -33,875 |
| Balance sheet: | |||
| Assets | |||
| Investment in associate | 0 | 0 | 0 |
| Loan capital to associate | 0 | 29,326 | 0 |
| Other financial assets | 429 | 478 | 429 |
| Total financial assets | 429 | 29,804 | 429 |
| Receivables and prepayments | 1,239 | 509 | 593 |
| Cash | 16,580 | 27,814 | 23,840 |
| Total current assets | 17,819 | 28,323 | 24,433 |
| Total assets | 18,248 | 58,127 | 24,862 |
| Liabilities and equity | |||
| Total equity | 17,068 | 56,366 | 23,518 |
| Total non-current liabilities | 1,180 | 1,761 | 1,344 |
| Total liabilities and equity | 18,248 | 58,127 | 24,862 |
| Cash flow statement: | |||
| Cash flows, operating activities | -2,299 | -6,480 | -8,787 |
| Cash flows, investing activities | -4,961 | 0 | -23,005 |
| Cash flows, financing activities | 0 | 202 | -425 |
| Investments: | |||
| Financial assets | 4,961 | 0 | 23,005 |
| Total investments | 4,961 | 0 | 23,005 |
| Depreciation, amortisation and impairment | 4.961 | 0 | 32,029 |
| Key ratios: | |||
| Equity ratio (%) | 93.5 | 97.0 | 94.6 |
| Net asset value per share (DKK) | 1.22 | 4.04 | 1.68 |
| Market price per share, year end (DKK) | 6.20 | 18.70 | 11.60 |
| Average number of employees | 1 | 1 | 1 |
| Earnings per share (EPS) | -0.46 | -0.08 | -2.43 |
| Diluted earnings per share (EPS-D) | -0.45 | -0.08 | -2.36 |
| Net | Retained | |||
|---|---|---|---|---|
| revaluation | earnings | |||
| acc. to | incl. share | |||
| Share | the equity | premium | ||
| DKK 000 |
capital | method | account | Total |
| Equity | ||||
| 1 January 2007 | 13,946 | 474 | 43,447 | 57,867 |
| Capital increase, exercise of warrants | 19 | 0 | 183 | 202 |
| Fees, issuing agent | 0 | 0 | -600 | -600 |
| Net loss | 0 | 0 | -1,103 | -1,103 |
| Equity at 30 June 2007 | 13,965 | 474 | 41,927 | 56,366 |
| Equity | ||||
| 1 January 2008 |
13,965 | 425 | 9,128 | 23,518 |
| Net loss | 0 | 0 | -6,450 | -6,450 |
| Equity at 30 June 2008 | 13,965 | 425 | 2,678 | 17,068 |
The Board of Directors and the Management Board have today considered and adopted the interim report of Danionics A/S for the period 1 January 30 June 2008.
The interim report is presented in accordance with IAS 34 on interim financial reporting and additional Danish disclosure requirements for listed companies. The accounting policies applied in the interim report are unchanged from those applied in the annual report for 2007.
We consider the accounting policies to be adequate, the accounting estimates to be reasonable and the overall presentation of the interim report to be appropriate. In our opinion, the interim report gives a true and fair view of the company s assets and liabilities and financial position at 30 June 2008 and of the results of the company s operations and cash flows for the period 1 January 30 June 2008.
The interim report is unaudited.
Copenhagen, 21 August 2008
Henning O. Jensen
Chairman
Karsten Borch Frank Gad Henrik Ottosen
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.