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SAF Tehnika
Quarterly Report • Feb 5, 2014
2241_rns_2014-02-05_146c0464-8ae4-455c-a50c-a6c8bd27e6fa.pdf
Quarterly Report
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SAF Tehnika Consolidated Interim Report for 6 months and Q2 of financial year 2013/14 (July 1, 2013 – December 31, 2013)
TABLE OF CONTENTS
| Key data …………………………………………………………………… | 3 |
|---|---|
| Share and Shareholdings……………………………………………………… | 4 |
| Information on management board and supervisory council members…… | 5 |
| Statement of Board's Responsibility…………………………………… | 8 |
| Management Report………………………………………………………… | 9 |
| Consolidated Statement of Financial Position | 12 |
| Consolidated Statement of Profit or Loss for 6 months and Q2 of the financial year 2013/14………………………………………………………… |
13 |
| Consolidated cash flow statement for 6 months of the financial year 2013/14………………………………………………………………………… |
14 |
| Statement of Changes in Equity……………………………………………… | |
| 15 | |
| Notes for Interim Report……………………………………………………… | 15 |
| Note 1 Short-term investments……………………………………………… Note 2 Customer receivables………………………………………………… |
15 15 |
| Note 3 Other current receivables ………………………………………………. | |
| Note 4 Loans ………………………………………………………………… | |
| Note 5 Inventories…………….………………………………….…………. | |
| Note 6 Non-current physical assets …………………………………………. | |
| Note 7 Accounts payable…………………………………………………… | 16 16 16 16 17 |
| Note 8 Tax liabilities …………………………………………………………… | 17 |
| Note 9 Salary related accrued expenses ……………………………………… | |
| Note 10 Segment information…………………………………………… | 17 17 |
| Note 11 Bad receivables ….…………………………………………………. Note 12 Salaries, bonuses and social expenses …………………………… |
20 20 |
KEY DATA
SAF Tehnika (hereinafter – the Group) is a telecommunications equipment company engaged in the development, production and distribution of digital microwave radio equipment. SAF Tehnika products provide wireless backhaul solutions for digital voice and data transmission covering wide frequency range and providing equipment for both licensed and un-licensed frequencies.
Know-how in modern wireless data transmission technologies, creativity in solutions, accuracy in design, precision in production and logistics make SAF Tehnika a unique designer and manufacturer of point-to-point microwave data transmission equipment. Located in Northern Europe, SAF Tehnika managed to acquire and consolidate valuable locally available intellectual resources of the microelectronics industry and spread its presence to more than 100 countries, covering all relevant market segments worldwide within just a decade.
The complete product range offers solutions to mobile network operators, data service providers, and government and private companies. Since its establishment in 1999, SAF Tehnika competes with such multinational corporations as Ericsson, Huawei, Alcatel and NEC.
Currently the Group consists of SAF Tehnika JSC (hereinafter – the Parent) operating from Riga, Latvia, a wholly owned subsidiary "SAF North America LLC" and a joint-venture company "SAF Services LLC" where the Parent holds 50% of the company's shares. Both of the mentioned companies are operating from Denver, CO serving North American market.
SAF Tehnika JSC is a public joint stock company incorporated under the laws of the Republic of Latvia. The shares of AS SAF Tehnika are quoted on NASDAQ OMX Riga.
| Legal address: | Ganibu Dambis 24a | ||
|---|---|---|---|
| Riga, LV – 1005 |
|||
| Latvia | |||
| Commercial Registry Nr.: | 40003474109 | ||
| VAT Registry Nr.: | LV40003474109 | ||
| Beginning of financial year: | 01.07.2013 | ||
| End of financial year: | 30.06.2014 | ||
| Phone: | +371 67046840 | ||
| Fax: | +371 67046809 | ||
| E-mail: | [email protected] HTU UTH |
||
Share and Shareholdings
SAF Tehnika shareholders (over 5%) as of 21.11.2013
| Name | Ownership interest (%) | |||
|---|---|---|---|---|
| Didzis Liepkalns | 17.05% | |||
| Andrejs Grišāns | 10.03% | |||
| Normunds Bergs | 9.74% | |||
| Juris Ziema | 8.71% | |||
| Vents Lācars | 6.08% | |||
| SIA "Koka zirgs" | 5.27% |
SAF Tehnika share price and OMX Riga index development for the reporting period
SAF Tehnika (SAF1R)
Period: July 1, 2013 – December 31, 2013
Currency: LVL
Marketplace: NASDAQ OMX Riga
Information on management and supervisory board members
SAF Tehnika Management Board:
| Name | Position | Ownership interest (%) |
|---|---|---|
| Normunds Bergs | Chairman | owns 9.74% of shares |
| Didzis Liepkalns | Member | owns 17.05% of shares |
| Aira Loite | Member | owns 0.26% of shares |
SAF Tehnika Supervisory Board:
| Name | Position | Ownership interest (%) | ||
|---|---|---|---|---|
| Vents Lacars | Chairman | owns 6.08% of shares | ||
| Juris Ziema | Vice-Chairman | owns 8.71% of shares | ||
| Andrejs Grisans | Member | owns 10.03% of shares | ||
| Ivars Senbergs | Member | owns 2 shares | ||
| Aivis Olsteins | Member | owns no shares |
Information on professional and educational background of the management board members Normunds Bergs
Normunds Bergs, born in 1963, is Chairman of the Board and Chief Executive Officer of SAF Tehnika AS. Mr. Bergs is one of the founders of SIA Fortech (co-founding company of SAF Tehnika AS) where during the periods from 1990 to 1992 and 1999 to 2000 he acted as Managing Director and General Director, respectively. Following SIA Fortech's merger with AS Microlink in 2000, Mr. Bergs became Chief Executive Officer of SAF Tehnika AS and a member of the Management Board of AS Microlink. From 1992 to 1999, Mr. Bergs worked for World Trade Centre Riga, where he held the position of General Director and became a Member of the Board of Directors in 1998. Mr. Bergs graduated from the Riga Technical University with a degree in radio engineering in 1986.
Didzis Liepkalns
Didzis Liepkalns, born in 1962, is Member of the Board and Technical Director of SAF Tehnika. D. Liepkalns founded a private enterprise SAF in 1995 and co-founded the company SAF Tehnika AS in 1999. From 1985 to 1990 he worked as an engineer at the Institute of Electronic Engineering and Computer Sciences. D. Liepkalns has graduated Riga Technical University with a degree in radio engineering in 1985.
Aira Loite
Aira Loite, born in 1965, Member of the Board and Chief Operating Officer of SAF Tehnika. Prior to joining the company in November, 2007, she worked for SIA Lattelecom (2006/2007) initially as a Business Performance Director and later as a Director of Business Information and Control division. From 2000 till 2006 she held the position of the Head of Finances and Administration of SIA Microlink Latvia being the Board member as well. From 2004 till 2005 she was Chief Financial Officer of Microlink Group. A. Loite has graduated University of Latvia with a degree in applied mathematics in 1988. She has the degree of Master of Business Administration by the University of Salford (UK) in 2009.
Information on professional and educational background of the supervisory council members
Vents Lācars,
born in 1968, is Chairman of the Supervisory Council and Vice-President Business Development of SAF Tehnika. Before co-founding the Company, from 1992 to 1999, he worked in SIA Fortech, where throughout his career he held positions of programmer, leading programmer, and project manager in the networking department and networking department manager. From 1990 to 1992 V. Lacars worked as a programmer at state electric utility company Latvenergo. V. Lacars has studied in Faculty of Physics and Mathematics, University of Latvia.
Juris Ziema,
born in 1964, co-founder of the Company, is Vice-Chairman of the Supervisory Council and Production Department Director. From 1998 to 1999 he worked as an engineer at Didzis Liepkalns private enterprise SAF. From 1987 to 1999 J. Ziema worked as an engineer at the Institute of Electronic Engineering and Computer Sciences. J. Ziema has graduated Riga Technical University with a degree in radio engineering in 1987.
Andrejs Grišāns
born in 1957, is Member of the Supervisory Council and Production Department Manager. A. Grisans is one of the co-founders of SAF Tehnika. Prior to joining the Company, he owned and managed a private company specializing in electronic equipment engineering, production and distribution. From 1992 to 1999 A. Grisans was involved in entrepreneurial activities in the field of radio engineering. He worked as an engineer-constructor at the Institute of Polymer Mechanics from 1984 to 1992 and in the constructing bureau Orbita from 1980 to 1984. A. Grisans has graduated Riga Technical University with a degree in radio engineering in1980.
Ivars Šenbergs,
born in 1962, Member of the Supervisory Council, also Chairman of the Board of SIA Juridiskais Audits, SIA Namipasumu parvalde, SIA Synergy Consulting, SIA IŠMU, SIA Dzirnavu centrs and Member of the Supervisory Council of AS MFS bookkeeping. From 1999 until 2000 he worked as Finance and Administrative Director at SIA Fortech. I. Senbergs has graduated Faculty of Law, University of Latvia in 1986..
Aivis Olsteins,
born in 1968. A.Olsteins has 20 years of experience in telecommunications. He is CEO of a company "DataTechLabs" since year 2000. The company provides software development and support services for telecommunication operators. From 1992 till 1999 he worked in Baltcom TV, initially as a system engineer in Cable TV operations department, from 1994 till June 1996 as a CTO, but from July 1996 till the end of 1999 as technical advisor to General Manager. A. Olsteins is studying in University of Latvia in Faculty of Physics and Mathematics, bachelor of Physics program.
Statement of Board's Responsibilities
The Board of SAF Tehnika JSC (hereinafter – the Parent) is responsible for preparing the consolidated financial statements of the Parent and its subsidiaries (hereinafter - the Group). The consolidated financial statements are prepared in accordance with the source documents and present fairly the consolidated financial position of the Group as of 31 December 2013 and the consolidated results of its financial performance and cash flows for the quarter then ended.
The above mentioned financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union, and are prepared on a going concern basis. Appropriate accounting policies have been applied on a consistent basis. The consolidated interim financial statements have been prepared based on the same accounting principles applied in the Consolidated Financial Statements for the year ended on June 30, 2013.
Prudent and reasonable judgments and estimates have been made by the management in the preparation of the financial statements.
The Board of SAF Tehnika JSC is responsible for the maintenance of proper accounting records, the safeguarding of the Group's assets and the prevention and detection of fraud and other irregularities in the Group. The Board is responsible for compliance with the requirements of normative acts of the countries the Group operates in (Latvia and United States of America).
The interim financial statements have been prepared in Latvian Lats and Euro.
Currency Exchange rate for LVL/EUR is 0.702804
_________________________
Aira Loite COO, Member of the Management Board
Management Report
The Group's non-audited net sales for the second quarter of financial year 2013/14 were 1.99 million LVL (2.84 million EUR), decreasing by 25.8% compared to the second quarter of the previous financial year and being by 17% lower than sales in the previous quarter – Q1 of FY 2013/2014. The sales were substantially lower than planned as deliveries of several large orders were postponed to year 2014.
Comparing sales results with the second quarter of the financial year 2012/2013, sales were lower in all regions, where the Group delivers. Sales in Americas formed almost half (46%) of turnover amounting to 0.92 million LVL (1.13 million EUR) and was by 12% more than in the previous quarter of the current financial year. Both - sales of standard CFIP products and deliveries of custom made solutions formed results in Europe and CIS region, which accounted 36% out of all quarterly sales. The largest decrease in sales (by 44%) was in Asia Pacific, Africa, and Middle East region, substantially impacted by postponed deliveries of produced orders.
During reporting quarter, SAF Tehnika continued its Europe roadshow for current and potential customers, presenting latest products Integra and Spectrum Compact , and organizing similar seminars for CIS clients as well. In order to meet clients, maintain presence and present the Group's product offering, SAF Tehnika participated in regional exhibitions such as "WISPAPALOOZA", (Las Vegas, USA), "AfricaCom 2013"(Cape Town, South Africa), "CNX7"(Frankfurt, Germany). Following the latest trends in design and accessibility the Group redesigned its website (www.saftehnika.com), which now is more concise, easy to navigate. The Group continued to develop video tutorials presenting application of SAF Tehnika products.
Chart 1. Quarter 2 revenue breakdown comparative charts:
The Group's products were sold in 55 countries during the reporting quarter.
While the sales volume for CFIP product line slightly shrunk, it still represents largest part of the total sales of the reporting quarter, strengthening its position as the main product line in SAF
portfolio. FreeMile product line is on demand mostly in Europa and USA. Ever increasing demand was observed for Spectrum Compact and Marathon. The Group still receives orders for the oldest CFM line products, thus affirming that the product line is still popular among the customers.
One of the main events in the reporting period was beginning of commercial production of Integra product line. A mission of production in following months will be securing scheduled delivery times for ever increasing number of Integra orders.
The Group's consolidated non-audited net sales for the 6 months of the financial year 2013/14 were 4.4 million LVL (6.25 million EUR) representing a year-on-year decrease of 5%. The main reasons for the decrease were: weakness in AsiaPasific, Africa, MiddleEast where sales of the first 6 months of this financial year were 1.04 million LVL (1.48million EUR) or 13% lower than in the first half of FY 2012/13, and slowing sales in Americas – a decrease of 11%, while Europe, CIS showed 10% growth over the year due to more intensive sales endeavors.
The Group's expenses were in budget limits. The Group is constantly looking for options to decrease production and other costs with the aim increase competitiveness in the market. Declining USD/ LVL exchange rate impacted negatively the Group's bottom line.
The consolidated net loss of the Group for the second quarter of 2013/14 financial year was - 251 thousand LVL (-357 thousand EUR), which is by 81 thousand LVL (115 thousand EUR) larger loss compared with the same quarter in the previous financial year.
The consolidated net loss of the Group for the 6 months of 2013/14 financial year was -160 thousand LVL (-227 thousand EUR).
The Group's net cash flow for the 6 month period of the financial year was negative – 288 thousand LVL (-410 thousand EUR). As of December 31, 2013, the Group carried a net cash balance (excluding interest bearing liabilities) of 1.67 million LVL (2.39 million EUR).
Market overview
In opinion of SAF Tehnika the market conditions have not changed from previous reporting period to any significant degree. The drive for higher capacity of radio connections is slowly leading to wider adoption of equipment based on upcoming generation of modem technology. Radio frequency band wise - market is still dominated by product operating in spectrum bands between 6 to 40GHz, adoption of E- and V- band radios is happening slower than predicted few years ago.
Guidance
The Group is financially stable. The Group's main tasks stays unchanged – development of the Integra product line and working on specific niche products and solutions with the goal to satisfy ever increasing demand for efficient, qualitative, price attractive, high capacity data transmission products in the wide frequency range. The Group has set tasks to strengthen sales team, enlarge customer base in a strategic markets and regain higher sales and profitability. Meanwhile the further company's sales results largely depend on external factors such as availability of production components and financing allocation in customer's organization, therefore the Board of the Group would like to avoid being specific in predictions of sales and financial result projections.
On December 31, 2013 the Group employed 167 people (166 people on December 31, 2013).
| Q2 2013/14 | Q2 2012/13 | Q2 2011/12 | ||||
|---|---|---|---|---|---|---|
| LVL | EUR | LVL | EUR | LVL | EUR | |
| Net Sales | 1 995 703 | 2 839 630 | 2 688 665 | 3 825 626 | 2 437 451 | 3 468 180 |
| Earnings before interest, taxes and depreciation | ||||||
| (EBITDA) | -158 771 | -225 911 | -60 861 | -86 597 | 77 956 | 110 921 |
| share of the turnover % | -8% | -8% | -2,3% | -2,3% | 3,2% | 3,2% |
| Profit/loss before interest and taxes (EBIT) | -233 657 | -332 464 | -131 603 | -187 254 | 16 963 | 24 136 |
| share of the turnover % | -12% | -12% | -5% | -5% | 1% | 1% |
| Net Profit | -251 516 | -357 877 | -170 497 | -242 595 | 67 527 | 96 082 |
| share of the turnover % | -13% | -13% | -6% | -6% | 3% | |
| Total assets | 7 825 941 | 11 135 311 | 8 182 264 | 11 642 313 | 9 062 830 | 12 895 245 |
| Total Owners equity | 7 006 327 | 9 969 105 | 6 918 919 | 9 844 735 | 7 434 862 | 10 578 856 |
| Return on equity (ROE) % | -3,21% | -3,21% | -2,08% | -2,08% | 0,75% | 0,75% |
| Return on assets (ROA) % | -3,59% | -3,59% | -2,46% | -2,46% | 0,91% | 0,91% |
| Liquidity ratio | ||||||
| Quick ratio % | 206% | 206% | 114% | 114% | 117% | 117% |
| Current ratio % | 456% | 456% | 335% | 335% | 290% | 290% |
| Earnings per share | -0,08 | -0,12 | -0,06 | -0,08 | 0,02 | 0,03 |
| Last share price at the end of period | 1,60 | 2,28 | 1,36 | 1,94 | 1,66 | 2,36 |
| P/E | -18,89 | -23,69 | 73,02 | |||
| Number of employees at the end of reporting period | 167 | 166 | 162 |
KEY indicators
Consolidated Statement of Financial Position
As of December 31, 2013
| Note 31.12.2013 31.12.2012 31.12.2013 31.12.2012 | |||||
|---|---|---|---|---|---|
| CURRENT ASSETS | LVL | LVL | EUR | EUR | |
| Cash and bank | 1 685 947 | 1 434 625 | 2 398 886 | 2 041 287 | |
| Short-term investments | 1 | 409 409 | 767 603 | 582 537 | 1 092 201 |
| Customer receivables | 2 | ||||
| Accounts receivable | 1 795 365 | 1 953 881 | 2 554 574 | 2 780 122 | |
| Due from joint venture | 32 209 | 0 | 45 829 | 0 | |
| Allowance for uncollectible receivables | -374 416 | -377 332 | -532 746 | -536 895 | |
| Total | 1 453 158 | 1 576 549 | 2 021 828 | 2 243 228 | |
| Other receivables | |||||
| Other current receivables | 3 | 2 283 | 189 546 | 3 248 | 269 700 |
| Short-term loans | 4 | 182 729 | 266 293 | 260 000 | 378 901 |
| Total | 185 012 | 455 839 | 263 248 | 648 600 | |
| Prepaid expenses | |||||
| Prepaid taxes | 70 879 | 116 466 | 100 852 | 165 716 | |
| Other prepaid expenses | 79 998 | 76 598 | 113 827 | 108 989 | |
| Total | 150 877 | 193 064 | 214 679 | 274 705 | |
| Inventories | 5 | ||||
| Raw materials | 817 584 | 433 834 | 1 163 317 | 617 290 | |
| Work-in-progress | 1 199 688 | 1 459 730 | 1 707 002 | 2 077 009 | |
| Finished goods | 1 163 612 | 1 025 627 | 1 655 671 | 1 459 336 | |
| Prepayments to suppliers | 70 007 | 27 254 | 99 611 | 38 779 | |
| Total | 3 250 891 | 2 946 445 | 4 625 601 | 4 192 413 | |
| TOTAL CURRENT ASSETS | 7 135 294 | 7 374 125 10 152 609 10 492 435 | |||
| NON-CURRENT ASSETS | |||||
| Long-term financial assets | |||||
| Equity-accounted investments | 17 089 | 0 | 24 315 | 0 | |
| Investments in other companies | 835 | 835 | 1 188 | 1 188 | |
| Long-term receivables | 2 | 0 | 79 181 | 0 | 112 664 |
| Deffered income tax | 86 581 | 92 559 | 123 194 | 131 701 | |
| Total | 104 505 | 172 575 | 148 697 | 245 552 | |
| NON-CURRENT physical assets | 6 | ||||
| Plant and equipment | 2 298 259 | 2 278 026 | 3 270 128 | 3 241 339 | |
| Other equipment and fixtures | 1 313 300 | 1 239 057 | 1 868 658 | 1 763 019 | |
| Accumulated depreciation | -3 187 940 | -2 977 914 | -4 536 030 | -4 237 190 | |
| Other long-term assets | 129 | 10 200 | 184 | 14 513 | |
| Total | 423 748 | 549 369 | 602 939 | 781 682 | |
| Intagible assets | 6 | ||||
| Purchased licenses, trademarks etc | 142 226 | 86 195 | 202 369 | 122 644 | |
| Other long-term intagible assets | 20 168 | 0 | 28 696 | 0 | |
| Total | 162 394 | 86 195 | 231 066 | 122 644 | |
| TOTAL NON-CURRENT ASSETS | 690 647 | 808 139 | 982 702 | 1 149 878 | |
| TOTAL ASSETS | 7 825 941 | 8 182 264 11 135 311 11 642 313 |
| LIABILITIES AND OWNERS' EQUITY | Note | 31.12.2013 31.12.2012 31.12.2013 31.12.2012 | |||
|---|---|---|---|---|---|
| CURRENT LIABILITIES | LVL | LVL | EUR | EUR | |
| Debt obligations | |||||
| Short-term loans from financial institutons | 8 859 | 9 903 | 12 605 | 14 091 | |
| Customer prepayments for goods and services | 52 278 | 151 518 | 74 385 | 215 591 | |
| Accounts payable | 7 | 544 602 | 765 486 | 774 899 | 1 089 188 |
| Tax liabilities | 8 | 45 121 | 76 089 | 64 201 | 108 265 |
| Salary-related accrued expenses | 9 | 140 903 | 227 876 | 200 487 | 324 238 |
| Provisions for guarantees | 26 870 | 26 165 | 38 233 | 37 229 | |
| Prepaid revenue | 981 | 6 308 | 1 396 | 8 975 | |
| TOTAL CURRENT LIABILITIES | 819 614 | 1 263 345 | 1 166 206 | 1 797 578 | |
| OWNERS' EQUITY | |||||
| Share capital | 2 970 180 | 2 970 180 | 4 226 185 | 4 226 185 | |
| Paid in capital over par | 2 004 204 | 2 004 204 | 2 851 725 | 2 851 725 | |
| Retained earnings | 2 196 684 | 2 226 197 | 3 125 600 | 3 167 593 | |
| Net profit for the financial year | -160 183 | -290 072 | -227 920 | -412 735 | |
| Currency translation reserve | -4 558 | 8 410 | -6 485 | 11 966 | |
| TOTAL OWNERS' EQUITY | 7 006 327 | 6 918 919 | 9 969 105 | 9 844 735 | |
| TOTAL LIABILITIES AND OWNERS' EQUITY | 7 825 941 | 8 182 264 11 135 311 11 642 313 |
Consolidated Statement of Profit or Loss for 6 month of the financial year 2013/2014
| Note | 31.12.2013 | 31.12.2012 | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|---|---|
| LVL | LVL | EUR | EUR | ||
| Net sales | 10 | 4 395 006 | 4 605 271 | 6 253 530 | 6 552 710 |
| Other operating income | 7 913 | 33 657 | 11 259 | 47 890 | |
| Total income | 4 402 919 | 4 638 928 | 6 264 789 | 6 600 600 | |
| Direct cost of goods sold or services rendered | -2 480 053 | -2 751 593 | -3 528 798 | -3 915 164 | |
| Marketing, advertising and public relations expenses |
-188 237 | -321 428 | -267 837 | -457 351 | |
| Bad receivables | 11 | -18 383 | -82 151 | -26 157 | -116 890 |
| Operating expenses | -426 878 | -429 554 | -607 393 | -611 200 | |
| Salaries and social expenses | 12 | -1 107 690 | -1 066 164 | -1 576 101 | -1 517 015 |
| Bonuses and social expenses | 12 | -66 166 | -48 021 | -94 146 | -68 328 |
| Depreciation expense | -146 405 | -143 965 | -208 316 | -204 844 | |
| Other expenses | -38 361 | -15 082 | -54 583 | -21 460 | |
| Operating expenses | -4 472 173 | -4 857 958 | -6 363 329 | -6 912 251 | |
| EBIT | -69 254 | -219 030 | -98 540 | -311 651 | |
| Financial income (except ForEx rate difference) | 5 586 | 17 087 | 7 948 | 24 313 | |
| Foreign exchange +gain/(loss) | -90 207 | -90 135 | -128 353 | -128 251 | |
| Financial items | -84 621 | -73 048 | -120 405 | -103 939 | |
| Share of profit/(loss) of equity-accounted investees | -6 308 | 4 735 | -8 975 | 6 737 | |
| EBT | -160 183 | -287 343 | -227 920 | -408 853 | |
| Corporate income tax | 0 | -2 729 | 0 | -3 883 | |
| Profit after taxes | -160 183 | -290 072 | -227 920 | -412 735 | |
| Net profit | -160 183 | -290 072 | -227 920 | -412 735 |
*Earnings per share EPS 31.12.2013. = -0.05 LVL (-0.08 EUR) EPS 31.12.2012. = -0.10 LVL (-0.14 EUR)
| LVL | LVL | EUR | EUR |
|---|---|---|---|
| 1 995 703 | 2 688 665 | 2 839 630 | 3 825 626 |
| 5 674 | 26 435 | 8 073 | 37 614 |
| 2 001 377 | 2 715 100 | 2 847 703 | 3 863 239 |
| -1 135 578 | -1 674 794 | -1 615 782 | -2 383 017 |
| -120 442 | -196 261 | -171 374 | -279 254 |
| 197 | -84 782 | 280 | -120 634 |
| -245 539 | -240 017 | -349 371 | -341 513 |
| -584 624 | -544 285 | -831 845 | -774 448 |
| -52 140 | -24 618 | -74 189 | -35 028 |
| -74 886 | -70 742 | -106 553 | -100 657 |
| -22 022 | -11 204 | -31 334 | -15 942 |
| -2 235 034 | -2 846 703 | -3 180 167 | -4 050 493 |
| -187 254 | |||
| 16 219 | |||
| -75 745 | |||
| -20 300 | -41 835 | -28 884 | -59 526 |
| 0 | |||
| -246 780 | |||
| 4 116 | -1 737 | 5 857 | -2 472 |
| -242 595 | |||
| -233 657 2 255 -22 555 -1 675 -255 632 -251 516 |
-131 603 11 399 -53 234 4 678 -168 760 -170 497 |
31.12.2013 31.12.2012 31.12.2013 31.12.2012 -332 464 3 209 -32 093 -2 383 -363 732 -357 875 |
Consolidated Statement of Profit or Loss for Q2 of the financial year 2013/2014
*Earnings per share EPS 31.12.2013. = -0.08 LVL (-0.12 EUR) EPS 31.12.2012. = -0.06 LVL (-0.08 EUR)
Consolidated cash flow statement for 6 months of the financial year 2013/14
| 31.12.2013 31.12.2012 31.12.2013 31.12.2012 | ||||
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| CASH GENERATED FROM OPERATIONS (of which) | -346 120 | -357 577 | -492 484 | -508 786 |
| Cash received from customers | 4 732 165 | 4 085 240 | 6 733 264 | 5 812 774 |
| Cash paid to suppliers and employees | -5 208 066 | -4 440 674 | -7 410 410 | -6 318 510 |
| Paid/Received VAT, corporate income tax | 129 781 | -2 143 | 184 662 | -3 049 |
| NET CASH USED IN INVESTING ACTIVITIES (of which) | -46 288 | 962 350 | -65 862 | 1 369 301 |
| Investment in equity-accounted investees | -19 389 | 0 | -27 588 | 0 |
| Cash paid/received for short-term investments | 174 271 | 1 090 790 | 247 965 | 1 552 054 |
| Cash paid for purchasing non-current physical assets | -202 783 | -146 457 | -288 534 | -208 390 |
| Interest received | 1 613 | 18 017 | 2 295 | 25 636 |
| NET CASH USED IN FINANCING ACTIVITIES (of which) | 106 876 | -497 793 | 152 071 | -708 296 |
| Repayment of short-term loans | 73 654 | 4 418 | 104 800 | 6 286 |
| Repayment of long-term loans | 0 | 11 388 | 0 | 16 204 |
| Cash paid of short-term loans | 0 | -253 010 | 0 | -360 001 |
| Cash received from EU fonds | 33 222 | 36 429 | 47 271 | 51 834 |
| Dividends paid | 0 | -297 018 | 0 | -422 619 |
| Effects of exchange rate changes | -2 907 | -1 125 | -4 136 | -1 601 |
| TOTAL CASH FLOW: | -288 438 | 105 855 | -410 410 | 150 618 |
| Cash and cash equivalents as at the beginning of period | 1 974 385 | 1 328 770 | 2 809 297 | 1 890 669 |
| Cash and cash equivalents as at the end of period | 1 685 947 | 1 434 625 | 2 398 886 | 2 041 287 |
| NET INCREASE / DECREASE IN CASH AND CASH EQUIVALENTS | -288 438 | 105 855 | -410 410 | 150 618 |
Statement of changes in consolidated equity for the 6 months period ended December 31 2013
| Share capital |
Share premium |
Currency translation reserve |
Retained earnings |
Total | |
|---|---|---|---|---|---|
| LVL | LVL | LVL | LVL | LVL | |
| As at 30 June 2012 | 2 970 180 | 2 004 204 | - | 2 523 215 | 7 497 650 |
| Dividend relating to 2010/2011 | - | - | - | -297 018 | -297 018 |
| Currency translation difference | 0 | 0 | -86 | - | -86 |
| Loss for the year | - | - | - | -29 513 | -29 513 |
| As at 30 June 2013 | 2 970 180 | 2 004 204 | -35 | 2 196 684 | 7 171 033 |
| Currency translation difference | - | - | -4 523 | 0 | -4 523 |
| Profit for the period | - | - | - | -160 183 | -160 183 |
| As at 31 December 2013 | 2 970 180 | 2 004 204 | -4558 | 2 036 501 | 7 006 327 |
Statement of changes in consolidated equity for the 6 months period ended December 31 2013
| Share capital |
Share premium |
Retained earnings |
Total | |||
|---|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | ||
| As at 30 June 2012 | 4 226 185 | 2 851 725 | - | 3 590 211 10 668 195 | ||
| Dividend relating to 2010/2011 | - | - | - | -422 619 | -422 619 | |
| Currency translation difference | - | - | -122 | - | -122 | |
| Loss for the year | - | - | - | -41 994 | -41 994 | |
| As at 30 June 2013 | 4 226 185 | 2 851 725 | -50 | 3 125 599 10 203 460 | ||
| Currency translation difference | - | - | -6 436 | 0 | -6 436 | |
| Profit for the period | - | - | - | -227 920 | -227 920 | |
| As at 31 December 2013 | 4 226 185 | 2 851 725 | -6486 | 2 897 679 | 9 969 104 |
Notes for interim report
Note 1 Short-term investments
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Short-term investments | 409 409 | 767 603 | 582 537 | 1 092 201 |
| Short-term investments consist | of deposits with a maturity period of more than 90 days. | |||
| Note 2 Customer receivables |
31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
| Long-term receivables | - | 79 181 | - | 112 664 |
| Accounts receivable Due from joint venture |
1 795 365 32 209 |
1 953 881 - |
2 554 574 45 829 |
2 780 122 - |
| Provisions for bad and doubtful accounts receivable Total accounts receivable |
(374 416) 1 453 158 |
(377 332) 1 576 549 |
(532 746) 2 021 828 |
(536 895) 2 243 228 |
| Total receivables | 1 453 158 | 1 655 730 | 2 021 828 | 2 355 892 |
Total receivables decreased by 12% comparing with the previous year reflecting decreased sales volumes. Provisions for doubtful accounts receivable are on the same level as year before.
Calculations of provisions for bad and doubtful accounts were done according to Group's provision calculation policy.
Note 3 Other current receivables
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Other current receivables | 2 283 | 189 546 | 3 248 | 269 700 |
| The deposit for execution of projects realized centrs"(LEO) has been returned in Q2 of FY 2013/14. |
in competence center | "LEO pētījumu |
Note 4 Loans
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Short-term loans | 182 729 | 266 293 | 260 000 | 378 901 |
| The Parent has lent 182 729 LVL (EUR 260 |
000) to related party SIA Namīpašumu pārvalde |
based on a loan agreement. The initial loan repayment date was prolonged till March 31, 2014.
Note 5 Inventories
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Raw materials | 1 231 999 | 1 033 770 | 1 752 977 | 1 470 922 |
| Allowance for slow-moving items | (414 415) | (599 936) | (589 659) | (853 632) |
| Work-in- progress | 1 199 688 | 1 459 730 | 1 707 002 | 2 077 009 |
| Finished goods | 1 163 612 | 1 025 627 | 1 655 671 | 1 459 336 |
| Prepayments to suppliers | 70 007 | 27 254 | 99 611 | 38779 |
| 3 250 891 | 2 946 445 | 4 625 601 | 4 192 413 |
Inventories in comparison with December 31, 2012 increased by 10%. The main increase is in component stock as previously bought components has been consumed, and finished goods stock. as some deliveries were postponed on customers' request.
The Group is keeping inventory reserves in order to be able to produce orders in competitive terms for products currently being in the Group's product list. Group also keeps components for previously produced and sold product types for repair and maintenance purpose.
Note 6 Non-current assets
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Plant and equipment | 2 298 259 | 2 278 026 | 3 270 128 | 3 241 339 |
| Other equipment and fixtures | 1 313 300 | 1 239 07 | 1 868 658 | 1 763 019 |
| Accumulated depreciation | (3 187 940) | (2 977 914) | (4 536 030) | (4 237 190) |
| Other long term assets | 129 | 10 200 | 184 | 14 513 |
| 423 748 | 549 369 | 602 939 | 781 682 | |
| Purchased licenses, trademarks etc. | 142 226 | 86 195 | 202 369 | 122 644 |
| Other long term intangible assets | 20 168 | - | 28 696 | - |
| 162 394 | 86 195 | 231 066 | 122 644 |
The Group invested 101 thousand LVL (144 thousand EUR) in 6 months of FY 2013/2014 – mainly in IT HW and certification.
Note 7 Accounts payable
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Accounts payable | 544 602 | 765 486 | 774 899 | 1 089 188 |
| Note 8 Tax liabilities |
||||
| 31.12.2013 | 31.12.2012 | 31.12.2013 | 31.12.2012 | |
| LVL | LVL | EUR | EUR | |
| Tax liabilities | 45 121 | 76 089 | 64 201 | 108 265 |
| Note 9 Salary-related accrued expenses |
||||
| 31.12.2013 | 31.12.2012 | 31.12.2013 | 31.12.2012 | |
| LVL | LVL | EUR | EUR | |
| Salary-related accrued expenses | 140 903 | 227 876 | 200 487 | 324 238 |
The Group has paid salaries for December at the end of December, 2013. Usually salaries are paid in the first week of following month.
Note 10 Segment information
a) The Group's operations are divided into two major structural units – SAF branded equipment designed and produced in-house – CFM (Hybrid/ PDH Radios), CFIP (Etherent/Hybrid/ superPDH systems) and FreeMile (Hybrid Radios for unlicensed frequency bands) as the first structural unit and 3 rd party products for resale, like Antennas, cables, some OEMed products and accessories as the second unit.
CFIP – the major product line is represented by 4 respectable models:
-
a split mount PhoeniX hybrid radio system with Gigabit Ethernet + 20 E1 interfaces;
-
Lumina high capacity Full Outdoor all-in-one radio with Gigabit Ethernet traffic interface;
-
CFIP-108 entry level radio - perfect for upgrade of E1 networks into packet data networks;
-
Marathon FIDU low frequency low capacity system for servicing rural and industrial applications.
All CFIP radios are offered in most widely used frequency bands from 1.4 to 38 GHz, thus enabling the use of CFIP radios all across the globe.
PhoeniX radio represents the type of microwave radio which is taking the commanding role on the market at present. Full Outdoor units of Lumina and 108 modifications are of growing and developing radio type 'all-in-one' which has biggest potential as part of future data/packet networks.
SAF Tehnika was one of the first companies offering Full Outdoor radios from 2003, thus is well positioned to use the past experience for development of next generation product.
CFM microwave radio product line has been the main type of radio SAF has been supplying to the market over many years and is still demanded. Such medium capacity, mature, yet extremely reliable and feature rich radio is still required to deploy telecom networks in developing markets.
FreeMile product line is represented by 3 models covering unlicensed frequency bands in 5.8, 17 and 24 GHz, which are made available for use in a growing number of countries around the globe.
This note provides information about division of the Group's turnover and balance items by structural units by product type for 6 month of the financial year 2013/14 and financial year 2012/13.
| CFM; CFIP; FreeMile | Other | Total | ||||
|---|---|---|---|---|---|---|
| 2013/14 | 2012/13 | 2013/14 | 2012/13 | 2013/14 | 2012/13 | |
| LVL | LVL | LVL | LVL | LVL | LVL | |
| Segment assets | 3 824 194 | 4 073 504 | 1 486 751 | 1 512 255 | 5 310 945 | 5 585 759 |
| Undivided assets | 2 514 996 | 2 596 504 | ||||
| Total assets | 7 825 941 | 8 182 263 | ||||
| Segment liabilities | 512 669 | 876 592 | 197 952 | 230 783 | 710 621 | 1 107 375 |
| Undivided liabilities | 108 993 | 155 969 | ||||
| Total liabilities | 819 614 | 1 263 344 | ||||
| Net sales | 3 424 626 | 3 594 496 | 970 380 | 1 010 775 | 4 395 006 | 4 605 271 |
| Segment results | 1 014 663 | 832 633 | 193 172 | 358 943 | 1 207 835 | 1 191 576 |
| Undivided expenses | -1 277 089 | -1 474 772 | ||||
| Profit from operations | -69 254 | -283 196 | ||||
| Other income | 5 586 | 53 628 | ||||
| Financial income/expenses, net | -90 207 | -62 509 | ||||
| Share of profit/(loss) of equity-accounted investees |
-6 308 | 4 735 | ||||
| Profit before taxes | -160 183 | -287 342 | ||||
| Corporate income tax | 0 | -2 730 | ||||
| Profit after taxes | -160 183 | -290 072 | ||||
| Net profit | -160 183 | -290 072 | ||||
| Other information | ||||||
| Additions of property plant and equipment | ||||||
| and intangible asets | 33 002 | 46 876 | 0 | 0 | 33 002 | 46 876 |
| Undivided additions | 125 253 | 143 955 | ||||
| Total additions of property plant and equipment and intangible asets |
158 255 | 190 831 | ||||
| Depreciation and amortization | 57 003 | 73 259 | 393 | 915 | 57 396 | 74 174 |
| Undivided depreciation | 89 009 | 69 792 | ||||
| Total depreciation and amortization | 146 405 | 143 966 |
| CFM; CFIP; FreeMile | Other | Total | ||||
|---|---|---|---|---|---|---|
| 2013/14 | 2012/13 | 2013/14 | 2012/13 | 2013/14 | 2012/13 | |
| EUR | EUR | EUR | EUR | EUR | EUR | |
| Segment assets | 5 441 338 | 5 796 074 | 2 115 455 | 2 151 744 | 7 556 792 | 7 947 819 |
| Undivided assets | 3 578 519 | 3 694 494 | ||||
| Total assets | 11 135 311 | 11 642 311 | ||||
| Segment liabilities | 729 462 | 1 247 278 | 281 660 | 328 375 | 1 011 123 | 1 575 653 |
| Undivided liabilities | 155 083 | 221 925 | ||||
| Total liabilities | 1 166 206 | 1 797 578 | ||||
| Net sales | 4 872 804 | 5 114 507 | 1 380 726 | 1 438 203 | 6 253 530 | 6 552 710 |
| Segment results | 1 443 735 | 1 184 730 | 274 859 | 510 731 | 1 718 594 | 1 695 460 |
| Undivided expenses | -1 817 133 | -2 098 412 | ||||
| Profit from operations | -98 540 | -402 952 | ||||
| Other income | 7 948 | 76 306 | ||||
| Financial expenses, net | -128 353 | -88 942 | ||||
| Share of profit/(loss) of equity-accounted | ||||||
| investees | -8 975 | 6 737 | ||||
| Profit before taxes | -227 920 | -408 851 | ||||
| Corporate income tax | 0 | -3 884 | ||||
| Profit after taxes | -227 920 | -412 735 | ||||
| Net profit | -227 920 | -412 735 | ||||
| Other information | ||||||
| Additions of property plant and equipment | ||||||
| and intangible asets | 46 958 | 66 699 | 0 | 0 | 46 958 | 66 699 |
| Undivided additions | 178 218 | 204 830 | ||||
| Total additions of property plant and | ||||||
| equipment and intangible asets | 225 176 | 271 529 | ||||
| Depreciation and amortization | 81 108 | 104 238 | 559 | 1 302 | 81 667 | 105 540 |
| Undivided depreciation | 126 649 | 99 304 | ||||
| Total depreciation and amortization | 208 316 | 204 844 |
b) This note provides information about division of the Group's turnover and assets by geographical regions (customer location) for 6 month of the financial year 2013/14 and financial year 2012/13.
| Net sales | Assets | Net sales | Assets | |||||
|---|---|---|---|---|---|---|---|---|
| 2013/14 | 2012/13 | 31.12.2013 | 31.12.2012 | 2013/14 | 2012/13 | 31.12.2013 | 31.12.2012 | |
| LVL | LVL | LVL | LVL | EUR | EUR | EUR | EUR | |
| Americas | 1 745 532 | 1 951 808 | 684 927 | 673 656 | 2 483 668 | 2 777 173 | 974 563 | 958 527 |
| Europe, CIS | 1 610 940 | 1 466 054 | 427 185 | 442 418 | 2 292 161 | 2 086 007 | 607 829 | 629 505 |
| Asia, Africa, Middle East | 1 038 535 | 1 187 409 | 338 800 | 465 534 | 1 477 701 | 1 689 531 | 482 070 | 662 396 |
| 4 395 006 | 4 605 271 | 1 450 912 | 1 581 609 | 6 253 530 | 6 552 711 | 2 064 462 | 2 250 428 | |
| Unallocatted assets | - | - | 6 375 029 | 6 600 655 | - | - | 9 070 849 | 9 391 885 |
| 4 395 006 | 4 605 271 | 7 825 941 | 8 182 264 | 6 253 530 | 6 552 711 | 11 135 311 | 11 642 313 |
Note 11 Bad receivables
.
| 31.12.2013 | 31.12.2012 | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Bad receivables | (18 383) | (82 151) | (26 157) | (116 890) |
Provisions for doubtful and bad accounts receivable were calculated according to Group's provision calculation policy. The Group starts to calculate provisions for customers who delays payment terms more than 3 months. Additional provisions were calculated for debts were probability not to receive payment is high, although agreed payment term has not come yet.
Note 12 Salaries, bonuses and social expenses
| 31.12.2013 LVL |
31.12.2012 LVL |
31.12.2013 EUR |
31.12.2012 EUR |
|
|---|---|---|---|---|
| Salaries and social expenses | (1 107 690) | (1 066 164) | (1 576 101) | (1 517 015) |
| Bonuses and social expenses | (66 166) | (48 021) | (94 146) | (68 328) |
| (1 173 856) | (1 114 185) | (1 670 247) | (1 585 343) |
Salaries and social expenses, in comparison with the 6 months period of the previous financial year were increased by 4% reflecting increase in fixed salaries for key specialists. Bonuses were paid as specific financial and development targets were reached.