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SAF Tehnika
Quarterly Report • Nov 3, 2010
2241_rns_2010-11-03_bab00505-f8a1-4e60-93f2-11f22bc39d36.pdf
Quarterly Report
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SAF Tehnika Interim Report for 3 months of financial year 2010/11 (July 1, 2010 – September 30, 2010)
TABLE OF CONTENTS
| KEY DATA…………………………………………………………………… | 3 |
|---|---|
| Share and Shareholdings……………………………………………………… | 4 |
| Information on management board and supervisory council members…… | 5 |
| Statement of Board's Responsibility…………………………………… | 6 |
| Management Report………………………………………………………… | 7 |
| Balance Sheet………………………………………………… | 10 |
| Income Statement for 3 months of the financial year 2010/11…………… | 11 |
| Cash Flow Statement………………………………………… | 11 |
| Statement of Changes in Equity……………………………………………… | 12 |
| Notes for Interim Report……………………………………………………… | 13 |
| Note 1 Short-term investments………………………………………… | 13 |
| Note 2 Customer receivables…………………………………………… | 13 |
| Note 3 Other current receivables……………………………………… | 13 |
| Note 4 Inventories…………….…………………………….…………. | 13 |
| Note 5 Shares in companies………………………………………… | 14 |
| Note 6 Non-current physical assets ……………………………………. | 14 |
| Note 7 Accounts payable……………………………………………… | 14 |
| Note 8 Salary related accrued expenses ………………………………… | 15 |
| Note 9 Segment information ……………………………………… | 15 |
| Note 10 Bad receivables ….….…………………………………………. | 17 |
| Note 11 Salaries, bonuses and social expenses ……………………… | 17 |
KEY DATA
SAF Tehnika 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. The Company offers three product lines: CFM family - low to medium capacity radio links (PDH; up to 34 Mbps), CFQ family - high capacity radio links (SDH; up to 155 Mbps), and the new CFIP product line (super PDH; 366Mbps Lumina FODU (Optical Gigabit Ethernet), 108Mbps FODU (Fast Ethernet) and 366Mbps PhoeniX Hybrid Split Mount System). 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 has succeeded in becoming an international player and has been able to compete with such multinational corporations as Nokia Siemens Networks, Ericsson, Alcatel and NEC.
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: | 01.07.2010 |
| End of financial year: | 30.06.2011 |
| Phone: | +371 67046840 |
| Fax: | + 371 67046809 |
| E-mail: | [email protected] |
Share and Shareholdings
SAF Tehnika shareholders (over 5%) as of 12.10.2010
| Name | Ownership interest (%) |
|---|---|
| Didzis Liepkalns | 17.05% |
| Maleks S, SIA | 10.77% |
| Andrejs Grišans | 10.03% |
| Skandinavia Enskilda Banken | 9.98% |
| Normunds Bergs | 9.74% |
| Juris Ziema | 8.71% |
| Vents Lācars | 6.08% |
| Swedbank AS Clients account | 5.01% |
SAF Tehnika share price and OMX Riga index development for the reporting period
SAF Tehnika (SAF1R)
Period: July 1, 2010 – September 30, 2010
Currency: LVL
Marketplace: NASDAQ OMX Riga
Information on management and supervisory board members
| Name | Position | Ownership interest (%) | ||
|---|---|---|---|---|
| Normunds Bergs | Chairman | owns 9.74% of shares | ||
| Didzis Liepkalns | Vice Chairman | owns 17.05% of shares | ||
| Jānis Ennitis | Member | owns 0.66% of shares | ||
| Aira Loite | Member | owns 0.2% of shares |
SAF Tehnika Management Board:
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 0.09 % of shares | |||
| Jānis Bergs | Member till July | ||||
| 11, 2010 | |||||
| Juris Imaks | Member since |
||||
| July 12, 2010 |
Statement of Board's Responsibilities
The Board of SAF Tehnika Jsc (hereinafter – the Company) is responsible for preparing the interim financial statements of the Company and its subsidiary. Interim financial statements of the Company have not been audited or otherwise checked by auditors.
The interim financial statements are prepared in accordance with the source documents and present fairly the financial position of the Company as at September 30, 2010 and the results of its operations and cash flows for the 3 month period ended September 30, 2010.
The interim financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU on a going concern basis. Appropriate accounting policies have been applied on a consistent basis. The interim financial statements have been prepared based on the same accounting principles applied in the Financial Statements for the year ended on June 30, 2010. Prudent and reasonable judgments and estimates have been made by the management in the preparation of the interim financial statements.
The Board of SAF Tehnika is responsible for the maintenance of proper accounting records, the safeguarding of the Company's assets and the prevention and detection of fraud and other irregularities in the Company. The Board is also responsible for the compliance with the laws of the countries in which the Company operates.
The interim financial statements have been prepared in Latvian Lats and Euro.
Currency Exchange rate for LVL/EUR is 0.702804
_________________________
Aira Loite CFO, Member of the Management Board
Management Report
The Company's non-audited net sales for the first quarter of financial year 2010/11 were 3 158 526 (4 494 178 EUR) representing a 91% increase compared with the first quarter of the previous financial year, but 16% less than the previous reporting quarter.
Although sales in the Americas formed the smallest part (20%) of total sales the revenues were double the amount in the same quarter of the previous corresponding period. Sales in Europe and CIS represented 28% of quarterly sales and were 84% larger than in the 1st quarter of the previous financial year, reflecting re-commenced sales in the CIS and increased demand from European customers. Sales in the Asia Pacific, Middle East and Africa represented the largest part of the 1st quarter's turnover (52%). Sales there rose by 90% or 0.79 million LVL (1.117 million EUR) compared with the same quarter of the last financial year. The Company continues to expand its installation and commissioning services in order to meet ever increasing demand for turn-key solutions.
With the intention to promote SAF sales activities and international recognition of the SAF Tehnika brand and products worldwide and to strengthen co-operation with both existing partners and attract new potential customers, the Company continues its world wide marketing activities by participating in international exhibitions. Participation in 9 large exhibitions is being co-financed by the European Regional Development Fund. The most significant exhibitions in the reporting quarter were Comptel PLUS (Dallas, US) and NigeriaCom (Lagos, Nigeria), where a significant number of existing and potential regional clients were met and introduced to the Company's products and services.
Chart 1. Quarter 1 revenue breakdown comparative charts:
The Company's products were sold in 59 countries during the reporting quarter. Revenue breakdown by sales regions in the first quarter in the current financial year kept the same proportions as in the same quarter of the previous financial year.
The CFIP and CFM products formed the largest part of total sales. The share of CFIP products continue to dominate and, as expected, are successfully replacing CFM products. That said there is still demand in some countries for this cost advantageous, reliable product. Demand for CFQ products has decreased steadily in the reporting quarter.
Chart 3. Quarter 1 product sales breakdown.
With the aim to attract EU funds for research and development within the sphere of electronics and electrical engineering, the Company, together with other members of the Latvian Electrical Engineering and electronic Industry Association (LETERA), co-founded a limited liability company "LEO kompetences centrs" (LEO) investing 500 LVL (711 EUR) in its equity capital and becoming the owner of 10% of its share capital.
The net profit of SAF Tehnika for the first quarter of financial year 2010/11 was 276 600 LVL (393 566 EUR). The result was impacted by recording an allowance for doubtful debtors amounting to 215 thousand LVL (305 thousand EUR) based on a client's information about their liquidity problems. It is expected that the debt will be recovered by spring 2011 based on the agreed payment schedule.
Market overview
Growing demand for fixed and mobile data traffic is pushing data providers to extend their network capacity worldwide. As always, the pace of development differs significantly between regions. After the ITU recently established a 4G standard, we see mobile and wireless communications ranging between 2G and 4G, depending on the region and country. As a result different technologies for data transport are used. The major trend is still towards IP technology. Fixed telephony now moves towards data and content solution as does mobile telephony. The only difference is in the data capacity available for the individual user. From a user perspective, number of mobile phones users already substantially over exceeds fixed telephony users. During the economic downturn in 2009 many broadband data access programs were commenced by governments to connect the rural population to the internet. This year and next fixed and mobile data traffic will continue to be boosted with the implementation of these programs. This continues to drive growth in the telecom market.
Guidance
SAF Tehnika continues to pursue its previous strategy of focussing on new product development based on customer demand. There will soon be some new innovative products extending the product portfolio. The main focus will be switched to the development of next generation products as well as increasing manufacturing capacities to support higher customer demand. To increase the level of customer service, the company will extend its local presence in several regions. Besides, the company is also looking for opportunities to co-operate with other market players to extend the solution portfolio. Although longer term outlook remains unpredictable certain stability is visible in the near future.
The Company's net cash flow for the 3 month period of the financial year was a positive 1 359 574 LVL (1 934 500 EUR). The company has deposited 495 324 LVL (704 783 EUR) (deposit period more than 90 days), recorded as short-term investment in the balance. A loan of 68 thousand LVL (97 thousand EUR) with a maturity of 3 years was granted to a CIS client for the purchase of SAF Tehnika products therefore fulfilling tender conditions and further encouraging SAF's product sales in this region. The Company carried a net cash balance (excluding interest bearing liabilities) of 3 765 861 LVL (5 358 337 EUR) as at September 30, 2010.
On September 30, 2010 the Company employed 148 people. (138 people on September 30, 2009).
Balance sheet As of September 30, 2010
| Note | 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|---|
| CURRENT ASSETS | LVL | LVL | EUR | EUR | |
| Cash and bank | 3 773 261 | 2 780 745 | 5 368 867 | 3 956 644 | |
| Short-term investments | 1 | 495 324 | 0 | 704 783 | 0 |
| Customer receivables | 2 | ||||
| Accounts receivable | 2 795 981 | 1 956 924 | 3 978 323 | 2 784 452 | |
| Allowance for uncollectible receivables | -451 882 | -431 959 | -642 970 | -614 622 | |
| Total | 2 344 099 | 1 524 965 | 3 335 353 | 2 169 830 | |
| Other receivables | |||||
| Other current receivables | 3 | 33 136 | 20 853 | 47 148 | 29 671 |
| Short-term loans given | 738 | 885 | 1 050 | 1 259 | |
| Short-term loans | 22 772 | 0 | 32 402 | 0 | |
| Total | 56 646 | 21 738 | 80 600 | 30 930 | |
| Prepaid expenses | |||||
| Prepaid taxes | 23 815 | 58 059 | 33 886 | 82 611 | |
| Other prepaid expenses | 82 136 | 60 205 | 116 869 | 85 664 | |
| Total | 105 951 | 118 264 | 150 755 | 168 275 | |
| Inventories | 4 | ||||
| Raw materials | 906 516 | 358 355 | 1 289 856 | 509 893 | |
| Work-in-progress | 829 834 | 1 429 143 | 1 180 747 | 2 033 487 | |
| Finished goods | 878 759 | 769 853 | 1 250 361 | 1 095 402 | |
| Prepayments to suppliers | 29 031 | 13 863 | 41 307 | 19 725 | |
| Total | 2 644 140 | 2 571 214 | 3 762 271 | 3 658 507 | |
| TOTAL CURRENT ASSETS | 9 419 421 | 7 016 926 | 13 402 629 | 9 984 186 | |
| NON-CURRENT ASSETS | |||||
| Long-term financial assets | |||||
| Shares in companies | 5 | 500 | 0 | 711 | 0 |
| Long-term receivables | 2 | 106 489 | 0 | 151 520 | 0 |
| Deffered income tax | 57 179 | 51 025 | 81 359 | 72 602 | |
| Long-term loans | 41 750 | 590 | 59 405 | 839 | |
| Total | 205 918 | 51 615 | 292 995 | 73 441 | |
| NON-CURRENT physical assets | 6 | ||||
| Plant and equipment | 2 038 820 | 1 980 223 | 2 900 980 | 2 817 603 | |
| Other equipment and fixtures | 1 152 142 | 1 167 885 | 1 639 350 | 1 661 751 | |
| Accumulated depreciation | -2 669 108 | -2 506 595 | -3 797 799 | -3 566 563 | |
| Total | 521 854 | 641 513 | 742 531 | 912 791 | |
| Intagible assets | |||||
| Purchased licenses, trademarks etc. | 47 986 | 52 849 | 68 278 | 75 197 | |
| Total | 47 986 | 52 849 | 68 278 | 75 197 | |
| TOTAL NON-CURRENT ASSETS | 775 758 | 745 977 | 1 103 804 | 1 061 429 | |
| TOTAL ASSETS | 10 195 179 | 7 762 903 | 14 506 433 | 11 045 615 |
| LIABILITIES AND OWNERS' EQUITY | Note | 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 |
|---|---|---|---|---|---|
| CURRENT LIABILITIES | LVL | LVL | EUR | EUR | |
| Debt obligations | |||||
| Short-term loans from financial institutons | 7 400 | 2 061 | 10 530 | 2 933 | |
| Customer prepayments for goods and services | 519 552 | 277 590 | 739 256 | 394 975 | |
| Accounts payable | 7 | 1 389 736 | 743 269 | 1 977 416 | 1 057 576 |
| Tax liabilities | 173 360 | 59 874 | 246 669 | 85 193 | |
| Salary-related accrued expenses | 8 | 347 454 | 152 651 | 494 383 | 217 203 |
| Provisions for guarantees | 20 250 | 17 793 | 28 813 | 25 317 | |
| Prepaid revenue | 5 662 | 42 467 | 8 057 | 60 425 | |
| TOTAL CURRENT LIABILITIES | 2 463 414 | 1 295 705 | 3 505 125 | 1 843 622 | |
| 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 | 2 480 781 | 1 676 448 | 3 529 833 | 2 385 371 | |
| Net profit for the financial year | 276 600 | -183 634 | 393 566 | -261 288 | |
| TOTAL OWNERS' EQUITY | 7 731 765 | 6 467 198 | 11 001 309 | 9 201 993 | |
| TOTAL LIABILITIES AND OWNERS' EQUITY | 10 195 179 | 7 762 903 | 14 506 433 | 11 045 615 |
| Note | 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|---|
| LVL | LVL | EUR | EUR | ||
| Net sales | 9 | 3 158 526 | 1 650 466 | 4 494 178 | 2 348 402 |
| Other operating income | 2 587 | 18 010 | 3 681 | 25 626 | |
| Total income | 3 161 113 | 1 668 476 | 4 497 859 | 2 374 028 | |
| Direct cost of goods sold or services rendered | -1 525 104 | -1 086 410 | -2 170 027 | -1 545 822 | |
| Marketing, advertising and public relations expenses | -61 931 | -91 065 | -88 120 | -129 574 | |
| Bad receivables | 10 | -248 549 | -29 841 | -353 653 | -42 460 |
| Operating expenses | -172 702 | -126 496 | -245 733 | -179 988 | |
| Salaries, bonuses and social expenses | 11 | -597 190 | -401 784 | -849 725 | -571 687 |
| Depreciation expense | -51 247 | -92 207 | -72 918 | -131 199 | |
| Other expenses | -6 749 | -11 693 | -9 603 | -16 638 | |
| Operating expenses | -2 663 472 | -1 839 496 | -3 789 779 | -2 617 368 | |
| EBIT | 497 641 | -171 020 | 708 080 | -243 340 | |
| Financial income (except ForEx rate difference) | 9 254 | 13 940 | 13 167 | 19 835 | |
| Financial costs (except ForEx rate difference) | 0 | -629 | 0 | -895 | |
| Foreign exchange +gain/(loss) | -136 630 | -25 925 | -194 408 | -36 888 | |
| Financial items | -127 376 | -12 614 | -181 241 | -17 948 | |
| EBT | 370 265 | -183 634 | 526 839 | -261 288 | |
| Corporate income tax | -93 665 | 0 | -133 273 | 0 | |
| Net profit | 276 600 | -183 634 | 393 566 | -261 288 |
Earnings per share EPS 30.09.2010. = 0.09 LVL (0.13 EUR) EPS 30.09.2009. = -0.06 LVL (-0.09 EUR)
Cash flow statement for 3 months of the financial year 2010/11
| 30.09.2010 30.09.2009 30.09.2010 30.09.2009 | ||||
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| CASH GENERATED FROM OPERATIONS (of which) | 193 530 | 393 064 | 275 368 | 559 280 |
| Cash received from customers | 2 806 009 | 1 933 131 | 3 992 592 | 2 750 598 |
| Cash paid to suppliers and employees | -2 613 929 | -1 577 484 | -3 719 286 | -2 244 558 |
| Received tax | 1 450 | 37 417 | 2 063 | 53 240 |
| NET CASH USED IN INVESTING ACTIVITIES (of which) | 1 187 073 | 22 002 | 1 689 053 | 31 306 |
| Cash paid for other long-term investments (e.g. purchase of <50% shares) | -500 | 0 | -711 | 0 |
| Cash paid for short-term investments | 1 164 565 | 0 | 1 657 027 | 0 |
| Cash paid for purchasing non-current physical assets | -14 839 | -1 345 | -21 114 | -1 914 |
| Interest received | 37 847 | 23 347 | 53 851 | 33 220 |
| NET CASH USED IN FINANCING ACTIVITIES (of which) | -21 029 | 18 861 | -29 922 | 26 837 |
| Repayment of short-term loans | 1 219 | 165 | 1 734 | 235 |
| Repayment of long-term loans | 3 796 | 0 | 5 401 | 0 |
| Cash paid of long-term loans | -68 317 | 0 | -97 206 | 0 |
| Paid interest | 0 | -629 | 0 | -895 |
| Cash received from EU fonds | 42 273 | 19 325 | 60 149 | 27 497 |
| TOTAL CASH FLOW: | 1 359 574 | 433 927 | 1 934 500 | 617 422 |
| Cash and cash equivalents as at the beginning of period | 2 413 687 | 2 346 818 | 3 434 367 | 3 339 221 |
| Cash and cash equivalents as at the end of period | 3 773 261 | 2 780 745 | 5 368 867 | 3 956 644 |
| NET INCREASE / DECREASE IN CASH AND CASH EQUIVALENTS | 1 359 574 | 433 927 | 1 934 500 | 617 422 |
Statement of changes in consolidated equity for the 3 months period ended September 30 2010
| Share capital |
Share premium |
Currency translation reserve |
Retained earnings |
Total | |
|---|---|---|---|---|---|
| LVL | LVL | LVL | LVL | LVL | |
| As at 30 June 2008 | 2 970 180 | 2 004 204 | - | 1 676 448 | 6 650 832 |
| Dividend relating to 2008/2009 | - | - | - | -683 141 | -683 141 |
| Profit for the year | - | - | - | 1 487 474 | 1 487 474 |
| As at 30 June 2009 | 2 970 180 | 2 004 204 | - | 2 480 781 | 7 455 165 |
| Profit for the period | - | - | - | 276 600 | 276 600 |
| As at 30 September 2010 | 2 970 180 | 2 004 204 | - | 2 757 381 | 7 731 765 |
Statement of changes in consolidated equity for the 3 months period ended September 30 2010
| Share capital |
Share premium |
Currency translation reserve |
Retained earnings |
Total | |
|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | |
| As at 30 June 2008 | 4 226 185 | 2 851 725 | - | 2 385 371 | 9 463 281 |
| Dividend relating to 2008/2009 | - | - | - | -972 022 | -972 022 |
| Profit for the year | - | - | - | 2 116 484 | 2 116 484 |
| As at 30 June 2009 | 4 226 185 | 2 851 725 | - | 3 529 832 | 10 607 743 |
| Profit for the period | - | - | - | 393 566 | 393 566 |
| As at 30 September 2010 | 4 226 185 | 2 851 725 | - | 3 923 398 | 11 001 309 |
Notes for interim report
Note 1 Short-term investments
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Short-term investments | 495 324 | - | 704 783 | - |
| Short-term investments consists of deposits with a maturity period of more than 90 days | ||||
| commencing from 30/09/2010. | ||||
| Note 2 Customer receivables | ||||
| 30.09.2010 LVL |
30.09.2009 LVL |
30.09.2010 EUR |
30.09.2009 EUR |
|
| Long-term receivables | 106 489 | - | 151 520 | - |
| Accounts receivable | 2 795 981 | 1 956 924 | 3 978 323 | 2 784 452 |
| Provisions for bad and doubtful accounts receivable |
(451 882) | (431 959) | (642 970) | (614 622) |
| Total accounts receivable | 2 344 099 | 1 524 965 | 3 335 353 | 2 169 830 |
| Total receivables | 2 450 588 | 1 524 965 | 3 486 873 | 2 169 830 |
Accounts receivable were 43% larger compared with the previous year reflecting increasing sales. Provisions for bad and doubtful debts were at the same level on a year-on-year basis although new accruals for doubtful debtors were recorded amounting to 215 thousand LVL (305 thousand EUR) in the reporting period based on a client's information about their liquidity problems. Long term receivables include those whose due date is more than 360 days from the balance date. This particular debt is secured by a State export guarantee.
Note 3 Other current receivables
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Other current receivables | 33 136 | 20 853 | 47 148 | 29 671 |
The main items included in the Other current receivables are accrued interest for deposits and EU funding amounting to 23 thousand LVL assigned for participation in foreign exhibitions.
Note 4 Inventories
| 30.09.2010 LVL |
30.09.2009 LVL |
30.09.2010 EUR |
30.09.2009 EUR |
|
|---|---|---|---|---|
| Raw materials | 1 093 583 | 547 600 | 1 556 028 | 779 165 |
| Allowance for slow-moving items | (187 067) | (189 245) | (266 172) | (269 271) |
| Work-in- progress | 829 834 | 1 429 143 | 1 180 747 | 2 033 487 |
| Finished goods | 878 759 | 769 853 | 1 250 361 | 1 095 402 |
| Prepayments to suppliers | 29 031 | 13 863 | 41 307 | 19 725 |
| 2 644 140 | 2 571 214 | 3 762 271 | 3 658 507 |
Inventories in comparison with September 30 of the previous financial year 2009/10 increased by 3%. More raw materials were purchased in order to ensure present production volumes and delivery terms.
Note 5 Shares in Companies
| 30.09.2010 LVL |
30.09.2009 LVL |
30.09.2010 EUR |
30.09.2009 EUR |
|
|---|---|---|---|---|
| Shares in companies | 500 | - | 711 | - |
With the aim to attract EU funds for research and development within the sphere of electronics and electrical engineering, the Company, together with other members of the Latvian Electrical Engineering and electronic Industry Association (LETERA), co-founded a limited liability company "LEO kompetences centrs" (LEO) investing 500 LVL (711 EUR) in its equity capital and becoming the owner of 10% of its share capital.
Note 6 Non-current physical assets
| 30.09.2010 LVL |
30.09.2009 LVL |
30.09.2010 EUR |
30.09.2009 EUR |
|
|---|---|---|---|---|
| Plant and equipment | 2 038 820 | 1 980 223 | 2 900 980 | 2 817 603 |
| Other equipment and fixtures | 1 152 142 | 1 167 885 | 1 639 350 | 1 661 751 |
| Accumulated depreciation | (2 669 108) | (2 506 595) | (3 797 799) | (3 566 563) |
| 521 854 | 641 513 | 742 531 | 912 791 |
Decrease of the net book value of non current physical assets, in comparison with the year before is mainly due to accumulated depreciation. The company has started replacement of its current IT infrastructure and made investments in order to create new working places for production and testing purposes.
Note 7 Accounts payable
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Accounts payable | 1 389 736 | 743 269 | 1 977 416 | 1 057 576 |
Accounts payable have risen due to increased purchases for new products, higher production volumes and larger local marketing services rendered.
Note 8 Salary-related accrued expenses
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Salary-related accrued expenses | 347 454 | 152 651 | 494 383 | 217 203 |
Salary–related accrued expenses increased mainly because of bonuses accrued due to good financial results and increased headcount.
Note 9 Segment information
a) The Company's operations may be divided into two major structural units by product lines – CFM (Hybrid/ PDH radio) and CF IP (Hybrid/ super PDH system) as the first structural unit and CFQ (SDH) as the second unit. These structural units are used as a basis for providing information about the primary segments of the Company, i.e. business segments. Production, as well as research and development are organised and managed for each structural units (CFM, CFIP and CFQ) separately.
CFM microwave radio product line has been the main type of radio SAF has been supplying to the market over many years, yet it is still demanded and popular as ever. Such medium capacity, simple yet extremally reliable and feature rich radio forms the basis of many new deployments in the areas of rapid development of telecom networks.
CFIP - a new and growing product line is represented by 3 notable 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.
All CFIP radios are offered in most widely used frequency bands from 6 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.
Even though mentioned CFIP products are set to carry SAF Tehnika's fortunes into the future, SAF is still offering a popular CFQ radio, still widely used due to an ability to reconfigure the terminal to provide widest range of interfaces in any SAF system.
This note provides information about division of the Group's turnover and balance items by structural units by product type for 3 month of the financial year 2010/11 and financial year 2009/10.
| CFQ | CFM; CFIP | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|
| 2010/11 LVL |
2009/10 LVL |
2010/11 LVL |
2009/10 LVL |
2010/11 LVL |
2009/10 LVL |
2010/11 LVL |
2009/10 LVL |
|
| Segment assets Undivided assets |
927 067 | 1 198 365 | 3 966 623 | 3 183 176 | 840 053 | 415 350 | 5 733 743 4 461 436 |
4 796 891 2 966 012 |
| Total assets | 10 195 179 | 7 762 903 | ||||||
| Segment liabilities Undivided liabilities |
121 888 | 203 565 | 1 512 930 | 795 394 | 415 743 | 161 111 | 2 050 561 412 853 |
1 160 070 135 635 |
| Total liabilities | 2 463 414 | 1 295 705 | ||||||
| Net sales | 159 265 | 299 370 | 2 463 279 | 1 074 551 | 535 982 | 276 545 | 3 158 526 | 1 650 466 |
| Segment results | 69 020 | 64 510 | 1 227 056 | 50 571 | 198 563 | 93 835 | 1 494 639 | 208 916 |
| Undivided expenses | -999 594 | -397 940 | ||||||
| Profit from operations | 495 045 | -189 024 | ||||||
| Other income | 2 593 | 18 118 | ||||||
| Financial expenses, net | -127 373 | -12 728 | ||||||
| Profit before taxes | 370 265 | -183 634 | ||||||
| Corporate income tax | -93 665 | 0 | ||||||
| Net profit | 276 600 | -183 634 | ||||||
| Other information | ||||||||
| intangible asets Undivided additions |
0 | 0 | 11 801 | 1 084 | 83 | 0 | 11 884 2 950 |
1 084 263 |
| Total additions of property plant and equipment and intangible asets |
14 834 | 1 347 | ||||||
| Depreciation and amortization Undivided depreciation |
2 785 | 4 618 | 24 010 | 56 423 | 0 | 10 | 26 795 24 452 |
61 051 31 156 |
| Total depreciation and amortization | 51 247 | 92 207 | ||||||
| CFQ | CFM; CFIP | Other | Total | |||||
| 2010/11 EUR |
2009/10 EUR |
2010/11 EUR |
2009/10 EUR |
2010/11 EUR |
2009/10 EUR |
2010/11 EUR |
2009/10 EUR |
|
| Segment assets | 1 319 098 | 1 705 120 | 5 643 996 | 4 529 251 | 1 195 287 | 590 990 | 8 158 379 | 6 825 361 |
| Undivided assets | 6 348 054 | 4 220 255 | ||||||
| Total assets | 14 506 433 | 11 045 616 | ||||||
| Segment liabilities | 173 431 | 289 647 | 2 152 705 | 1 131 744 | 591 549 | 229 240 | 2 917 685 | 1 650 631 |
| Undivided liabilities | 587 436 | 192 991 | ||||||
| Total liabilities | 3 505 121 | 1 843 622 | ||||||
| Net sales | 226 614 | 425 965 | 3 504 930 | 1 528 948 | 762 634 | 393 488 | 4 494 178 | 2 348 402 |
| Segment results | 98 207 | 91 789 | 1 745 943 | 71 956 | 282 530 | 133 516 | 2 126 680 | 297 261 |
| Undivided expenses | -1 422 293 | -566 218 | ||||||
| Profit from operations | 704 386 | -268 957 | ||||||
| Other income | 3 690 | 25 780 | ||||||
| Financial expenses, net | -181 235 | -18 110 | ||||||
| Profit before taxes | 526 840 | -261 288 | ||||||
| Corporate income tax | -133 273 | 0 | ||||||
| Net profit | 393 566 | -261 288 | ||||||
| Other information | ||||||||
| Additions of property plant and equipment and | ||||||||
| intangible asets | 0 | 0 | 16 791 | 1 542 | 118 | 0 | 16 909 | 1 542 |
| Undivided additions | 4 197 | 374 | ||||||
| Total additions of property plant and equipment and intangible asets |
21 106 | 1 916 | ||||||
| Depreciation and amortization | ||||||||
| Undivided depreciation | 3 963 | 6 571 | 34 163 | 80 283 | 0 | 14 | 38 126 34 791 |
86 868 44 330 |
b) This note provides information about division of the Company's turnover and assets by geographical regions (customer location) for 3 month of the financial year 2010/11 and financial year 2009/10.
| Net sales | Assets | Net sales | Assets | |||||
|---|---|---|---|---|---|---|---|---|
| 2010/11 | 2009/10 | 30.09.2010 | 30.09.2009 | 2010/11 | 2009/10 | 30.09.2010 | 30.09.2009 | |
| LVL | LVL | LVL | LVL | EUR | EUR | EUR | EUR | |
| America | 633 015 | 308 635 | 289 102 | 307 128 | 900 699 | 439 148 | 411 355 | 437 004 |
| Europe, CIS | 871 819 | 473 318 | 736 136 | 529 973 | 1 240 487 | 673 471 | 1 047 427 | 754 084 |
| Asia, Africa, Middle East | 1 653 692 | 868 513 | 1 425 350 | 687 864 | 2 352 992 | 1 235 783 | 2 028 090 | 978 742 |
| 3 158 526 | 1 650 466 | 2 450 588 | 1 524 965 | 4 494 178 | 2 348 402 | 3 486 872 | 2 169 830 | |
| Unallocatted assets | - | - | 7 744 703 | 6 237 938 | - | - | 11 019 720 | 8 875 785 |
| 3 158 526 | 1 650 466 | 10 195 291 | 7 762 903 | 4 494 178 | 2 348 402 | 14 506 592 | 11 045 615 | |
| Note 10 Bad receivables | ||||||||
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |||||
| LVL | LVL | EUR | EUR | |||||
| Bad receivables | (248 549) | (29 841) | (353 653) | (42 460) |
The Company records accruals based on its accrual policy for bad and doubtful debtors. As information about a client's liquidity problems were received, the company has posted additional accruals for doubtful debts amounting to 215 thousand LVL (305 thousand EUR). It is expected that the debt can be recovered before spring 2011 based on an agreed payment schedule.
Note 11 Salaries, bonuses and social expenses
| 30.09.2010 | 30.09.2009 | 30.09.2010 | 30.09.2009 | |
|---|---|---|---|---|
| LVL | LVL | EUR | EUR | |
| Salaries, bonuses and social expenses | (597 190) | (401 784) | (849 725) | (571 687) |
Salaries, bonuses and social expenses, in comparison with the 3 month period of the previous financial year increased by 49% due to increased headcount and bonuses accrued based on good financial performance.