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Vtion Wireless Technology AG reports strong Q3 results and gives guidance for full year 2009

  • Quarterly sales up 150% year-on-year to EUR 26.6 million, EBIT up 138% to EUR 8.2 million and net profit up 157% to EUR 8.5 million in Q3 2009
  • First 9 months 2009 sales stand at EUR 47.7 million with an EBIT of EUR 14.2 million, a 29.7% EBIT-margin and a net profit of EUR 13.9 million
  • Rollout of 3G networks in China well on track
  • Guidance for the full financial year 2009: Sales of EUR 66 million - 70 million, EBIT margin approx. 29% 

 

Frankfurt, 5. November 2009

Vtion's financial performance for the third quarter of 2009 demonstrates the company's strong market position, its operational strength and the enormous growth of the Chinese 3G telecommunications market: During the third quarter of 2009 sales increased by 150 % year-on-year to EUR 26.6 million, EBIT was up 138 % year-on-year to EUR 8.2 million and net profit rose by 157% year-on-year to EUR 8.5 million. This excellent company performance was driven by the rollout of the 3G networks by the Chinese telecom operators since May 2009 leading to strong sales figures of wireless data cards of 625,427 units (+264% year-on-year), stable average selling prices for wireless data cards and a positive one-off tax effect.

 

In the first nine months of 2009 sales increased by 62% year-on-year to EUR 47.7 million, EBIT was up 50% year-on-year to EUR 14.2 million and net profit rose by 49% year-on-year to EUR 13.9 million which surpasses the company's net profit of EUR 12.4 million for fiscal year 2008.

"The Q3 figures show the tremendous success we are having with our 3G wireless data cards in China" says Vtion CEO Chen Guoping. "3G network rollouts started in May of this year and are just beginning to gain momentum. In the third quarter 2009, we sold 625,427 wireless data cards, +264% year-on-year, realizing an exceptional quarterly performance for the company. As one of the top 3 suppliers of wireless data cards in China, we are very confident to capture the growth opportunities in the market realizing attractive revenues and earnings going forward."

The Chinese telecommunications operators have continued and accelerated their 3G network roll-outs including strong investment and vigorous marketing and promotion efforts. At the end of the September 2009, China Unicom announced an investment of 40 billion RMB in supporting construction of east China's Shandong's information network infrastructure facilities and development of information service. This is representative of the overall strength and speed of the 3G network rollouts, all of which are proceeding at or ahead of schedule. In addition to the 3G network rollouts, the network operators have been expanding the scope and reach of their 3G marketing campaigns. The 3G networks have received a strong reception and are constantly gaining popularity throughout China as network coverage continues to spread and increase.

In October 2009, Vtion has seen a lower sales volume of wireless data cards at stable selling prices in comparison to September, with the sales volume for October amounting to approx. 148,000 wireless data cards. This is primarily due to the fact that businesses in China were closed for several days at the beginning of the month following the Chinese National Day on October 1st, 2009 leading to a substantially lower number of active business days in October compared to September. In addition, telecom operators and data card wholesalers made a strong sales push at the end of September to increase sales prior to the holidays period resulting in extraordinary strong sales in September. Thus, the management expects substantially higher sales volumes in November and December 2009 compared to October. Average selling prices of wireless data cards for the month of October held steady compared to September at approx. 400 RMB.

Given the strong performance of Vtion in the year so far and the current trading, the management expects for the full year 2009 to generate consolidated group sales of Euro 6670 million and expects to realize an EBIT margin of approx. 29%.

Vtion has already begun to implement future plans as outlined in the offering prospectus. The company has successfully completed development of the E1960, U1920 and U1960 data cards, and development of the E1920 and TG1960 models is proceeding according to schedule.

The outlook remains bright as Vtion implements the four main pillars of the post-IPO growth strategy:

  • Strengthen each link of the Vtion value chain, with a particular emphasis on bringing more R&D knowledge and capability in-house and lowering unit cost
  • Expand and add to the range of service offerings provided by the Mobile Business Club
  • Strengthen and expand existing sales channels while continuing to seek out and establish new and innovative sales models, such as the virtual network operations (VNO)
  • Build upon existing relationships with the three main telecommunications operators in order to strengthen the depth and extent of our strategic cooperation with them

 

About Vtion

The Vtion Group is one of the three leading suppliers of wireless data cards and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. The Vtion Group concentrates mainly on the development and sale of wireless data cards, including provision of appropriate after-sales services. The Vtion Group also supplies Internet-based data service solutions. The company has about 155 employees as of September 30, 2009. The Vtion Wireless Technology AG shares are being traded in the Prime Standard on the Frankfurt Stock Exchange with the ISIN DE000CHEN993.

 

For further information, please contact:
Kirchhoff Consult AG
Dr Kay Baden, tel.: +49 40 60 91 86 0, baden@kirchhoff.de
Janina Wismar, tel.: +49 40 60 91 86 50, janina.wismar@kirchhoff.de
or visit the company website at: www.vtion.de

 

Disclaimer:

This document contains forward-looking statements and information - that is, statements related to future, not past, events. These statements may be identified by words such as 'expects,' 'looks forward to,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'will,' 'project' or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Vtion's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Vtion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions (including margin developments, the legal and regulatory framework, changes in currency exchange rates and interest rates. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Vtion does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

 

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