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Vtion Wireless Technology AG: Operating margin increases while strong growth continues

2010 H1 Results

  • Revenue of Euro 55.8 million for H1 2010, increase of 164% over H1 2009
  • EBIT margin of 30% for H1 2010
  • Net profit of Euro 9.2 million for H1 2010
  • Net cash position of approximately Euro 92 million, or Euro 5.75 per share

 

Frankfurt, Germany, 12 August 2010

Vtion Wireless Technology AG, one of the top providers of wireless data solutions for mobile computing in China, announces its half year 2010 financial results: Revenue for the half year reached Euro 55.79 million, an increase of 164% over the same period in 2009. Sales revenue for the quarter reached Euro 29.48 million, an increase of 12% from Q1 2010.

Profit from operations (EBIT) increased by 177% to Euro 16.54 in H1 2010. This increase was largely brought by the strong increase of sales revenue and gross profit in the first six months of 2010, which was the result of increased 3G wireless data card sales. The Vtion Group's EBIT margin increased from 28% in H1 2009 to 30% for both Q2 and H1 2010. The overall gross profit margin increased from 34% in H1 2009 to 37% in H1 2010. The gross margin level in the first six months of 2010 remained quite stable and increased slightly from 36% in Q1 2010 to 39% in Q2 2010.

Net profit in the first six months of 2010 amounted to € 9.2 million, an increase of 72% year-on-year. The EPS in H1 2010 reached EUR 0.58, an increase of 24% year-on-year. The net profit margin decreased from 25% in H1 2009 to 16% in H1 2010. This decrease mainly resulted from a non-cash foreign exchange loss.

"Despite the slowdown in the overall growth of the Chinese economy, our sector continued to show strong growth as the operators continued to acquire more 3G users," states Vtion CEO Chen Guoping. "Our operating margins for the quarter and half year reflect our emphasis in that area. Though we did not have a lot of news over the course of the quarter, we are pleased with the growth and results that we achieved. There remains much demand for our hardware as the operators continue to expand the reach of their networks to more people, and we will also look to expand our service and applications offerings upon our foundation as a high quality hardware provider," he concludes.

Vtion maintains a very strong balance sheet, a pre-requisite for close cooperation with China's telecom operators; Vtion's equity is at 82% of total assets. The company finished the quarter with a net cash position of approximately Euro 92 million, or Euro 5.75 per share, leaving it well-positioned for future growth.

 

The Chinese Market

The Chinese wireless network industry is currently going through a process of market development from second generation networks to network standards of the third mobile phone generation - known as 3G standards. China is the only country in the world with three different 3G wireless standards, the CDMA 2000 EVDO Network operated by China Telecom, the WCDMA Network operated by China Unicom and the TD-SCDMA Network operated by China Mobile. Network rollouts for the latter two networks are still in progress; the Vtion Group is expecting the completion of the establishment of 3G mobile networks to lead to greater demand for wireless data cards in China.


Vtion Wireless Technology at a glance

 

 

Q2

 

H1

 

 

2010

2009

+/–%

 

2010

2009

+/–%

Revenues

million € 29.48 13.88 112   55.79 21.13 164

Gross profit

million € 11.38 4.08 179   20.79 7.13 191

Gross profit margin

% 39 29 10 PP   37 34 3 PP

EBITDA

million € 9.00 3.47 159   16.73 6.06 176

EBITDA margin

% 31 25 6 PP   30 29 1 PP

EBIT

million € 8.89 3.42 160   16.54 5.97 177

EBIT margin

% 30 25 5 PP   30 28 2 PP

Net profit

million € 4.67 3.05 53   9.20 5.34 72

Net profit margin

% 16 22 -6 PP   16 25 -9 PP

Earnings per share1

0.29 0.27 10   0.58 0.47 24

Net Cash flow from operations

million € 6.74 10.30 -35   18.21 1.52 1.098

1 Computed on the basis of average weighted 15,980,000 shares for Q2 and H1 2010, and respectivelly average weighted 11,480,000 shares for Q2 and H1 2009

 

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 184 employees. The Vtion Group generated sales of EUR 67.6 million and a net profit of EUR 16.6 million in 2009. The Vtion Wireless Technology AG shares are being traded in the Prime Standard on the Frankfurt Stock Exchange with the ISIN DE000CHEN993. The company's ticker symbol is V33.

 

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

 

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