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Vtion Wireless Technology AG: Steady growth continues in Q3, operating margins remain strong

2010 Q3 Preliminary Results

  • Revenue for the nine month period of Euro 85.64 million, growth of 79.5% over the same period in 2009
  • Gross margin of 38% for the nine month period in 2010, up from 34% in 2009
  • EBIT of Euro 26.56 million for the nine month period, a margin of 31%
  • Nine month period net profit of Euro 20.78 million, growth of nearly 50% year-on-year

 

Frankfurt, Germany, 15 November 2010

Vtion Wireless Technology AG, one of the top providers of wireless data solutions for mobile computing in China, announces its preliminary Q3 2010 unaudited financial results: Revenue reached Euro 29.85 million for the quarter and Euro 85.64 for the nine month period, an increase of 79.5% over the nine month period in 2009. The company continues to show strong operating margins, with a gross margin of 38% and an EBIT margin of 31% for the nine month period.

 

Strong Profitability Continues

Profit from operations (EBIT) increased by 87.2% to Euro 26.56 million for the first nine months of 2010. This growth is driven largely by continued growth in the Chinese 3G market, with more users switching to the newer networks, which drives demand for Vtion's 3G products. Vtion maintained a strong gross margin of 40% for the quarter and 38% for the nine month period. This is due to the company experiencing economies of scale as its sales volume increases and its constant emphasis on maintaining a lean cost base.

 

Net Margin Improves in Third Quarter

Vtion achieved a net profit of Euro 11.57 million for the quarter, bringing net profit for the first nine months of the year to Euro 20.78 million, an increase of nearly 50% year-on-year. Due to favourable developments in the Euro/RMB exchange rate, Vtion's net profit margin for the quarter is 39%, bringing the net profit margin for the nine month period to 24%.

 

Outlook

"We are proud to announce another strong quarter, in which we saw not only continued growth in our business and in the 3G market, but also the continuation of our strong margins," states Vtion CEO Chen Guoping. "We expect to see a slowdown in our sector as the year draws to a close, a phenomenon similar to what we saw as 2009 came to a close. However long-term growth prospects for China's 3G market remain strong. We have already added several new products to our portfolio to end the year, and will look to evolve our strategy more ambitiously beginning next year to more fully benefit from the full range of opportunities in the Chinese 3G space and continue to create greater shareholder value," he concludes.

 

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

 

 

Q3

 

Nine Months YTD

 

 

2010

2009

+/–%

 

2010

2009

+/–%

Revenues

million € 29.85 26.6 12   85.64 47.73 79

Gross profit

million € 12.02 9.05 33   32.81 16.18 103

Gross profit margin

% 40 34 6pp   38 34 4pp

EBITDA

million € 10.14 8.3 22   26.87 14.36 87

EBITDA margin

%  34 31 3pp   31 30 1pp

EBIT

million €  10.02 8.23 22   26.56 14.2 87

EBIT margin

% 34 31 3pp   31 30 1pp

Net profit

million € 11.57 8.54 35   20.78 13.88 50

Net profit margin

% 39 32 7PP   24 29 -5PP

 

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 currently has about 180 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

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