Investor Relations

News
Strategy
Publications
Vtion Shares
Share buy-back program
Ad hoc-Releases
Company Structure
Financial Key Figures
Financial Calendar
Corporate Governance
Directors Dealings
AGM
Delisting Purchase Offer

Investor Relations News

Vtion Wireless Technology AG: Revenues of EUR 12.6 m, cash position further improved

2011 Q1 Results

  • Foreign exchange gains lead to net profit margin of 18%
  • Share buyback in progress
  • New products to be introduced throughout the second half of 2011
  • Guidance for 2011 confirmed

 

Frankfurt, 12. May 2011

Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computer use in China, has shown a slow start to the year, reaching revenues of EUR 12.6 million and net profit of EUR 2.3 million, a decrease of about 50% compared to Q1 2010. This is due to pricing pressure in the wireless data terminal business segment, and the fact that China's operators have started to favour a more diversified approach to their procurement as opposed to the previous data card-centric model. However, the net profit margin remained at a high level of 18% due to foreign exchange gains. The results are in line with the management's expectations for the full year, as the second half of the year is expected to be stronger than the first. The company's management remains confident in reaching its previously-stated guidance of revenue between EUR 75 - 100 million and an EBIT margin of 10% - 12%.The company is currently in the process of expanding its product and application offerings.

"After the steps we are taking now, we envision Vtion emerging in 2012 as a stronger company better positioned to be competitive in the long-term. While maintaining our strong presence in the wireless data terminal space, we are in the process of diversifying our business model into the wireless intelligent terminal and mobile application markets. Wireless data terminals, particularly wireless dongles, have traditionally been the core of Vtion's business. Wireless data terminal products will remain the foundation of our business in the near future, and we maintain strong ties to each of China's telecom operators," comments Guoping Chen, CEO of Vtion Wireless Technology.

 

Cash position further strengthened

In the first three months of 2011, revenues amounted to EUR 12.6 million, a decrease by 52% compared to EUR 26.3 million in Q1 2010. This was primarily due to the decrease in the sales of wireless data cards from EUR 25.7 million in Q1 2010 by 67% to EUR 8.6 million in Q1 2011 - a result of the strong ASP decline for 3G wireless data cards brought about by the price competition and increasing usage of other means of connection to access the mobile internet. Correspondingly, profit from operations (EBIT) decreased from EUR 7.6 million in Q1 2010 by 86% to EUR 1.0 million in Q1 2011.Vtion Group's EBIT margin amounted to8% in Q1 2011, after 29% in Q1 2010.The decrease resulted from the lower gross profit margin of 3G wireless data cards.

Net profit in the first three months of 2011 amounted to EUR 2.3 million, a decrease of 49% year-on-year. Earnings per share reached EUR 0.14 in Q1 2011, after EUR 0.28 in Q1 2010. The net profit margin slightly increased from 17% to 18%. This increase was mainly due to foreign exchange gain.

Vtion's cash position remains very strong: Cash and cash equivalents amounted to EUR 104 million as of 31 March 2011, after EUR 99 million as of 31 December 2010.The company generated a positive net cash flow amounting to EUR10.2 million from operations as of 31 March 2011, representing a decrease by EUR 1.3 million compared with the net cash of EUR 11.5 million generated in operating activities in Q1 2010.

 

Share buyback in progress

Vtion intends to pay a dividend in 2011 for 15% of 2010 net profit, EUR 0.21 per share. In April, the company commenced a share buy-back program for up to EUR 4 million or approximately 1 million shares. On May 6, 2011 the company bought back the first 10,000 shares. As of May 11, 2011 the company has purchased a total of 19,225 shares, at an average price of EUR 4.08. Its strong cash position allows Vtion to return funds to the shareholders via a dividend as well as the share buy-back, invest in new product and application offerings for short-term development, and increase its long-term competitiveness through investment in R&D.

 

New products to be introduced throughout 2011

Vtion intends to release its first products in the wireless intelligent terminal space in the second half of 2011, when it will introduce both a 7-inch and 10-inch tablet PC. Given that the consumer market for such products is highly competitive and dominated by companies much larger than Vtion, the company has developed a sales strategy that emphasizes operator channels and enterprise clients, particularly in the insurance industry. Through its sales in tablet PC's, Vtion will be able to take advantage of the capacity it is building up in the mobile application sector, through our newest subsidiary, Vtion Anzhuo. Vtion Anzhuo will come fully online in the second half of the year, and serve as an integrator and distributor of mobile applications for the Android platform from both inside and outside China. "By continuing our strong presence in the wireless data terminal sector, combined with building up presence China's wireless intelligent terminal and mobile application markets, we will position Vtion's business model as one set up to compete in China's telecom and mobile internet market over the long term," states Guoping Chen.

 

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 company also offers e-reader, 3G router and embedded module products through network operator and retail distribution channels, as well as several online services. For 2010, the company reached sales revenues of Euro 102 million. 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

<< back