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Vtion Wireless Technology AG: Improving Results in Q2

2012 H1 Results

  • Revenue increased by 16%;
  • EBIT increased by 34%;
  • Business development in line with expectations;
  • Solid start to third quarter

 

Frankfurt, 13 August 2012

Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computing in China, recorded good results in the first half of 2012. Year-on-year, revenues grew by 16% from EUR 31.98 million to EUR 37.18 million. EBIT increased by 34% from EUR 2.93 million to EUR 3.94 million. EBIT margin was at 11%, which is higher than the margin in H1 2011 (9%).

As the 50% tax exemption time expired at 31 December 2011, Vtion partly applied an effective tax rate of 25% since the beginning of 2012 in accordance with the Income Tax Law of the PRC. This is why Vtion's net profit decreased by 33% compared to the first half of 2011 despite an increase in profit before tax. In the first six months of 2012, net profit amounted to EUR 2.72 million. As of 30 June 2012, Vtion had a net cash position of EUR 113.83 million. Net cash per share as at 30 June 2012 amounted to EUR 7.85.

 

Development in New Business Segments

While Vtion still generates the majority of its revenues in the wireless data terminal business segment, it has responded to weakening demand for wireless data cards both increasing its offerings of wireless routers in that segment, and by diversifying into other business segments. Compared to the first half of 2011, sales from the wireless router business increased by 181% to EUR 9.0 million.

18% of Vtion's revenue for the second quarter 2012 came from the mobile intelligent terminal business segment. Revenues in this segment continue to come almost exclusively from the V7 tablet PC, which is sold to consumers through Vtion's sales and distribution partners. Vtion is working on an improved version of its 7-inch tablet PC, along with a 5-inch model and a "rugged tablet" that is waterproof and can be used in adverse conditions. In H1 2012, sales from the VPAD amounted to EUR 7.0 million.

Vtion Anzhuo has continued to expand its application offerings and deepen cooperation with other device manufacturers. At the end of the second quarter 2012, a total of 10,672 applications were offered.

"We have stayed on target both with our financial results in relation to our guidance for the full year, as well as in terms of our business development goals in each of our respective segments. From our end, we are taking the right steps by continuing to diversify and expand our business model," states Chen Guoping, CEO of Vtion Wireless Technology AG.

 

Broadband Network Development Plan

As of early August, Vtion has started work on a broadband network development project in cooperation with China Unicom in Fujian province. Though Unicom builds and operates the province-wide network, it has outsourced the so-called "final km" in certain areas to Vtion. Vtion is responsible for constructing the connections in commercial and residential properties and then selling and marketing the connections and service plans, for which it will be paid a commission for each connection activated. Vtion has allocated EUR 1.7 million for the project for 2012; currently the project is progressing according to plan.

 

Outlook confirmed

Vtion's business development is proceeding in line with expectations. The management remains confident the company will reach its stated guidance for 2012 and still expects revenues of between EUR 80 million and EUR 100 million, with an EBIT margin largely consistent with that of 2011.

This outlook implies growth of between 4% and 30% compared to 2011. Vtion believes a minimum of 5% revenue growth is sustainable for the next three years at a minimum, relying on organic growth of the company businesses.

The company expects that the wireless data business segment will remain profitable for at least the next two years and contribute approx. 50% of revenues over the course of 2012. Vtion Anzhuo is expected to contribute 15%-20% of total company revenue by 2015.

 

About Vtion

The Vtion Group is a leading supplier of wireless data terminals and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. The company offers tablet PC products and support services through its mobile intelligent terminals business segment, including both to the consumer market and industry-specific clients. Through its wholly-owned subsidiary, Vtion Anzhuo, the company offers online applications for the Android operating system. For 2011, the company reached sales revenues of EUR 77 million with an EBIT margin of 10.3%. 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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