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Investor Relations News

Vtion Wireless Technology AG: Second quarter 2013 shows positive trend

2013 H1 Results 

  • Revenue amounts to 27.8 million Euros in the first six months of 2013, and Q2 2013 revenue is above Q1 2013 revenue
  • EBIT margin improves quarter to quarter, EBIT margin in H1 2013 of 7 per cent
  • Current net cash position of 122.4 million Euros, or 8.44 Euros per share
  • Full year guidance 2013 confirmed despite challenging market conditions

 

Frankfurt, 15 August 2013

For the first half of the year, Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computing in China, recorded revenues of 27.8 million Euros and an EBIT margin of 7 per cent. These results are weaker than those in the comparable period of 2012. However, Q2 revenues and earnings showed a positive trend compared to Q1 2013. Revenue improved by more than 30 per cent, from 11.8 million Euros in Q1 2013 to nearly 16.0 million Euros in Q2 2013. Vtion's EBIT margin also improved compared to the first quarter of 2013, increasing from 6 per cent in Q1 to 9 per cent in Q2.

Revenues in the first six months 2013 were mainly influenced by the discontinuation of Vtion's consumer-oriented tablet PC business as well as the decrease in the wireless routers and wireless data cards segments, which was partly offset by the increase of sales from network camera, wireless high definition sharer named "PCtoTV", mobile trade and accessories to mobile phones.

While the company's gross margin remained on a constant level in the first six months 2013, the improvement of the EBIT margin in Q2 compared to Q1 is largely due to a reduction in the ratio of selling, general and administrative expenses to sales. Cost control has been a major point of emphasis for the company since the management started to see difficulty in its operating environment.

The company's results for the first half of 2013 were primarily driven by the performance in its core business, the wireless data terminal business segment, accounting for 86 per cent of the total revenue. It consists of wireless data cards with 53 per cent, wireless router business accounting for 22 per cent and "PCtoTV" business adding 11 per cent. The new network camera, which was launched in December 2012, gained the second highest share of revenues reaching 10 per cent.

In the industry-specific computing solutions business segment, the company is now serving a current base of 6 clients. Vtion Anzhuo has continued to expand its sales offerings, with a total of 20,414 mobile applications now available through the Vmarket as well as shop-in-shop stores operated in cooperation with the three major telecom operators. The total number of applications decreased, as the company seeks to streamline its offerings and place greater emphasis on its highest-quality and best-selling applications. Therefore, less popular application offerings have been reduced to save costs.

"While I remain confident that the industry-specific computing solutions and mobile applications business segments are the future of our company, they require a lengthy building process", comments Chen Guoping, CEO of Vtion Wireless Technology. "At present, our wireless data terminals business remains a reliable driver of our financial results. I am pleased that we have remained profitable in this business segment and am confident we will continue to be so for at minimum this year and next, giving our team sufficient time to continue building our newer software-based business segments."

Vtion maintained a strong net cash position of 122.4 million Euros as at then end of June 2013, which enables the company to seize market opportunities. This amount is equivalent to 8.44 Euro per share.

 

Full year guidance 2013 confirmed

Despite challenging market conditions the company's management team remains confident that Vtion will reach the guidance of revenues between 60 and 70 million Euros and an EBIT margin between 8 and 10 per cent. The company expects revenues to improve further since the third quarter typically is the strongest of the year and Vtion has so far seen steady demand in the wireless data terminal business segment and the new product in the mobile intelligent terminal.

 

About Vtion

The Vtion Group is a leading supplier of wireless computing solutions and products for mobile Internet access via broadband wireless networks in the People's Republic of China. The company offers industry-specific computing solutions to the insurance industry through its E-Agency platform. Through its wholly owned subsidiary, Vtion Anzhuo, the company offers online applications for the Android operating system. For 2012, the company reached sales revenues of 75.6 million Euros with an EBIT margin of 9.0 per cent. 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

 

Disclaimer concerning prognoses

This communication contains forward-looking statements. Forward-looking statements are statements that are not historical facts instead they reflect Vtion's current views and expectations and the assumptions underlying them about future events. Forward-looking statements are subject to many risks and uncertainties. If any of such risks and uncertainties materialise or if the assumptions underlying any of Vtion's forward-looking statements are proving to be incorrect, Vtion's actual results may be materially different from those expressed or implied by such forward-looking statements. Vtion does not intend or assume any obligation to update these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made.

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