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Vtion Wireless Technology AG: Financial results within the Guidance for 2013

Nine-Months-Results 2013

  • Revenues reached 45.26 million Euros (9M 2012: 58.73 million Euros) in the first nine months 2013
  • EBIT margin decreased by 2 percentage points compared to the period of previous year, representing 8% in the first nine months 2013
  • Current net cash position of 123.61 million Euros or 8.53 Euros per share
  • Full year guidance 2013 confirmed despite challenging market conditions

 

Frankfurt, 14 November 2013

Vtion Wireless Technology AG, one of the leading suppliers of wireless data terminals and associated services for the mobile use of computers via broadband wireless networks in China, announces its first nine months financial results of 2013, representing revenues of 45.26 million Euros and an EBIT margin of 8%. Revenues have decreased by 23% compared to the reporting period 2012, when 58.73 million Euros had been reached. Vtion's EBIT margin increased, from 9% in the second quarter to 10% in the third quarter 2013 (Q3 2012: 8%).

Revenues in the first nine months 2013 were mainly influenced by the discontinuation of Vtion's consumer-oriented tablet PC business as well as the price pressure in the wireless routers and wireless data cards segments, which were partly offset by the increasing sales of network cameras and wireless high definition sharer named "PCtoTV".

The decrease of the EBIT margin compared to the same reporting period of 2012 is largely due to an increase 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.

During the first nine months of 2013, the majority of revenues developed constantly: The wireless data terminals segment, which consists of wireless data cards, contributed 53.5% to the total revenues. Wireless router business accounted for 21.7% and "PCtoTV" business added 10.6% to the revenues. In the wireless intelligent segment, the new network camera, which was launched in December 2012, contributed 10.1% to the revenues.

In the industry-specific computing solutions business segment, the company is now serving a current base of seven clients. Vtion Anzhuo has continued to expand its sales offerings, with a total of 22,017 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.

The company's equity capital grew slightly compared to the previous reporting period up to 136.7 million Euros by the end of September 2013 with an equity-ratio of 89%. The net cash generated from operating activities improved significantly from -1.9 million Euros in the first nine months of 2012 to 6.8 million Euros in the same period of 2013.

Vtion maintained a strong net cash position of 123.6 million Euros at the end of September 2013. This amount is equivalent to 8.53 Euros per share.

"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 core business segment and we are confident that 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."

 

Guidance for the financial year 2013 confirmed

Despite challenging market conditions the company's management team still projects the company will reach its guidance of revenues between 60 and 70 million Euros and an EBIT margin between 8 to 10%. The company expects steady revenues in the fourth quarter, despite the fact that the quarter is typically weaker than the third, due to reduced procurement on the part of the telecom operators heading into year-end.

 

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, VtionAnzhuo, the company offers online applications for the Android operating system. For 2012, the company reached sales revenues of 75.6 million Euro with an EBIT margin of 9%. 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:

irchhoff 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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