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Vtion Wireless Technology AG stays profitable

Full Year Results 2013

  • Revenues of 60 million Euros and EBIT Margin of 8.4% in line with prior guidance
  • 86.2% of the revenues were generated in the wireless data terminals business segment
  • Net Profit Margin remains at 7%, EPS at 0.33 Euro
  • Dividend policy of distributing 15% of the group's 2013 net profit continued
  • Similar financial results for 2014 expected

 

Frankfurt, April 29, 2014

Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computing in China, generated revenues of 60 million Euros (2012: 75.6 million Euros) in 2013. While EBIT decreased by 27% to 5.03 million Euros corresponding to an EBIT margin of 8.4%, net profit margin remained on the previous year's level of 7%. For the year 2013 the Management Board intends to distribute 15% of the net profits after tax as dividend to shareholders.

Despite the pricing pressure in the market for wireless data terminal business Vtion Wireless Technology AG (Vtion) realized 86.2% of its revenues (2012: 85%) in this segment which derived primarily from sales of wireless data cards, followed by mobile router and wireless high definition sharer named "PCtoTV" sales. Around 10% of the Group's total revenues were generated with the special network camera "VCam" that Vtion launched in December 2012. Faced with falling margins in the wireless data terminals segment, Vtion has started offering special-use wireless data cards, such as a monitoring and transmitting device for tax authorities. This product has been sold to local tax bureaus to monitor and store revenue data from enterprises in Guangdong Province.

 

Business development

During the reporting period the Company started to offer four products in this segment suitable for the new 4G-technology in the Chinese telecom market. As the technique begins to mature and the demand starts to grow Vtion is able to use the long-term relationships to three telecom operators in China.

Furthermore Vtion's industry-specific computing solutions business has been merged into the company's owned subsidiary, Vtion Anzhuo, in order to streamline the company's software-based business operations. Together, this segment is expected to contribute to a larger proportion of revenues and profits in 2014. During the year 2013, Vtion managed to expand its client base from 5 to 7 clients in the industry-specific computing solutions business. Revenue per client remained low in 2013 the company has taken the approach of seeking to expand its client base with a particular emphasis on larger state-owned insurance companies.

In addition to that VtionAnzhuo has continued to expand its sales offerings: It increased from 20,839 mobile applications by the end of 2012 up to 35,268 mobile applications that were available by the end of the reporting period through the Vmarket as well as shop-in-shop stores operated in cooperation with the three major telecom operators. Meanwhile, Vtion will seek cooperation with large-screen device manufactures who have a strong market position in the hardware business but lack the capability of creating an operating applications platform to synchronize with their hardware offerings.

"I am pleased to see that we met our guidance for 2013, albeit at the lower end of the stated range," says Vtion CEO Chen Guoping. "Our hardware business has proven resilient in the face of some market headwinds, and we are proud of our efforts to expand our offerings in this segment and find new markets for our wireless data terminals. I am pleased with the progress we are making in Vtion Anzhuo, and it is nice to know that we will continue to experience solid results in our hardware business to allow time to better monetize our software-centric operations," concludes Chen Guoping.

 

Returning cash to shareholders

By December 31, 2013 Vtion had a strong net cash position: Cash and cash equivalents were at 126.6 million Euros, which enables the company to seize market opportunities. This amount is equivalent to 8.73 Euro per share. Vtion has started a share buyback program in the form of a voluntary tender offer to all shareholders on April 11, 2014 that is currently ongoing. The company offered to repurchase a total of 1,329,849 shares for an offer price of 2.95 Euros, which is a 20% premium to the reference price. Additional information on the offer are provided on the company's website. Despite the lower revenues Vtion's Management and Supervisory Board intend to propose a dividend payment corresponding 15% of the previous year's group net profit to the Annual General Meeting that will be held on June 25, 2014.

 

Outlook for 2014

Vtion plans to expand its offerings of special-use wireless data terminal products over the course of 2014, as well as to promote the card designed for tax authorities currently in other provinces around the country. As the operators have received their 4G-technology-licenses, Vtion is planning to develop further products based on 4G-technology to be sold directly to the operators, particularly in the TD-LTE-standard operated by China Mobile.

Though the market environment should remain difficult due to pricing pressure and rare opportunities of monetization in the software-based business segment the company expects revenues of at least 60 million Euros, with an EBIT margin consistent with that of 2013 about 8% due to maintaining a very lean cost structure.

 

 

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 2013, the company generated sales revenues of nearly 60 million Euros with an EBIT margin of 8 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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