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Vtion Wireless Technology AG reports a further decline of revenues and EBIT

Results 9 months 2015

  • Revenues decreased by 48 per cent to EUR 18.6 million year-on-year
  • EBIT margin dropped by 7 percentage points to 1 per cent
  • Outlook for full financial year 2015 forecasts revenues of around EUR 20 million and an EBIT margin of approximately 1.2 per cent

 

Frankfurt, November 30, 2015

Vtion Wireless Technology AG (Vtion), a supplier of wireless data terminals and associated services for mobile computing via broadband wireless networks in China, generated revenues of EUR 18.6 million in the first 9 months of 2015. This corresponds to a decrease of 48 per cent compared to the same period 2014. The weak demand affected the EBIT margin that dropped from 8 per cent to 1 per cent, while the gross profit margin remained comparatively stable at 19 per cent (9M 2014: 20 per cent).

The decline of revenues affected all the three segments of Vtion comprising of "Wireless Data Terminals", "Wireless Intelligent Terminals" and "All Others". In the third quarter 2015, Vtion generated EUR 2.3 million in total representing a decline of 81 per cent compared to the previous year's period (Q3 2014: EUR 12.4 million).

The company's core business "Wireless Data Terminals" comprises of wireless data cards, routers and high definition sharers which contributed EUR 18.3 million to the total revenues in the first 9 months 2015 (9M 2014: EUR 22.1 million). Vtion's most important products in the core business remained wireless data routers based on the 4G-techology for the Chinese operators China Unicom and China Telecom. During the reporting period the company generated revenues of EUR 10.3 million with wireless routers (9M 2014: EUR 11.0 million). The decrease of total revenues during the reporting period was mainly due to lower sales of wireless data cards using the 3G-technology as more and more other devices are used to get access to the mobile internet.

The demand for other products from the remaining segments that among these are wireless data cards developed specifically for the storage and transfer of tax data, a health self-checking instrument and a network camera remained low.

"Due to the margin pressure we face in our core business we currently focus on specific-use products that generally command higher selling prices such as the wireless data module to transmit transaction data to tax authorities. Currently, we are in the exploratory phase, but will likely introduce new products in 2016 at the earliest", says Vtion's CEO Chen Guoping.

Although the Management was able to reduce the cost of sales by 47 per cent to EUR 15.0 million year-on-year, the company's EBIT decreased by 93 per cent to around EUR 0.2 million due to the lower revenues. Compared with the same period 2014, EBIT margin decreased by 7 percentage points to 1 per cent. This resulted from a decrease of the overall gross profit margin and an increase of ratios of operating expenses to total sales. As of September 30, 2015, Vtion's cash and cash equivalents amounted to EUR 141.9 million.

Vtion expects the operational difficulties to continue in the remaining year 2015. The secular slowdown in the Chinese economy and headwinds to the company's core business are likely to continue. Therefore the Management Board expects the revenues to be somewhere around EUR 20 million with an EBIT margin of approximately 1.2 per cent for 2015.

 

About Vtion

The Vtion Group is a 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. Vtion Wireless Technology AG was established in 2002 and currently has 69 employees. The 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
Andreas Friedemann, phone: +49 40 60 91 86 0, mail: andreas.friedemann@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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