Aspocomp Group Oyj Interim report May 14, 2009 at 9:00 am
ASPOCOMP'S INTERIM REPORT JANUARY 1 - MARCH 31, 2009
In this financial statements bulletin, the Group's business has been
presented in line with IFRS standards, divided into continuing
operations as well as divested and discontinued operations. Continued
operations comprise Aspocomp Oulu Oy and headquarter operations of
Aspocomp Group Plc. These operations form one business segment.
- Net sales: EUR 3.3 million (EUR 5.2 million 1-3/2008).
- Operating profit before depreciation (EBITDA): EUR 0.0 million
(0.4).
- Operating profit (EBIT): EUR -0.3 million (-0.1).
- Earnings per share (EPS) from continuing operations: EUR -0.01
(-0.01).
- Earnings per share (EPS) from divested and discontinued operations:
EUR 0.00 (0.00).
- Cash flow from operations: EUR 0.7 million (0.6).
- Operating profit before depreciation (EBITDA) is estimated to
remain positive throughout the year 2009.
ISTO HANTILA, PRESIDENT AND CEO:"Despite the challenging market situation Aspocomp's Oulu plant
stayed on black. As expected, group operating result was 0.3 million
euros negative. Net sales during the same period last year was
exceptionally high due to two significant one-time deliveries
totaling almost one and a half million euro.
Market will be challenging throughout the year 2009. However, EBITDA
is expected to remain positive during the period. Thus, also cash
flow remains positive.
Due to decrease of working capital and tight cost control Group's
cash flow was positive during the first quarter of 2009. Cash in hand
was increased by 0.5 million euros.
Aspocomp Group's is financially stable and the company can continue
as is. Alternatively, the group can be further developed through
ownership arrangements."
THE GROUP BUSINESS ACTIVITIES
The Aspocomp Group company Aspocomp Oulu Oy supplies PCBs for
telecom, automotive and industrial electronics industries and
provides PCBs for prototyping, ramp up and small series. Its service
portfolio includes quick-turn deliveries, fulfilling urgent PCB needs
(also in high-volume deliveries), developing and commercializing new
technologies, carrying out material reports as well as close
cooperation with high-volume manufacturers. Aspocomp Oulu's primary
PCB technologies are HDI (High Density Interconnection), multilayer
(up to 28 layers), heat-sink and Teflon- or ceramic-based PCBs.
The Aspocomp Group has a 20% stake in the joint venture Meadville
Aspocomp (BVI) Holdings Limited. The financial crisis spilled over
into the real economy, and consequently the demand for high-volume
HDI PCBs declined substantially within the entire industry. Meadville
Aspocomp (BVI) Holdings Limited reacted to the market slump by
holding up the Indian plant project. The capacity and headcount of
the Suzhou, China plant was adjusted in line with the reduced HDI
PCBs demand. In March 2009 Meadville Aspocomp (BVI) Holdings Limited
started to re-hire at the Suzhou plant step by step due to improved
market demand as followed by the China 3G set up and scheduled
launching in May 2009.
In addition, Aspocomp holds 14.11% share of a Thai company PCB Center
Co., Ltd. (former subsidiary Aspocomp (Thailand) Co., Ltd.) and 5.34%
share of Imbera Electronics.
Aspocomp's ownership in PCB Center increased from 6.17% to 14.11 % on
March 31st, 2009. The increase in ownership is a result of conversion
of 48 million baht, about one million euros, loan into equity based
on the agreement signed on October 16th, 2008.
Loan conversion has no impact on profit, nor cash flow, as the debt
receivable was valued zero at Aspocomp's financial statements in
2008.
CONSOLIDATED NET SALES AND OPERATING PROFIT
(Reference figures are for 1-3/2008, includes only continuing
operations)
Net sales and operating profit, EUR million
1-3/2009 Change, 1-3/2008
%
Net sales 3.3 -36.6 5.2
Operating -0.3 -0.1
profit
Aspocomp's five largest customers accounted for 74 percent of net
sales (78%).
The Group's net financial expenses were EUR -0.2 million (-0.4).
Profit for the first quarter from continuing operations was EUR -0.5
million (-0.4) and earnings per share from continuing operations were
EUR -0.01 (-0.01).
FINANCING, INVESTMENTS AND EQUITY RATIO
The Aspocomp Group's cash flow from operations during the period was
EUR 0.7 million (0.6). Net liquid assets at the end of the period
amounted to EUR 4.8 million (8.6).
Interest-bearing net debt was EUR 18.2 million (30.3). Gearing
decreased to 350.3 percent (746.9%). Non-interest bearing liabilities
amounted to EUR 6.1 million (15.5).
Investments in continuing operations were EUR 0.1 million (0.3).
Net financial expenses amounted to 5.7 percent of net sales (6.1%).
The Group's equity ratio stood at 15.2 percent (6.9%).
SHAREHOLDERS' EQUITY OF THE PARENT COMPANY
In accordance with the requirements of the Companies Act, the Trade
Register has been notified of the loss of share capital on May 14,
2008. The shareholders' equity of Aspocomp Group's parent company,
Aspocomp Group Oyj, was EUR 1.6 million negative at the end of the
first quarter. However, the shareholders' equity of Aspocomp Group
was EUR 5.2 million positive at the end of the first quarter.
RESEARCH AND DEVELOPMENT
Aspocomp Oulu Oy engages in R&D primarily through cooperation with
its customers and suppliers. Customers share their views on their
future technology choices based on which research efforts are
targeted. Correct timing of investments is vital for maintaining
efficiency and technological viability. Research and product
development costs are recognized in plant overhead.
SHARES AND SHARE CAPITAL
The total number of Aspocomp's shares at December 31, 2008, was
49,905,130 and the share capital stood at EUR 20,082,052. Of the
total shares outstanding, the company held 200,000 treasury shares,
representing 0.4 percent of the aggregate votes conferred by all the
shares. The number of shares adjusted for the treasury shares was
49,705,130.
A total of 8,136,725 Aspocomp Group Oyj shares were traded on OMX
Helsinki Stock Exchange during the period from January 1 to March 31,
2009. The aggregate value of the shares exchanged was EUR 662,967.
The shares traded at a low of EUR 0.05 and a high of EUR 0.10. The
average share price was EUR 0.08. The closing price at March 31,
2009, was EUR 0.10, which translates into market value of EUR
4,970,513. At the end of the period, nominee-registered shares
accounted for 5.8 percent of the total shares and 0.3 percent were
directly held by non-Finnish owners.
PERSONNEL
During the period, the Aspocomp Group had an average of 112 employees
(159). The personnel count on March 31, 2009 was 113 (151). Of them,
76 (89) were non-salaried and 37 (62) salaried employees. The
reference numbers are from the continuing operations.
CLAIMS BY THE FORMER EMPLOYEES OF ASPOCOMP S.A.S.
The Labour Court of Evreux ruled on January 2009 that Aspocomp Group
Plc has to pay to thirteen former employees of its French Subsidiary,
Aspocomp S.A.S., approximately EUR 0.5 million including the
interest.
The decision of the court relates to the claims raised by twenty-one
former Aspocomp S.A.S employees (Aspocomp's stock exchange release
18.2.2008).
Two of the twenty-one employees accepted Aspocomp's settlement offer.
The court did not proceed with the remaining six claims.
The payment to be made by Aspocomp shall not have an effect on the
financial results, because Aspocomp has made a reservation in its
2007 financial statements.
Aspocomp has appealed the decision to the next instance in France.
DECISIONS OF ASPOCOMP GROUP OYJ'S ANNUAL GENERAL MEETING
The Annual General Meeting of Aspocomp Group Plc held on 21 April
2009 re-elected the current Board and decided that the remunerations
of the members of the Board will remain the same as in 2008. The
General Meeting also decided to amend the company's Articles of
Association. Furthermore, the Meeting decided not to pay dividend for
2009.
The Annual General Meeting decided to set the number of Board members
at three (3) and re-elected the current members of the Board: Johan
Hammarén, Tuomo Lähdesmäki, and Kari Vuorialho. The Meeting
re-elected PricewaterhouseCoopers Oy as the company's auditor for the
2009 financial year.
An annual remuneration of EUR 24,000 will be paid to the chairman of
the Board and EUR 12,000 to the other Board members. 60% of the
annual remuneration will be paid in cash and 40 % in company shares,
which will be acquired and distributed to Board members. EUR 1,000
per meeting will be paid to the chairman and EUR 500 per meeting to
the other members. The members of the Board residing outside of the
Greater Helsinki area are reimbursed for reasonable travel and
lodging expenses. The auditor will be paid according to invoice.
The Annual General Meeting decided to amend the Articles of
Association so that Articles 6 and 12 be deleted as unnecessary and
the new Article 10 be amended to read as follows: "Article 10 The
notice of meeting shall be delivered to the shareholders at the
earliest three (3) months and at the latest twenty-one (21) days
prior to the General Meeting by publishing the notice on the
company's website and, should the board of directors so decide, in
one widely circulated newspaper specified by the Board."
THE BOARD OF ASPOCOMP GROUP PLC., AUTHORIZATIONS GIVEN TO THE BOARD
In its organization meeting, the Board of Directors of Aspocomp Group
Oyj re-elected Tuomo Lähdesmäki as Chairman of the Board. As the
Board only comprises three (3) members Board committees were not
established.
The Annual General Meeting 2008 of Aspocomp Group Oyj authorized the
Board to decide on issuing new shares and conveying the Aspocomp
shares held by the company. A maximum of 55,000,000 new shares can be
issued and/or granted on the basis of special rights.
The Annual General Meeting 2008 also authorized the Board of
Directors to issue stock options to the present or future CEO. The
Board of Directors has not granted the said stock options.
Details of the authorizations can be found from pages 10-11 of the
Annual Report 2008 (www.aspocomp.com/linked/investor/ar_2008.pdf) as
well as the interim reports of the year 2008. Authorizations are
valid 5 years from the respective Annual General Meeting.
EVENTS AFTER THE FINANCIAL PERIOD
CFO, Mr. Pertti Vuorinen retired as planned at the end of April 2009.
Mr. Sami Holopainen, Lic.Sc. (Tech.), was appointed Chief Financial
Officer of Aspocomp Group Oyj as of May 1, 2009.
ASSESSMENT OF BUSINESS RISKS
Significant indebtedness
The Aspocomp Group's interest-bearing liabilities at March 31, 2009
amounted to about EUR 22.8 million under IFRS and had a nominal value
of about EUR 25.6 million.
Liquidity and financial risks
Because of the agreement on debt restructuring, management of the
Group's liquidity risk is based on the cash assets of the parent
company and the cash flow generated by the Oulu plant. If Aspocomp
Group Oyj does not obtain financing from Aspocomp Oulu Oy, or its
associated company Meadville Aspocomp Holdings in the form of
dividends or other income, or other ways of financing, to cover its
expenses by 2013, the company may ultimately become insolvent.
Litigations
In 2007 the French Supreme Court ordered the company to pay
approximately EUR 11 million, including annual interest of about 7
percent, to 388 former employees of Aspocomp S.A.S. In January 2009,
The Labor Court of Evreux, France ruled that the company has to pay
approximately EUR 0.5 million in compensation, with interest, to
additional 13 former employees. Further, the Court did not proceed
with six claims. The aforementioned compensations do not have profit
impact during 2009.
Claims are related to the notice time salaries of the closed, heavily
loss making Evreux plant. The closure took place in 2002.
There is a risk that the remaining approximately 100 employees may
also institute proceedings. In France, the statute of limitations for
filing a suit is 30 years.
OUTLOOK FOR THE FUTURE
Aspocomp's financial position is satisfactory thanks to the
implemented arrangements. The Group's lean cost structure and the
outlook for operations in Oulu enable the continuity of operations.
Net sales in 2009 are expected to decline due to difficult market
situation and the solutions the Group has implemented to reduce
risks. Operating profit before depreciation (EBITDA) is estimated to
remain positive.
In addition to developing the continuing operations of the Group, the
Board of Directors is looking into various structural development
solutions, including carrying out company reorganization in the
future.
ACCOUNTING POLICIES
All figures are unaudited. Aspocomp's financial statements bulletin
has been prepared in accordance with IAS 34, Interim Financial
Reporting. The accounting principles that were applied in the
preparation of the financial statements of December 31, 2008 have
been applied in the preparation of this report. However, as of Jan
1st, 2009 the company has applied following new or modified
standards:
- IAS 1 Presentation of Financial Statements - modification
- IFRS 8 Operating Segments
IAS 1 modification changes the structure of Income and Changes in
Equity statements. IFRS 8 does not impact on any presented financial
information.
STATEMENT OF CHANGES IN EQUITY,
JANUARY-MARCH 1-3/09 1-3/08 1-12/08
KEUR % KEUR % KEUR %
NET SALES 3 304 100.0 5 209 100.0 20 682 100.0
Other operating income 52 1.6 661 12.7 1 616 7.8Materials and services -1 142 -34.6 -2 003 -38.5 -8 706 -42.1
Personnel expenses -1 411 -42.7 -2 125 -40.8 -6 218 -30.1
Other operating income -784 -23.7 -1 374 -26.4 -5 145 -24.9
Depreciation and
amortization -282 -8.5 -443 -8.5 -1 686 -8.2
OPERATING PROFIT -263 -8.0 -76 -1.5 543 2.6
Financial income and
expenses -187 -5.7 -365 -7.0 -1 876 -9.1
Share of loss of associate -1 020 -4.9
PROFIT ON CONTINUING
OPERATIONS BEFORE TAX -450 -13.6 -441 -8.5 -2 353 -11.4
Taxes -1 0.0 0 0.0 -145 -0.7
PROFIT ON CONTINUING
OPERATIONS -451 -13.7 -441 -8.5 -2 498 -12.1
Profit on discontinuing
operations 0 0.0 1 0.0 2 839 13.7
PROFIT FOR THE PERIOD -451 -13.7 -440 -8.4 341 1.7
Other comprehensive income for the period, net
of tax
Currency translation
differences -4 -0.1 -939 -18.0 -840 -4.1
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD -455 -13.8 -1 379 -26.5 -499 -2.4
Profit for the period
Attributable to:
minority interests 2 0.1 85 1.6 270 1.3
equity shareholders -452 -13.7 -526 -10.1 71 0.3
Other comprehensive income
Attributable to:
minority interests 2 0.1 85 1.6 270 1.3
equity shareholders -457 -13.8 -1 464 -28.1 -769 -3.7
Earning per share from
continuing operations
Basic earnings per share -0.01 -0.01 -0.06
Diluted earnings per share -0.01 -0.01 -0.06
Earning per share from
discontinued operations
Basic earnings per share 0.00 0.00 0.06
Diluted earnings per share 0.00 0.00 0.06
CONSOLIDATED BALANCE SHEET
3/09 3/08 Change 12/08
ASSETS KEUR KEUR % KEUR
NON-CURRENT ASSETS
Intangible assets 3 075 3 375 -8.9 3 037
Tangible assets 3 232 12 093 -73.3 3 462
Investments in associated companies 15 925 15 419 3.3 15 831
Investment property 0 2 595 -100.0 0
Available for sale investments 44 57 -23.5 44
Other non-current receivables 0 1 400 0
TOTAL NON-CURRENT ASSETS 22 275 34 940 -36.2 22 374
CURRENT ASSETS
Inventories 2 024 5 659 -64.2 2 089
Short-term receivables 5 102 9 239 -44.8 6 034
Cash and bank deposits 4 765 8 643 -44.9 4 255
TOTAL CURRENT ASSETS 11 890 23 541 -49.5 12 378
TOTAL ASSETS 34 165 58 481 -41.6 34 752
SHAREHOLDER'S EQUITY AND
LIABILITIES
Share capital 20 082 20 082 0.0 20 082
Share premium fund 27 918 27 918 0.0 27 918
Treasury shares -758 -758 0.0 -758
Special reserve fund 45 989 45 989 0.0 45 989
Funds for investments for
non-restricted equity 23 885 23 885 0.0 23 885
Retained earnings -112 630 -113 821 -1.0 -112 173
Equity attributable to shareholders 4 486 3 295 36.2 4 943
Minority interest 696 763 -8.8 694
TOTAL EQUITY 5 182 4 058 27.7 5 637
Long-term borrowings 22 641 24 551 -7.8 22 480
Provisions 176 1 021 -82.7 311
Short-term borrowings 276 14 397 -98.1 367
Trade and other payables 5 890 14 456 -59.3 5 957
TOTAL LIABILITIES 28 984 54 423 -46.7 29 115
TOTAL SHAREHOLDER'S EQUITY AND
LIABILITIES 34 165 58 481 -41.6 34 752
CONSOLIDATED CHANGES IN
EQUITY,
JANUARY-MARCH
Funds
for
in-
vest-
ments Trans-
Spe- of lation
Share cial non- Trea- dif- Ret- Mino-
Share pre- re- rest- sury fer- ained rity Total
capi- mium serve ricted sha- en- earn- inte- equi-
tal fund fund equity res ces ings rests ty
Balance
at
-110
31.12.08 20 082 27 918 45 989 23 885 -758 -1 203 970 694 5 636
Compre-
hensive
income
for the
period -4 -452 2 -454
Balance
at
-111
31.3.09 20 082 27 918 45 989 23 885 -758 -1 207 422 696 5 182
Funds
for
in-
vest-
ments Trans-
Spe- of lation
Share cial non- Trea- dif- Ret- Mino-
Share pre- re- rest- sury fer- ained rity Total
capi- mium serve ricted sha- en- earn- inte- equi-
tal fund fund equity res ces ings rests ty
Balance
at
-111
31.12.07 20 082 27 918 45 989 23 885 -758 -884 536 742 5 438
Compre-
hensive
income
for the
-1
period -939 -526 85 380
Balance
at
-112
31.3.08 20 082 27 918 45 989 23 885 -758 -1 823 062 827 4 058
CONSILIDATED CASH FLOW STATEMENT, 1-3/09 1-3/08 1-12/08
JANUARY-MARCH KEUR KEUR KEUR
Profit for the period -450 -526 71
Adjustments 319 518 -264
Change in working capital 807 307 -1 522
Received interest income and dividends 15 271 302
Paid interest expenses -11 -18 -761
Paid taxes -1 0 -2
Operational cash flow 680 562 -2 175
Investments -128 -282 -1 443
Proceeds from sale of property, plant and
equipment 49 6 350 8 420
Cash flow from investments -79 6 068 6 977
Share issue 0 0 0
Decrease in financing -91 -6 350 -8 919
Increase in financing 0 0 0
Cash flow from financing -91 -6 350 -8 919
Change in cash and cash equivalents 510 270 -4 118
Cash and cash equivalents
at the beginning of period 4 255 8 373 8 373
Currency exchange differences 0 0 0
Cash and cash equivalents
at the end of period 4 765 8 643 4 255
KEY FINANCIAL INDICATORS 3/09 3/08
Equity per share, EUR 0.09 0.07
Equity ratio, % 15.2 6.9
Gearing, % 350.3 746.9
Earnings per share from
continuing operations
Basic and diluted earnings
per share -0.01 -0.01
Earnings per share from
discontinued operations
Basic and diluted earnings
per share 0.00 0.00
CONTINGENT LIABILITIES 3/09 3/08 12/08
KEUR KEUR KEUR
Mortages given for
security for liabilities 15 400 25 400 15 400
Operating lease liabilities 100 100 100
Other liabilities 100 400 100
Total 15 600 25 900 15 600
Mortgages as collateral for debt have declined due to the divestment
of the Thai subsidiary. With regards to other commitments, the
customs bonds of the parent company have been discontinued, as they
are no longer necessary.
FORMULAS FOR CALCULATION OF KEY FIGURES
Equity/share, EUR = Equity attributable to shareholders
_____________________________________
Number of shares at the end of period
Equity ratio, % = Total equity
_______________________________________ x
100
Balance sheet total - advances received
Gearing, % = Net interest-bearing liabilities
________________________________ x 100
Total equity
Earnings per share
(EPS), EUR = Profit attributable to equity shareholders
__________________________________________
Adjusted weighted average number of shares
outstanding
All figures are unaudited.
Espoo, May 14, 2009
ASPOCOMP GROUP OYJ
Board of Directors
Isto Hantila
President and CEO
For further information, please contact Isto Hantila, CEO,
tel. +358 50 406 0656.
Aspocomp: Innovative interconnection solutions for the electronics
industry
The Aspocomp Group offers and develops innovative interconnection
solutions for the electronics industry in close cooperation with its
customers. We are strongly positioned as a supplier of data
communications equipments and industry. We offer our global customers
a fast road to mass production through flexible and cost-effective
adaptation of new technologies.
The Aspocomp Group's production facility is located in Oulu, Finland.
In 2008, the Group's net sales stood at about EUR 21 million and it
had about 115 employees at the end of December, 2008.
Distribution:
NASDAQ OMX Helsinki
Major media
www.aspocomp.com
Some statements in this stock exchange release are forecasts and
actual results may differ materially from those stated. Statements in
this stock exchange release relating to matters that are not
historical facts are forecasts. All forecasts involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results, performances or achievements of the Aspocomp Group to
be materially different from any future results, performances or
achievements expressed or implied by such forecasts. Such factors
include general economic and business conditions, fluctuations in
currency exchange rates, increases and changes in PCB industry
capacity and competition, and the ability of the company to implement
its investment program.
