Evox Rifa Group Oyj Stock Exchange Release on 6 August 2007
* Net sales of the first half of 2007 were EUR 46.5 million (EUR
43.9 million in 2006). Net sales increased by 5.9 % compared to
the previous year.
* Operating profit was EUR 0.1 million (EUR 0.2 million). Operating
profit includes EUR 1.5 million of costs related to the public
tender offer made by KEMET Electronics Corporation ("KEMET")for
Evox Rifa Group Oyj's shares and to the organization
restructuring that followed (restructuring costs in the
corresponding period in 2006 were EUR 0.6 million and profits of
the sale of real estate were EUR 1.2 million).
* Loss before taxes was EUR 0.9 million (loss EUR 1.0 million).
* Loss per share was EUR -0.009 (EUR -0.008).
* Order backlog on 30 June 2007 was EUR 20 million (EUR 23.5
million).
ECONOMIC DEVELOPMENT
Net Sales
Net sales of the Group totalled EUR 46.5 million (EUR 43.9 million in
2006).
In the first half of 2007, demand remained at a satisfactory level,
but price competition was challenging in all market areas.
Profit
Operating profit of the Group was EUR 0.1 million (EUR 0.2 million)
and loss before taxes was EUR 0.9 million (loss EUR 1.0 million). The
operating profit was reduced by a EUR 0.4 million customer
reclamation payment. The operating profit also includes EUR 1.5
million of costs related to the public tender offer made by KEMET for
Evox Rifa Group Oyj's shares and to the organization restructuring
that followed. In the corresponding period last year, the costs
related to restructuring were EUR 0.6 million and profits of the sale
of real estate were EUR 1.2 million.
Loss per share were EUR -0.009 (EUR -0.008) and shareholders' equity
per share was EUR 0.025 (EUR 0.032).
Order backlog
The order backlog of the Group was EUR 20 million at the end of June
2007 (EUR 23.5 million at the end of the corresponding period in
2006).
FINANCIAL STATUS AND CAPITAL EXPENDITURE
Liquid assets of the Group were EUR 3.1 million (EUR 0.8 million) and
the equity ratio was 9.2% (11.5%) at the end of June. If the
convertible capital loan is counted as shareholders' equity, the
equity ratio was 19.9% (21.5%).
During the second quarter, long-term bank loans of EUR 4.5 million
and short- term credit lines of EUR 4.2 million were paid back. The
repayments of borrowings and the need for working capital were
financed by taking loans of total EUR 13.2 million from the immediate
parent company, KEMET Electronics Corporation.
Gross capital expenditure was EUR 0.9 million (EUR 0.4 million).
SHARES AND SHARE CAPITAL
The number of shares of Evox Rifa Group Oyj was 178 156 018 on 30
June 2007 and the share capital was EUR 8 908 400,90.
Evox Rifa is a subsidiary of KEMET Electronics, a US corporation.
REDEMPTION OF EVOX RIFA'S MINORITY SHARES
On 9 March 2007 KEMET Electronics Corporation announced a voluntary
public tender offer for all shares and convertible capital loan notes
in Evox Rifa Group Oyj. The acceptance period under the tender offer
expired on 12 April 2007. KEMET has, pursuant to the tender offer,
acquired title to more than nine-tenths of all the shares and votes
in Evox Rifa. Accordingly, KEMET has a right to redeem all the
minority shares in Evox Rifa in accordance with Chapter 18, Section 1
of the Companies Act. KEMET owns 92.7% of Evox Rifa Group Oyj's
shares and 95.7% of the convertible capital loan notes.
KEMET has in its application dated 25 April 2007, requested the
Redemption Committee of the Central Chamber of Commerce to appoint an
Arbitral Tribunal and to commence arbitral proceedings in the
redemption matter. The redemption right has been entered into the
Trade Register on 2 May 2007. The District Court of Helsinki has with
its decision dated 23 May 2007 ordered Rabbe Nevalainen, Chartered
Accountant, to act as trustee in the matter. The order has been
entered into the Trade Register on 5 June 2007. Olli Iirola,
attorney-at-law, was appointed arbitrator in the meeting of the
Redemption Committee of the Central Chamber of Commerce held on 27
June 2007. An arbitral award in the matter is expected to be rendered
in the course of the autumn of 2007.
THE CONVERTIBLE CAPITAL LOAN
The Board of Directors of Evox Rifa Group Oyj resolved on 5 June
2007, in accordance with the terms and conditions of the convertible
capital loan issued by the Company on 28 February 2005, to change the
conversion period for the loan notes issued under the convertible
capital loan so as to expire on 30 June 2007.
By the expiry of the conversion period, loan note holders, who in the
aggregate hold 2 019 loan notes with a nominal value of EUR 100 each,
have notified Evox Rifa of their decision to convert the loan notes
into shares in accordance with the terms and conditions of the
convertible capital loan. Pursuant to the conversion notices the
Board of Directors of Evox Rifa has on 5 July 2007, resolved to
approve the subscription of 1 514 250 new shares by virtue of the
loan notes at a conversion rate of EUR 0.1333 per share. As a result
of the share subscriptions the share capital of Evox Rifa has been
increased by EUR 75 712.50. After the increase the share capital of
Evox Rifa amounts to EUR 8 984 113.40 and the total amount of issued
shares is 179 670 268 shares.
The increase in the share capital was entered into the Trade Register
on 17 July 2007, and the new shares were admitted to public trading
together with the Company's existing shares on 18 July 2007.
As the conversion period for the convertible capital loan notes has
expired, the initially recognized amounts from loan amount to equity
and deferred tax liabilities under the IFRS have been reversed,
therefore an amount of EUR 201 900 equaling the above described note
conversions remains in retained earnings. Accordingly the loan
amount, EUR 5 386 900, in the balance sheet is equal to the amount of
outstanding loan notes.
PERSONNEL
The average number of personnel in Evox Rifa Group was 1346 during
the first half of 2007 (1360 in the same period in 2006).
BUSINESS DEVELOPMENT
Net sales of the electrolytic capacitors product group were EUR 26.3
million in the first half of 2007 (EUR 23.6 million in 2006).
Profitability of the product group continued at a good level.
Net sales of the film capacitors product group were EUR 20.2 million
(EUR 20.3 million in 2006). Profitability of the product group was
still at an unsatisfactory level.
MATERIAL RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The capacitor industry market has become increasingly global, which
has eliminated geographical market differences. A visible impact of
this has been the harmonization of prices and logistics requirements.
Major customers tend to concentrate their purchases with fewer
suppliers, keeping just one or two suppliers instead of three or
four. Half a dozen global suppliers dominate competition in certain
product areas.
Evox Rifa Group's customers compete in areas in which technologies
change rapidly and products have a short life cycle. Product
development is exceptionally fast in the telecommunications market,
as new technologies weaken the competitiveness of existing
technologies or render them obsolete. The Group continuously
evaluates benefits and profitability of new production processes and
technologies.
Evox Rifa Group has received product reclamations that are still
being processed. The Group's management believes that the provisions
contained in the consolidated balance sheet are sufficient to cover
potential currently known compensation risks.
OUTLOOK FOR THE YEAR 2007
KEMET Electronics Corporation, the majority owner of Evox Rifa Group
Oyj, has announced its intention to integrate the business of Evox
Rifa Group into KEMET's global organization of business units and
sales region units. The planning and implementation of such activites
are ongoing.
During the course of completing the compulsory redemption proceedings
under the Companies Act, the company's shares will be delisted from
the Helsinki Stock Exchange.
This Financial Report is in compliance with the requirements of IAS
34 as adopted by the EU. The figures in this Financial Report are
unaudited.
In Espoo on 6 August 2007
EVOX RIFA GROUP OYJ
Board of Directors
For further information please contact: Evox Rifa Group Oyj, Juhani
Pöhö, Chief Financial Officer, tel. +358 9 5406 5011
DISTRIBUTION:
Helsinki Stock Exchange, Main Media
INCOME STATEMENT OF EVOX RIFA GROUP
1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6.07 30.6.06 30.6.07 30.6.06 31.12.06
1000 EUR 1000 EUR 1000 EUR 1000 EUR 1000 EUR
NET SALES 22 884 22 301 46 462 43 936 89 787
Operating expenses -22 292 -20 930 -45 046 -42 414 -85 220
Depreciation and
amortisation -659 -699 -1 332 -1 356 -2 702
expenses
OPERATING PROFIT
(LOSS) -67 672 84 166 1 865
Financial income
and expenses -610 -675 -988 -1 177 -2 090
LOSS BEFORE TAXES -677 -3 -904 -1 011 -225
Income Taxes -286 -253 -672 -416 -716
NET LOSS FOR THE
PERIOD -963 -256 -1 576 -1 427 -941
Attributable to:
Shareholders
of -980 -264 -1 605 -1 416 -948
the parent 17 8 29 -11 7
Minority -963 -256 -1 576 -1 427 -941
interest
Loss per share
(EUR) -0.006 -0.001 -0.009 -0.008 -0.005
Loss per share
(EUR),diluted -0.006 -0.001 -0.009 -0.008 -0.005
BALANCE SHEET OF EVOX RIFA GROUP
30.6.07 30.6.06 31.12.06
ASSETS 1000 EUR 1000 EUR 1000 EUR
NON-CURRENT ASSETS
Property, plant and equipment 11 967 13 461 12 821
Intangible assets 1 403 1 266 1 266
Other receivables 247 332 285
CURRENT ASSETS
Inventories 16 488 16 368 16 615
Trade and other receivables 17 024 18 289 17 109
Cash and cash equivalents 3 092 831 1 313
TOTAL ASSETS 50 221 50 547 49 409
EQUITY AND LIABILITIES
Share capital 8 909 8 905 8 909
Other restricted equity 2 611 2 612 2 611
Retained earnings -7 085 -5 844 -5 276
Minority interest 162 116 133
TOTAL EQUITY 4 597 5 789 6 377
LIABILITIES
Deferred tax liabilities 390 709 515
Convertible capital loan 5 386 5 073 5 125
Pension obligations 1 729 2 269 1 904
Non-current liabilities 3 629 8 775 7 557
Current liabilities 34 490 27 932 27 931
TOTAL EQUITY AND LIABILITIES 50 221 50 547 49 409
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1.1. - 30.6.2007
Share Other Transl. Retained Minority Total
capital reserves difference earnings interest
Shareholders'
equity on
31.12.2006 8 909 2 611 -1 589 -3 687 133 6 377
Movements:
Translation -112
difference -112
Loss/profit
for the
period -1 605 29 -1 576
Capital loan
reversal -92 -92
Shareholders'
equity on
30.6.2007 8 909 2 611 -1 701 -5 384 162 4 597
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1.1. - 30.6.2006
Share Other Transl. Retained Minority Total capital reserves difference earnings interest
Shareholders'
equity on
31.12.2005 8 861 2 603 -1 481 -2 739 142 7 386
Movements:
Used
option rights 44 9 53
Translation
difference -208 -15 -223
Loss for the
period -1 416 -11 -1 427
Shareholders'
equity on
30.6.2006 8 905 2 612 -1 689 -4 155 116 5 789
EVOX RIFA GROUP CASH FLOW STATEMENT
1.1.- 1.1.- 1.1.-
30.6.07 30.6.06 31.12.06
1000 EUR 1000 EUR 1000 EUR
Net cash flow from operating activities -611 -4 117 -1 765
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and
equipment* -618 -159 -738
Acquisition of intangible assets -145 -10 -16
Proceeds from sale of property, plant and
equipment 51 5 927 5 952
Net cash from investing activities -712 5 758 5 198
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 13 695 458 658
Repayment of borrowings -5 599 -3 470 -5 169
Payment of finance lease liabilities -65 -77 -141
Proceeds from the issue of shares 53 56
Net cash from financing activities 8 031 -3 036 -4 595
Net change in cash and cash equivalents 6 708 -1 395 -1 163
Cash and cash equivalents at the beginning
of the period -5 183 -3 883 -3 883
Translation difference 164 17 137
Cash and cash equivalents at the end of
the period 1 689 -5 295 -5 183
Cash and cash equivalents:
Cash in bank and in hand 3 092 831 1 313
Bank overdrafts -1 403 -6 126 -6 496
Total 1 689 -5 295 -5 183
* New investment grant of 151 thousand euros has been deducted
(Q2/2006 and in 2006 260 thousand euros).
The figures in the Group cash flow statement cannot be directly
traced from the balance sheet due to translation differences and
elimination of non-cash items.
EVOX RIFA GROUP KEY FIGURES
30.6.07 30.6.06 31.12.06
Return on equity %, ROE -57.4 % -43.3 % -13.7 %
Return on investment %, ROI 0.6 % 1.0 % 5.6 %
Equity ratio % 9.2 % 11.5 % 12.9 %
Equity ratio %*) 19.9 % 21.5 % 23.3 %
Gross investments in
fixed assets, TEUR 914 429 1 021
% of net sales 2.0 % 1.0 % 1.1 %
Loss per share (EUR) -0.009 -0.008 -0.005
Equity of parent shareholders/ share (EUR)
0.025 0.032 0.036
Order backlog, (MEUR) 20.0 23.5 23.2
Average number of personnel 1 346 1 360 1 391
*) The convertible capital loan is included in the shareholders'
equity.
NOTES TO THE INTERIM REPORT
1. Basis of preparation
The interim report has been prepared in accordance with International
Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted
by the EU. The interim report should be read in conjunction with the
annual financial statements for the year ended 31 December 2006.
2. Accounting policies
The accounting policies adopted are consistent with those of the
Group's annual financial statements for the year ended 31 December
2006, except for changes listed below.
The following new standards, amendments to standards and
interpretations have been adopted as of 1 January 2007:
IFRS 7 Financial Instruments: Disclosures (effective from 1 January
2007). IFRS 7 requires disclosures about the significance of
financial instruments for an entity's financial position and
performance as well as qualitative and quantitative disclosures on
the nature and extent of risks. The new standard will increase the
disclosure requirements, the main additional disclosures will be the
sensitivity analyses.
Amendment to IAS 1 Presentation of Financial Statements: Capital
Disclosures (effective from 1 January 2007). This is a complementary
amendment due to issuance of IFRS 7 and introduces new disclosures
about the level of an entity's capital and how it manages capital.
IFRIC 9 Reassessment of Embedded Derivatives (effective for annual
periods beginning on or after 1 June 2006). The interpretation
requires that a reassessment of whether embedded derivative should be
separated from the underlying host contract should be made only when
there are changes to the contract. Evox Rifa does not expect the
adoption of IFRIC 9 will have a material impact on the Group's
financial statements.
IFRIC 10 Interim Financial Reporting and Impairment (effective for
annual periods beginning on or after 1 November, 2006). IFRIC 10
prohibits the reversal of an impairment loss recognised in a previous
interim period in respect of goodwill, an investment in an equity
instrument or a financial asset carried at cost. The interpretation
is not expected to have any impact on the Group's accounts.
IFRS 8 Operating Segments (effective for annual periods beginning on
or after 1 January 2009). IFRS 8 replaces IAS 14 Segment Reporting.
It adopts a management approach to segment reporting. The information
reported would be that which is used internally by management for
evaluating the performance of operating segments and allocating
resources. Also additional disclosures are required. The Group is
currently assessing the impact of IFRS 8.
These newly adopted standards and interpretations have not had any
effect on the income statement, balance sheet or disclosures in this
interim report.
IFRIC 8 Scope of IFRS 2 is not relevant to the Group's operations.
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions and IFRIC 12
Service Concession Arrangements are not relevant to the Group's
operations.
3. Critical accounting estimates and judgements
The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities, income and expenses.
Annual results may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same
as those that applied to the annual financial statements as at and
for the year ended 31 December 2006.
4. Business segment information
Capacitors Others
Total
II/07 II/06
II/07 II/06 II/07 II/06
Net 22 884 22 301
0 0 22 884
22 301
sales
Operating 919 840
-986 -168 -67 672
result
Capacitors Others
Total
I+II/07 I+II/06
I+II/07 I+II/06 I+II/07 I+II/06
Net 46 462 43 936
0 0 46 462 43 936
sales
Operating 1 912 -244 -1
828 410 84 166
result
5. Financial risk management
The Group has not made any significant changes in policies regarding
risk management during the period. Aspects of the Group's financial
risk management objectives and policies are consistent with that
disclosed in the consolidated financial statements as at and for the
year ended 31 December 2006.
6. Acquisitions and disposals
No acquisitions or disposals have been made during 2007.
7. Commitments and contingencies
There are no essential changes in the Group's commitments and
contingencies after the end of 2006.
EVOX RIFA GROUP INTERIM REPORT 1 JANUARY - 30 JUNE 2007
| Source: Evox Rifa Group
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