Copenhagen, Denmark, 2011-11-25 16:29 CET (GLOBE NEWSWIRE) --
Summary
- As expected, Danionics reported a loss for the third quarter of DKK 0.3 million.
- The company reiterates its full-year forecast of a loss of DKK 3 million before recognition of the share of the profit/loss or value adjustment in Danionics Asia.
- The situation in the joint venture developed negative.
Management’s report
Financial performance in the third quarter of 2011
As expected, Danionics reported a loss for the third quarter of DKK 0.3 million. The loan capital to Danionics Asia was not written down in the period because no expense was incurred on behalf of Danionics Asia in the third quarter of 2011. Apart from the writedown in 2010, the third quarter financial performance was approximately DKK 0.3 million better than in the same period last year. The improvement was attributable to lower administrative expenses.
The loan capital to Danionics Asia was recognised in the amount of DKK 0 at 30 September 2011, which is unchanged compared to the third quarter of 2010.
Cash amounted to DKK 4.3 million. Equity amounted to DKK 4 million at the end of the third quarter, up from DKK 2 million at 31 December 2010. The change in equity corresponds to the loss for the period with the addition of the capital increase carried out in the second quarter.
The joint venture
The development in the business during 3rd quarter was negative. The sole supplier status to the largest customer was unfortunately lost, as they entered into agreement with a second supplier. A new large customer delayed taking delivery of batteries ordered and produced because a wire was too long. The attempts to sell large batteries so far also failed, as the market favored products for Apple and Samsung rather than those from Danionics potential customers in Taiwan.
Because of continued cost cutting and increased sales in July, August and September the losses in the third quarter were halved compared to the quarter before.
Sales in October collapsed to only 35.000 batteries and the orders so far received for the rest of the year are the lowest ever. This is not only the situation in Danionics, but the whole industry is feeling the effect of lower sales and built-up of stocks due to the general economy situation.
Danionics joint venture partner has approached Danionics A/S suggesting that a major strategic review of the future of the joint venture is made, studying also ways of reconstructing the business.
Outlook for 2011
Danionics retains the forecast for 2011 presented in the annual report for 2010 released on 9 March 2011. The financial results for 2011 will be impacted by marketing and sales costs related to the joint venture and administrative expenses of approximately DKK 3 million. Overall, Danionics therefore expects an overall loss in the region of DKK 3 million after interest income but before recognition of the share of the profit/loss or value adjustment in Danionics Asia Ltd.
Moreover, the company may continue to generate sales revenue should the sales efforts undertaken by Danionics A/S result in the inflow of new orders.
For additional information, please contact:
Henning O. Jensen, Chief Executive Officer, tel. +45 88 91 98 70
