Cencorp Corporation Interim Report 14 May 2014 at 15.15 Finnish time
CENCORP CORPORATION, INTERIM REPORT JANUARY - MARCH 2014
The net sales of Cencorp Corporation (“Cencorp”) for the reporting period January – March 2014 was EUR 2.4 million (EUR 2.5 million in 2013). The operating profit of continuing operations was EUR -1.7 million (-0.7), profit for the period EUR -2.1 million (-0.7), earnings per share were EUR -0.003 (-0.001) and EBITDA was EUR -1.2 million (-0.2).
Major part of the operating loss (EUR 0.8 million) is created at the Beijing manufacturing plant, part of the Cencorp Clean Energy segment. Production volumes of mobile phone components have decreased continuously and were clearly at too low level during the first quarter of the year. At the Beijing factory the company is, as soon as possible, trying to close production of all products excluding the Conductive Back Sheets (CBS).
OVERVIEW
Cencorp belongs to the Finnish Savcor Group Corporation (“Savcor”). Savcor Group companies owned approximately 60.8 percent of the Cencorp shares on 31 March 2014.
More information on principle activities and events during the reporting period can be found in the stock exchange releases published on Cencorp’s website at www.cencorp.com.
The Interim Report has been drawn up in compliance with the IAS 34 Interim Financial Reporting standard. In the Interim Report Cencorp has applied the same accounting principles as in the Annual Report 2013. The Interim Report has not been audited.
FINANCIAL DEVELOPMENT
Cencorp reports on the results of three business segments. The segments are Laser and Automation Applications (LAS), Life Cycle Management (LCM) and Cencorp Clean Energy (CCE). CCE also includes the former Special Components segment. Cencorp’s segment information is based on the management’s internal reporting and on the organisation structure of the company.
The figures in brackets are comparison figures for the corresponding period in 2013, unless stated otherwise. Since the shutdown of the factory in Guangzhou, China, and the exit from decoration business Cencorp reports on corresponding figures in the discontinued operations in the comparison figures for 2013.
January - March 2014
- Cencorp Group’s net sales decreased by 2.2 percent to EUR 2.4 million (EUR 2.5 million).
- EBITDA was EUR -1.2 million (EUR -0.2 million).
- Operating profit was EUR -1.7 million (EUR -0.7 million).
- The Group’s profit before taxes was EUR -2.1 million (EUR -0.7 million).
- Profit for the period was EUR -2.1 million (EUR -0.7 million).
- Earnings per share were EUR -0.003 (EUR -0.001) and diluted earnings per share EUR -0.003 (EUR -0.001).
- Net sales of the Laser and Automation Applications segment (LAS) increased by 39.8 percent to EUR 1.1 million (EUR 0.8 million) and operating profit was EUR -0.5 million (EUR -0.6 million). The segment’s EBITDA was EUR -0.4 million (EUR -0.4 million).
- Net sales of the Life Cycle Management segment (LCM) decreased by 9.8 percent to EUR 0.8 million (EUR 0.9 million) and operating profit was EUR 0.03 million (EUR 0.1 million). The segment’s EBITDA was EUR 0.1 million (EUR 0.1 million).
- Net sales of the Cencorp Clean Energy segment (CCE) decreased by 35.2 percent to EUR 0.6 million (EUR 0.9 million) due to reduction in antenna production at the Beijing factory and operating profit was EUR -1.2 million (EUR -0.2 million). The segment’s EBITDA was EUR -0.8 million (EUR 0.1 million).
MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW
In the near future, Cencorp’s success will depend on the development of the Cencorp Clean Energy segment and on Photovoltaic (PV) related business, in particular. There are high expectations for this business. Cencorp is having several negotiations on delivering whole solar module plants or production lines to partners interested in the company’s production technology. The negotiations are still going on. The company continues to streamline its traditional laser and automation business (LAS and LCM) to improve profitability and enable restructuring.
During the first quarter of the fiscal year the company carried out a successful share issue which secured the financing for implementing the first phase of the business plan as planned. Cencorp has started to review financing options to carry out the next phase of the business plan. Further, the company continued developing its operations to be able to utilize more and more mass customizing in the deliveries of automation solutions in the future. During the first quarter Cencorp also reviewed its operations thoroughly, based on which the operations will be restructured to improve profitability.
The Cencorp product family for customers operating in the automation business has just been renewed and there are no immediate needs for developing new equipment. Thus, the company focuses the major part of its research and development investments on the clean energy solutions and on the solutions increasing the profitability of the automation product family business.
Risks are handled in more detail in the item “Risk management, risks and uncertainties” of this Interim Report.
REVIEW BY SEGMENTS
The net sales for the reporting period January - March decreased by 2.2 percent to EUR 2.4 million compared to the corresponding period in 2013. The EBITDA decreased to EUR -1.2 million from the previous year’s EUR -0.2 million.
CENCORP CLEAN ENERGY (CCE)
In the CCE segment deliveries of the mobile phone components continued to decrease. The delivery volumes were clearly below the break-even point. As Cencorp has previously announced the production of the mobile phone components is no longer part of the company’s core business. Cencorp is reviewing its options to exit the production of these components as soon as possible and at the end of the reporting period the company commenced effective actions to review options for the exit. At the beginning of the second quarter almost all of the production of unprofitable products were closed down at the Beijing factory.
Test deliveries of Cencorp’s Conductive Back Sheets (CBS) for solar modules, produced at the Beijing factory, were continuing for Chinese module manufacturers. However, the CBS business did not yet generate any remarkable net sales during the reporting period.
The Cencorp Clean Energy segment is the key factor of the company’s growth strategy and the company continued investing in it according to the company’s strategy. During the reporting period the gross investments in the Cencorp Clean Energy totaled EUR 0.1 million as the other investments amounted to EUR 0.05 million. The company expects to generate remarkable net sales from the new business in the financial year 2014.
In the first quarter of the year Cencorp signed a significant Term Sheet with Vikram Solar that is one of the biggest module manufacturers in India. This agreement got a lot of attention in the global business journals.
During the reporting period Cencorp has signed several minor contracts on delivering solar modules. Additionally Cencorp is negotiating on delivering whole solar module plants or production lines to partners interested in Cencorp’s production technology. The negotiations are still going on. The value of the contracts Cencorp is negotiating on varies from ca. four million Euros to ca. 20 million Euros.
LASER AND AUTOMATION SOLUTIONS SEGMENT (LAS)
The renewal of Cencorp’s automation product families launched in the last quarter of 2013 introduced totally new and significantly improved depaneling solutions and odd-form assembly for special components in the market. The new products were brought into the market at the end of 2013. With the new products Cencorp’s LAS business segment started the fiscal year with order backlog amounting close to a new record, EUR 2.7 million. However, the sales have not been as good since then at the beginning of the year. This is partially due to fluctuation in demand which is typical of the industry. Another reason is that many of the Cencorp customers interested in the new odd-form assembly solution are waiting for the first reference delivery that will be launched in May 2014. The new odd-form assembly solution will replace the robots of the Cencorp HiSac product line that are coming to the end of their economic life. There are still hundreds of these robots being used by Cencorp’s customers and according to the company’s view major part of the robots will be replaced over the next five years.
LIFE CYCLE MANAGEMENT (LCM)
The net sales of the LCM segment decreased but the EBITDA stayed positive. In the next few months the company will focus on improving the business of the LCM segment, in particular. Cencorp has a wide global customer base which gives the company very good opportunities to offer its customers extra services. Cencorp’s automation solutions are known to be reliable as well as for their extremely long economic lifetime. The life time of Cencorp’s production equipment is clearly longer than the lifetime of software and electronics components used in them in general, thanks to the equipment’s strong structure. This makes refurbishment of equipment economically reasonable. Cencorp’s customers have an opportunity to refurbish their equipment and to extend the lifetime of their equipment with low cost and thus decrease the cost per processed product and component remarkably. Cencorp believes that the future growth in the LCM business segment will be based on the sales of these refurbishment and modernization services in particular. The company will restructure its operations to finally start the targeted growth in the LCM segment.
OPERATING ENVIRONMENT
Cencorp operates in industries applying electronics and clean energy technology.
Cencorp’s operating environment is global. The company’s traditional customers in the electronics industry as well as new customers operating in the clean energy business are companies that provide products and services worldwide. 97.1 percent of Cencorp’s automation products and services are either exported from Finland or they are manufactured by Cencorp in the US and in China.
MARKET OUTLOOK
In Cencorp’s LAS segment the short and middle-term outlook is reasonable. Even though the net sales in the first quarter did not reach the level of the net sales of the last quarter the amount of Cencorp’s quotations has stayed at a reasonable level as Cencorp’s customers are evaluating the company’s new products introduced in the market at the end of last year.
The new industrial automation solutions Cencorp brought in the market in the last quarter of 2013 give the company’s long-term customers a good opportunity to bring up to date the automation applications bought at the beginning of the 21st century. After an upgrade they meet the latest technological requirements. There are still hundreds of these automation applications in the market that are coming to the end of their life cycle. The high quality and long economical life time of Cencorp’s automation applications have created reasonable large and loyal customer base for Cencorp. The company believes it will renew major part of these applications within the next five years. Thus, the LAS segment’s future growth will be driven by maximizing the potential of refurbishment of the automation solutions that are coming to the end of their lifetime.
Even though the LCM segment’s operation has been profitable it has not yet succeeded to meet the growth and profitability targets. In this LCM business segment Cencorp will focus on fast development of operations in the near future. The company will pay special attention to increasing the volume of the business and to focusing more resources on the growth of the LCM sales, especially, for improvement of its profitability.
Cencorp has its biggest growth expectations in the CCE segment. Cencorp’s key products and services have been designed for the photovoltaic market. Cencorp has its own “recipes” for module manufacturing including detailed material selection and process parameters. With its module manufacturing recipes and automated production Cencorp is able to manufacture modern next generation solar modules based on conductive back sheet.
In the market, general attitude to the solar energy investments improved clearly at the end of 2013. The same trend has continued in the first quarter of 2014. Many solar module manufacturers with solid market position have started to plan investment in capacity, partly to increase the amount of their production capacity and partly to replace old production capacity for old H-pattern solar modules. Vikram Solar, India’s leading solar module manufacturer, is one of these manufacturers. On 7 February 2014 Cencorp published the signing of a Term Sheet with Vikram Solar on reviewing business and partnership opportunities. During the reporting period Cencorp and Vikram Solar have continued negotiations and reviewed business opportunities as agreed upon in the Term Sheet.
Many new local operators are entering the industry as well. Their interest in the latest production automation and Cencorp’s module manufacturing recipes is increasing. Cencorp is actively negotiating with this kind of new operators on technology transfer agreements. Cencorp and its offering are very well prepared to meet the demand. According to the information available to the company at the moment there is no other provider for a full-scale offering with turnkey delivery.
The first phase of Cencorp’ pilot production line for solar modules has been started in Mikkeli. The first commercial sample modules have been delivered to partners. Further, Cencorp has started to offer turnkey solar plants with Cencorp’s own modules at first mainly in Finland. The company trusts it will sign delivery contacts for solar plants this year. The values of the contracts currently under negotiations vary from tens of thousands of Euros to approximately 1.5 million Euros depending on the scope.
However, Cencorp emphasizes that the focus of the company’s future strategy is in delivering production technology to the global markets. In the near future the developing markets will be among the most interesting market areas for the company. The company is having negotiations on technology transfer to India, Japan, China, Dominican Republic and to several African countries.
For about two years Cencorp has been developing fully automated production technology for CBS modules. The technology has been introduced to almost all of the most significant solar module manufacturers. Innovations relating to the technology have been protected by applying several patents. There is only a limited amount of competitors in the market and the customer feedback on Cencorp’s production technology has been positive. Cencorp’s production technology has special features: production lines have high level of automation, they are easy to use and require only little space. Start-up cost for setting up solar module production from zero amounts approximately to EUR 6 – 15 million depending on the existing level of the infrastructure and required capacity.
Cencorp’s Clean Energy strategy, if realized, will remarkably change the company’s cost structure and the targets set for the near future. Cencorp cannot assess how the change in company’s business focus will impact to the company as the transition period is still going on. Due to this the company has decided not to give any financial guidance for the time being, as stated in the release of 21 August 2012. As the transition period is still continuing Cencorp does not give any financial guidance for the 2014, either.
Cencorp’s future outlook will be highly dependent on the company’s ability to reach the targeted market position in the global photovoltaic module market as well as on the company’s long-term and short-term financing. However, should the company fail to arrange financing, it is possible that the company will not be able to realize its assets and repay its liabilities within usual business operations to a sufficient extent or quickly enough. Risks are handled in more detail in the item “Risk management, risks and uncertainties of this Interim Report”.
LONG-TERM OBJECTIVES FOR MANAGING DIRECTOR
On 21 August 2012 Cencorp’s Board of Directors published its long-term financial and other objectives for Managing Director as follows:
- Thorough but fast transition from a company manufacturing only production automation systems and special components into a company that develops and provides Cleantech applications using laser and automation technology. The company’s objective is to have a strong market position, in various market areas, as a provider, of locally produced, high-quality photovoltaic modules and, particularly, of solar module plants.
- Cencorp’s goal is to increase its shareholder value with growth and profitability. Cencorp aims for growth in Cleantech business where the company has good possibilities to achieve a strong global position and fast growth.
- Laser and Automation Applications segment has its main focus on the Life Cycle Management of systems and equipment with growth expectations for service business.
- In the long run Cencorp is aiming for remarkable growth in its net sales with net sales target of more than EUR 200 million for 2016, with growth coming mainly from Cleantech operations, especially from solar photovoltaic and fuel cell applications, provided the company has sufficient capital.
Cencorp has thoroughly reviewed its possibilities to achieve the net sales target of EUR 200 million by the end of 2016 set for the Managing Director. According to the Managing Director the target is very challenging but he trusts it can be achieved if Cencorp succeeds to sign a contract for delivering at least one normal sized solar module plant during the fiscal year 2014 and three other in 2015, and if Cencorp’s partners commit themselves to Cencorp’s module manufacturing recipes and components.
The long-term objectives set for the Managing Director involve also risks and the long-term objectives should not be considered as the company’s financial guidance. Even though the objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the Managing Director reaches all or part of the targets set for him. If Cencorp’s strategy change is delayed, the risk of the Managing Director reaching the objectives set for him in the stated timetable will increase. If Cencorp does not succeed to sign a contract for delivering at least one normal sized solar module plant during the fiscal year 2014, the company has to re-evaluate the objectives set for the Managing Director and their timetable in the second half of 2014.
FINANCING
Cash flow from business operations before investments in January – March was EUR -2.0 million (EUR 0.2 million). Trade receivables at the end of the reporting period were EUR 1.2 million (EUR 1.8 million). Net financial items amounted to EUR 0.4 million (EUR -0.01 million).
At the end of March, the equity ratio was 7.1 percent (22.9 %) and equity per share was EUR 0.002 (EUR 0.01). The equity ratio including capital loans was 23.4 percent (35.3 %). At the end of the reporting period, the Group’s liquid assets totaled EUR 0.3 million (EUR 0.4 million) unused export credit limits, bank guarantee limits and factoring loans amounted to EUR 0.5 million (EUR 1.3 million).
As previously announced, Cencorp’s financing position has been tight and it involves risks. As the investments are still continuing and the company is preparing for significant increase in its net sales, working capital is probably to be tight until the operations turn into profit in terms of EBITDA. However, the company will have a deficit in its working capital at least until the first delivery of production technology for solar modules will start to generate cash flow.
Based on an authorisation given to Cencorp’s Board of Directors on 4 December 2013 by the extraordinary general meeting, the Board of Directors resolved on 9 December 2013 on a share issue to the shareholders of the company and to the holders of the convertible bonds of I/2010, I/2012 and I/2013 with maximum number of 508,151,045 new shares to be issued. The subscription period ended on 24 January 2014.
According to the result of the Share Issue, the total amount of subscriptions was 627.064.325 shares, which represented 123 percent of the 508.151.045 shares offered in the Share Issue. Due to the oversubscription, the Board had to reject part of the subscriptions made on the basis of the secondary subscription rights in accordance with the terms of the Share Issue. In total, 2.413 subscribers participated in the Share Issue.
The Company collected 4,911,973 Euros of new equity through the Share Issue. Approximately 2.4 million Euros of the total subscription price was paid by the capital and/or interest receivables related to loans with interest that the Company owed to the respective subscribers. This includes the subscription of approximately 2.1 million Euros by Savcor Group Oy. The subscription price of 4,911,973 Euros for the Share Issue was entered in whole into the fund of the invested unrestricted equity of the Company. The Share Issue did not have any effects to the registered share capital of the company. The new shares were registered with the Trade Register on 4 February 2014 and were entered into public trading on 5 February 2014.
Cencorp agreed with its financiers on amendment of the financial agreements and announced on 10 January 2014 that:
- Danske Bank Oyj’s financial facility agreement totaling EUR 4 million was continued until 31 March 2015. However, the extension is subject to Finnvera extending accordingly its guarantee connected to the facility agreement. Finnvera's current guarantee, connected to the facility agreement, is valid until 29 June 2014. If Finnvera does not extend its guarantee, Danske Bank's facility agreement signed on 10 January 2014 will be valid until 27 June 2014.
- The maturity date of a convertible bond of some EUR 1.2 million from Savcor Group Oy was extended until 31 March 2015 provided Danske Bank's facility agreement shall be valid until 31 March 2015. Should Danske Bank's facility agreement be due already on 27 June 2014, Savcor Group Oy's loan shall be due 27 June 2014 accordingly. At the share issue with subscription period ending on 24 January 2014 Savcor Group Oy subscribed Cencorp shares for the total amount of the loan.
- The maturity date of a loan of EUR one million from Savcor Invest BV, a daughter company of Savcor Group Oy, was extended until 31 March 2015 provided Danske Bank's facility agreement shall be valid until 31 March 2015. Should Danske Bank's facility agreement be due already on 27 June 2014, Savcor Invest B.V.'s loan shall be due 27 June 2014 accordingly.
In the directed share issue for a fee to certain Cencorp´s directors and a previous Board Member, released on April 11, 2014 altogether 8,159,821 new company shares were subscribed. The subscription price for the shares in the directed share issue was 0.025 Euro per share. Company has accepted the subscriptions. The company collected approx. 203,996 Euros of new equity through the directed share issue and 201,996 Euro of the subscriptions has been paid by the setting-off non-disputed contractual based receivables. According to the terms and conditions of the directed share issue, the subscription price shall be recorded entirely to the company's invested free equity fund.
Based on the current information available to the Company, the Company believes that the cash flow of the business operations of the Company will turn positive during the second half of the year 2014 with the Company's current costs structure, provided that the Company achieves its minimum turnover objective for 2014 the likelihood of which is in the Company's view reasonable given its previous turnover levels, recent order book and tender activity.
In case the cash flow of the Company will not turn positive at the latest during the second half of the year 2014 pursuant to the objective of the Company; and/ or the Company does not have at least the credit limits corresponding to the current limits of 4.0 million Euros; or the Company does not manage to negotiate postponement of the maturity dates for its maturing loans; and/or the Company does not manage to acquire separate financing for its investments pursuant to the investment program of the Company (from clients, partners, venture capital investors or from other third parties such as Tekes - the Finnish Funding Agency for Technology and Innovation), the Company may be obliged to reconsider the scope of its clean energy business and to lower its growth target for the future. As other alternatives, the Company has considered, and will consider in the future, the possibilities to divest such business operations that do not belong to its key business operations pursuant to the current strategy of the Company. Such business operations are i.e. RFID and flexible electronics for mobile phones businesses. At the moment, the Company is investigating possible buyers for these business operations as disclosed previously.
In the Auditor’s Report in the Annual Report 2013 the company’s auditor drew attention to the financial risk management with a so called Emphasis of Matter as follows: “Without qualifying our opinion, we draw attention to the basis of preparation of the financial statements and to the note 29. Financial risk management. The financial statements have been repared under the going concern assumption. The continuity of operations requires that during the year 2014 the company is able to obtain supplementary funding, to negotiate changes to the terms of payment and that cash flow from business operations turns positive. However, should the company fail to arrange financing, it is possible that the company will not be able to realize its assets and repay its liabilities within usual business operations to a sufficient extent or quickly enough. These factors, together with other issues mentioned in the report of the Board of Directors and the notes to the financial statements show material uncertainty, which may challenge the company’s going concern assumption.”
RESEARCH AND DEVELOPMENT
The Group’s research and development costs during the January – March period amounted to EUR 0.4 million (EUR 0.5 million) or 17.2 (19.1) percent of net sales.
INVESTMENTS
Gross investments during the January – March period amounted to EUR 0.15 million (EUR 1.8 million). All of the investments were in development costs.
PERSONNEL
At the end of March the Group employed 144 (160) people, out of which 51 persons worked in Finland, 79 persons in China and 14 persons in other countries. During the reporting period, salaries and fees totalled EUR 1.2 million (EUR 1.0 million).
SHARES AND SHAREHOLDERS
Cencorp’s share capital amounted to EUR 3 425 059.10 at the end of the reporting period. The number of shares was 854 312 315. The company has one series of shares, which confer equal rights in the company. Cencorp did not own any of its own shares at the end of the reporting period.
The company had a total of 6 111 shareholder at the end of March 2014, and 0.6 percent of the shares were owned by foreigners. The ten largest shareholders held 82.5 percent of the company’s shares and voting rights on 31 March 2014.
The largest shareholders on 31 March 2014
| Shares | Votes | |
| 1. SAVCOR GROUP OY | 346 591 142 | 40.6 |
| 2. SAVCOR GROUP LIMITED | 133 333 333 | 15.6 |
| 3. GASELLI CAPITAL OY | 95 623 474 | 11.1 |
| 4. KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA | 63 673 860 | 7.5 |
| 5. SAVCOR INVEST B.V. | 39 374 994 | 4.6 |
| 6. FRATELLI OY | 9 223 250 | 1.1 |
| 7. SCI INVEST OY | 6 870 645 | 0.8 |
| 8. TROBE OY | 4 000 000 | 0.5 |
| 9. HUHTALA KAI | 3 687 500 | 0.4 |
| 10.PARPOLA VILLE | 2 498 759 | 0.3 |
| OTHERS | 149 435 358 | 17.5 |
| TOTALLY | 854 312 315 | 100.0 |
The members of the Board of Directors and the President and CEO, either directly or through companies under their control, held a total of 526,170,114 shares in the company on 31 March 2014, representing about 61.6 percent of the company’s shares and voting rights. Gaselli Capital Oy’s, that is under Sauli Kiuru’s control, shareholding in Cencorp has not been recognized in the shareholding of the Board Members because Sauli Kiuru was elected in the Board at the general annual meeting hold on 25 April 2014, after the reporting period had ended. Iikka Savisalo, Cencorp’s Managing Director, either directly or through companies under his control, held a total of 526,170,114 shares in the company and 15,852,856 options connected to bond I/2012.
The price of Cencorp’s share varied between EUR 0.01 and 0.04 during the January – March period. The average price was EUR 0.02 and the closing price at the end of March EUR 0.01. A total of 69.8 million Cencorp shares were traded at a value of EUR 1.6 million during the January – March period. The company’s market capitalization at the end of March stood at EUR 8.5 million.
No share options were granted to the company’s management during the reporting period. On 31 March 2014, the company had On 31 December 2013 the company hold 15,852,856 options connected to bond I/2012 with subscription period ending on 7 December 2014. Options connected to bond I/2012 are held by SCI Invest Oy and Savcor Group Oy. On 31 March 2014 the company had 30,000,000 options connected to bond I/2013 with a subscription period ending on 2 June 2015. The options connected to bond I/2013 are held by Keskinäinen Vakuutusyhtiö Etera and Oy Ingman Finance Ab.
SHARE ISSUE AUTHORIZATIONS IN FORCE
Cencorp’s Extraordinary General Meeting held on 30 January 2012 decided to authorize the Board of Directors to issue 100,000,000 new shares. 36,411,608 shares remain under the authorization.
The Extraordinary General Meeting of Cencorp Corporation held on 4 December 2013 authorized the Board of Directors of the company to decide on a share issue to the shareholders of the company and to the holders of the convertible bonds of the company, so that the maximum number of new shares to be issued based on the authorization is 510 000 000 new shares of the company. The Board of Directors is entitled to resolve on any other terms and conditions of the share issue. The authorization is in force until further notice, however, in maximum for five years as of the resolution of the General Meeting. The authorization does not revoke the earlier authorizations. 508,151,045 shares, under the authorization, were issued in the share issue ended on 24 January 2014. There remain 1,848,955 shares under the authorization.
THE MAJOR EVENTS ON THE REPORTING PERIOD
Cencorp’s share issue
In Cencorp’s share issue, ended on 24 January 2014, the total amount of subscriptions was 627,064,325 shares, which represents 123 percent of the 508,151,045 shares offered in the Share Issue. Due to the oversubscription, the Board had to reject part of the subscriptions made on the basis of the secondary subscription rights in accordance with the terms of the Share Issue. As a result of the Share Issue, the number of the Company's shares shall increase by 508,151,045 to 854,312,315 shares. In total, 2,413 subscribers participated in the Share Issue.
The Company collected 4,911,973 Euros of new equity through the Share Issue. Approximately 2.4 million Euros of the total subscription price was paid by the capital and/or interest receivables related to loans with interest that the Company owed to the respective subscribers. This includes the subscription of approximately 2.1 million Euros by Savcor Group Oy. The subscription price of 4,911,973 Euros for the Share Issue shall be in whole entered into the fund of the invested unrestricted equity of the Company. The Share Issue has no effects to the registered share capital of the company. The new shares were registered with the Trade Register on 4 February 2014 and were entered into public trading on 5 February 2014.
Vikram Solar and Cencorp consider opportunities for business and partnership collaboration
Vikram Solar Pvt, Ltd ("Vikram Solar"), an Indian company, and Cencorp have started to review collaboration opportunities for using Cencorp's MWT (Metal Wrap Through) technology for photovoltaic modules in Vikram Solar's solar energy projects. MWT technology refers to Conductive Back Sheet (CBS) based module structure.
The parties have signed a Term Sheet on collaboration on 7 February 2014. As agreed in the Term Sheet consideration of collaboration options shall take six months, at the most. During that time the parties negotiate both business opportunities in photovoltaic module business and opportunities for ownership arrangements between the companies.
Vikram Solar is the leading provider of solar energy projects in India and it belongs to a technology group Vikram Group (www.vikram.in).
The non-binding Term Sheet Cencorp has signed with Vikram Solar involves risks which have been handled in the item “Risk management, Risks and Uncertainties” of this Interim Report.
THE MAJOR EVENTS SINCE THE END OF THE REPORTING PERIOD
Reverse stock split
Cencop has previously announced that the company’s Board of Directors has commenced preparations for convening an extraordinary general meeting to decide on reduction of the number of the shares without reducing the value of the shares (so called reverse stock split). The purpose of the reverse stock split is to boost trading and pricing of the shares of the company. At that point it was estimated that the issue will be handled either at an extraordinary general meeting during the spring 2014 or at Cencorp’s annual general meeting.
On 1 April 2014 the company’s Board of Directors resolved not to take the reverse stock split to the annual general meeting held on 25 April 2014. However, preparations of the issue continue. According to the current knowledge the issue will be handled at an extraordinary general meeting to be held during year 2014.
Directed share issue for the fee for certain directors and employees and a former member of the Board of Directors of the company
In directed share issue for a fee to certain Cencorp´s directors and a previous board member, released on April 11, 2014 alltogether 8,159,821 new company shares were subscribed. The subscription price for the shares in the directed share issue was 0.025 euro per share. Company has accepted the subscriptions.
The company collected approx. 203,996 Euros of new equity through the directed share issue and 201,996 Euro of the subscriptions has been paid by the setting-off non-disputed contractual based receivables. According to the terms and conditions of the directed share issue, the subscription price shall be recorded entirely to the company's invested free equity fund.
Due to the accepted share subscriptions the amount of the shares in the company shall increase from 854,312,315 shares to 862,472,136 shares once the new shares have been registered with the Trade Register. The Company aims to apply for listing of the new shares at the official list of NASDAQ OMX Helsinki Ltd together with the shares already issued and listed latest approximately on May 30, 2014. For the listing of the new shares, the company will separately publish a supplement to the Registration Document dated December 9, 2013 as well as a Summary and a Securities Note prior to the listing of the new shares.
Decisions at the annual general meeting and organizing of the Board of Directors
Cencorp Corporation's Annual General Meeting was held on 25 April 2014 in Mikkeli, Finland. The AGM approved the 2013 financial statements and discharged the members of the Board and the President and CEO from liability for the financial year 2013. According to the Board' proposal, it was decided that no dividend for the financial year 2013 will be distributed. It was also decided that the loss for the financial period that ended on 31 December 2013 will be entered in retained earnings.
It was decided that 4 members will be elected to the Board of Directors of Cencorp. MSc (economics) Mr. Sauli Kiuru (b. 1972) who was elected as new board member, works as Chairman of the Board of Gaselli Capital Oy and CEO of Siesta Group Oy. Previously Mr. Kiuru has been working as CFO and board member of Barona Group Oy, as auditor in KPMG and as secretary of the Auditor´s Committee of Finnish Central Chamber of Commerce. Mr. Kiuru has wide experience concerning board work in growth companies. Sauli Kiuru is the chairman of the board of Siesta Group Oy, BiiSafe Oy and Stata Oy. He has been board member of Cencorp previously in years 2006 - 2008. Gaselli Capital Oy which is controlled by Mr. Kiuru owns 95,000,000 Cencorp shares, which represents approx. 11.1 percent of the share capital of Cencorp.
Mrs. Marjukka Karttunen, industrial counsellor Mr. Hannu Savisalo and CEO Mr. Iikka Savisalo continue as old Board members in the Cencorp Corporation´s Board of Directors.
At its organizing meeting following the AGM, Cencorp's Board of Directors elected Hannu Savisalo as the Chairman and Marjukka Karttunen as the Vice Chairman of the Board. The Board of Directors decided, due to the scope of the company's business, that it is not necessary to establish any separate Board committees.
The AGM decided that an annual remuneration of EUR 40,000 will be paid to the Chairman and to the Vice Chairman of the Board, and EUR 30,000 to the members of the Board of Directors. Travel costs of the Board members will be paid according to the company’s travel policy.
Ernst & Young Oy, Authorized Public Accounting Firm, continues as the Company auditor and Mikko Rytilahti, APA, as the responsible auditor.
Change in Cencorp’s management team on 7 May 2014
Mr Jari Ketoluoto, (Diploma in Business Administration, born 1962) has been appointed as CEO of Laser and Automation Solutions segment (LAS). Previously he acted as Vice President of Laser and Automation Solutions. Mr Ketoluoto continues in Cencorp's Management Team. He reports to Mr Iikka Savisalo, Cencorp's CEO.
Mr Petri Kivelä's, Vice President LCM, employment with Cencorp and membership in the company's Management Team has ended. Mr Jari Ketoluoto is responsible for the Life Cycle Management segment as well.
RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Cencorp’s Board of Directors is responsible for the control of the company’s accounts and finances. The Board is responsible for internal control, while the President and CEO handles the practical arrangement and monitors the efficiency of internal control. Business management and control are taken care of using a Group-wide reporting and forecasting system.
The purpose of risk management is to ensure that any significant business risks are identified and monitored appropriately. The company’s business and financial risks are managed centrally by the Group’s financial department, and reports on risks are presented to the Board of Directors as necessary.
Due to the small size of the company and its business operations, Cencorp does not have an internal auditing organization or an audit committee.
The sufficiency of the company’s financing and working capital involve risks that are handled in more detail in the item “Financing” of this Interim Report. Pursuant to the understanding of the management of the company on the date hereof, with the share issue and the extension of the financial agreements described in the item “Financing”, the company has ensured the sufficiency of its working capital for the period of next twelve months, provided that the Company has at its disposal at least the credit limits corresponding to the current limits of 4.0 million Euros; the aforesaid Finnvera guarantee will be extended and will be valid also after 29 June 2014; the company has in its use separate financing for the investments pursuant to its investment program as planned; and the cash flow of the business operations of the company will turn positive during the second half of the year 2014, at the latest. However, the company will have a deficit in its working capital until the first delivery of production technology for solar modules will start to generate cash flow.
In the Auditor’s Report in the Annual Report 2013 the company’s auditor drew attention to the financial risk management with a so called Emphasis of Matter as follows: “Without qualifying our opinion, we draw attention to the basis of preparation of the financial statements and to the note 29. Financial risk management. The financial statements have been repared under the going concern assumption. The continuity of operations requires that during the year 2014 the company is able to obtain supplementary funding, to negotiate changes to the terms of payment and that cash flow from business operations turns positive. However, should the company fail to arrange financing, it is possible that the company will not be able to realize its assets and repay its liabilities within usual business operations to a sufficient extent or quickly enough. These factors, together with other issues mentioned in the report of the Board of Directors and the notes to the financial statements show material uncertainty, which may challenge the company’s going concern assumption.”
In case the cash flow of the company will not turn positive at the latest during the second half of the year 2014 pursuant to the objective of the company; and/ or the company does not have at least the credit limits corresponding to the current limits of 4.0 million euros; or the company does not manage to negotiate postponement of the maturity dates for its maturing loans; and/or the company does not manage to acquire separate financing for its investments pursuant to the investment program of the company (from clients, partners, venture capital investors or from other third parties such as Tekes - the Finnish Funding Agency for Technology and Innovation), the company may be obliged to reconsider the scope of its clean energy business and to lower its growth target for the future. As other alternatives, the company has considered, and will consider in the future, the possibilities to divest such business operations that do not belong to its key business operations pursuant to the current strategy of the Company. Such business operations are i.e. RFID and flexible electronics for mobile phones businesses. The company is investigating possible buyers for these business operations as disclosed previously.
As it is difficult to make forecasts in an industry that is dependent on economic cycles, the biggest business risks are related to fluctuations in the demand for products and to the adjustment of operations to meet demand.
In terms of profitability, the most essential risks are related to the achievement of a sufficient invoicing volume in all three business segments and the success achieved with the programs underway at Cencorp to improve profitability, such as improvements in productivity and business flexibility through outsourcing production.
Cencorp has announced that its objective is to transform from a company manufacturing only production automation systems and special components into a company that develops and provides cleantech applications using laser and automation technology as well as into a company that has a strong market position as a provider of, in various geographical areas, locally produced high-quality photovoltaic modules. Achievement of the objectives as well as realization of the transformation involves risks. Even though Cencorp's strategy and objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the company reaches all or part of the targets set for it. Cencorp's future outlook will be highly dependent on the company's ability to reach the targeted market position in the global photovoltaic module market as well as on the company's short and long-term financing.
The execution of the non-binding Memorandum of Understanding signed with a major Chinese photovoltaic module manufacturer involves risks. The final terms of an agreement are still under negotiations, thus execution of the agreement is not yet guaranteed. Additionally, the agreement is subject to Cencorp's short-term and long-term financing. Thus, Cencorp is not yet able to estimate the agreement's possible execution, effective date neither the agreement's impact in Cencorp nor the final risks relating to it. However, in regard to the Memorandum of Understanding on delivering CBS to the Chinese photovoltaic module manufacturer, the estimated minimum value of EUR 20 million for three years’ period from the start of mass production will probably stay non-binding even though the actual Memorandum of Understanding turns into a binding supply contract. In this business customers do not give binding order estimations.
The execution of the non-binding cooperation agreement signed between Cencorp and Vikram Solar involves risks. The negotiations for business and partnership collaboration between the parties, including detailed terms, are still under negotiations, thus it is not yet certain that the transactions will be materialized. Further, realization of the transactions defined in the non-binding Term Sheet is subject to several issues such as due diligence and especially to Cencorp's short and long term financing. Therefore, Cencorp is not yet able to estimate possible realization and effective date of the transactions, the transactions' influence in Cencorp or risks relating to them. Cencorp will announce further information as soon as the negotiations have been finished.
The long-term objectives set for the Managing Director involves also risks and the long-term objective should not be considered as the company’s financial guidance. Even though the objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the Managing Director reaches all or part of the targets set for him within estimated timetable. If Cencorp’s strategy change is delayed, the risk of the Managing Director reaching the objectives set for him in the stated timetable will increase. If Cencorp does not succeed to sign a contract for delivering at least one normal sized solar module plant during the fiscal year 2014, the company has to re-evaluate the objectives set for the Managing Director and their timetable in the second half of 2014.
Other risks connected to Cencorp have been presented in more detail in the Share Issue Registration Document and its appendixes published on 9 December 2013 as well as in the Annual Report.
In Mikkeli, 14 May 2014
Cencorp Corporation
BOARD OF DIRECTORS
For more information please contact:
Cencorp: Iikka Savisalo, President and CEO, tel. +358 40 521 6082, iikka.savisalo@savcor.com
Distribution:
NASDAQ OMX, Helsinki
Main media
www.cencorp.com
| Consolidated statement of comprehensive income | ||||
| (unaudited) | ||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | |
| Net sales | 2 436 | 2 492 | 11 126 | |
| Cost of sales | -2 720 | -2 327 | -10 662 | |
| Gross profit | -284 | 165 | 464 | |
| Other operating income | 54 | 702 | 933 | |
| Product development expenses | -418 | -475 | -2 002 | |
| Sales and marketing expenses | -487 | -414 | -1 512 | |
| Administrative expenses | -580 | -540 | -1 945 | |
| Other operating expenses | -14 | -121 | -1 103 | |
| Operating profit | -1 729 | -683 | -5 165 | |
| Financial income | 96 | 367 | 460 | |
| Financial expenses | -503 | -354 | -2 247 | |
| Profit before taxes from continuing operations | -2 137 | -668 | -6 953 | |
| Income taxes | 0 | 2 | -11 | |
| Profit/loss for the period from continuing operations | -2 137 | -669 | -6 964 | |
| Discontinued operations | ||||
| Profit/loss after tax for the period from discontinued operations | 0 | -9 | -44 | |
| Profit/loss for the period | -2 137 | -678 | -7 008 | |
| Profit/loss attributable to: | ||||
| Shareholders of the parent company | -2 137 | -678 | -7 008 | |
| Earnings/share (diluted), eur | -0,003 | -0,001 | -0,01 | |
| Earnings/share (basic), eur | -0,003 | -0,001 | -0,01 | |
| Continuing operations: | ||||
| Earnings/share (diluted), eur | -0,003 | -0,001 | -0,01 | |
| Earnings/share (basic), eur | -0,003 | -0,001 | -0,01 | |
| Profit/loss for the period | -2 137 | -678 | -7 008 | |
| Other comprehensive income | ||||
| Translation difference | -98 | 23 | 155 | |
| Net other comprehensive income to be reclassified to | ||||
| profit or loss in subsequent periods | -98 | 23 | 155 | |
| Total comprehensive income for the period | -2 235 | -654 | -6 853 | |
| Total comprehensive income attributable to: | ||||
| Shareholders of the parent company | -2 235 | -654 | -6 853 | |
| Consolidated statement of financial position | ||||
| (unaudited) | ||||
| 1 000 EUR | 31.3.2014 | 31.3.2013 | 31.12.2013 | |
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 5 126 | 6 923 | 5 604 | |
| Consolidated goodwill | 2 538 | 2 967 | 2 538 | |
| Other intangible assets | 5 269 | 3 864 | 5 512 | |
| Available-for-sale investment | 9 | 10 | 9 | |
| Deferred tax assets | 6 | 9 | 7 | |
| Total non-current assets | 12 949 | 13 772 | 13 670 | |
| Current assets | ||||
| Inventories | 2 284 | 2 850 | 2 198 | |
| Trade and other non-interest-bearing receivables | 2 316 | 2 693 | 2 514 | |
| Cash and cash equivalents | 283 | 439 | 116 | |
| Total current assets | 4 884 | 5 981 | 4 828 | |
| Assets classified as held for sale | 0 | 37 | 0 | |
| Total assets | 17 832 | 19 790 | 18 498 | |
| EQUITY AND LIABILITIES | ||||
| Equity attributable to shareholders of the parent company | ||||
| Share capital | 3 425 | 3 425 | 3 425 | |
| Other reserves | 49 325 | 43 691 | 44 568 | |
| Translation difference | 734 | 701 | 833 | |
| Retained earnings | -52 232 | -43 289 | -50 095 | |
| Total equity | 1 252 | 4 528 | -1 269 | |
| Non-current liabilities | ||||
| Non-current loans | 3 205 | 2 554 | 3 222 | |
| Deferred tax liabilities | 5 | 24 | 7 | |
| Total non-current liabilities | 3 210 | 2 578 | 3 229 | |
| Current liabilities | ||||
| Current interest-bearing liabilities | 5 462 | 4 760 | 6 795 | |
| Trande and other payables | 7 776 | 7 679 | 9 594 | |
| Current provisions | 132 | 244 | 150 | |
| Total current liabilities | 13 370 | 12 683 | 16 538 | |
| Liabilities directly associated with assets classified as held for sale | 0 | 1 | 0 | |
| Total liabilities | 16 580 | 15 262 | 19 768 | |
| Equity and liabilities total | 17 832 | 19 790 | 18 498 | |
| Consolidated statement of cash flows | |||||
| (unaudited) | |||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | ||
| Cash flow from operating activities | |||||
| Income statement profit/loss from continuing operations before taxes | -2 137 | -670 | -6 953 | ||
| Income statement profit/loss from discontinued operations before taxes | 0 | -9 | -44 | ||
| Income statement profit/loss before taxes | -2 137 | -679 | -6 997 | ||
| Non-monetary items adjusted on income statement | |||||
| Depreciation and impairment | + | 552 | 496 | 2 463 | |
| Gains/losses on disposals of non-current assets | +/- | 0 | -8 | -8 | |
| Unrealized exchange rate gains (-) and losses (+) | +/- | 41 | -286 | 259 | |
| Other non-cash transactions | +/- | 109 | 139 | 21 | |
| Financial income and expense | + | 367 | 273 | 1 564 | |
| Total cash flow before change in working capital | -1 068 | -65 | -2 698 | ||
| Change in working capital | |||||
| Increase (-) / decrease (+) in inventories | -93 | -114 | 319 | ||
| Increase (-) / decrease (+) in trade and other receivables | 185 | 231 | 161 | ||
| Increase (+) / decrease (-) in trade and other payables | -889 | 266 | 2 248 | ||
| Change in provisions | -17 | -13 | -108 | ||
| Change in working capital | -815 | 370 | 2 620 | ||
| Adjustment of financial items and taxes to cash-based accounting | |||||
| Interest paid | - | -102 | -91 | -361 | |
| Interest received | + | 0 | 0 | 2 | |
| Other financial items | - | -53 | -29 | -300 | |
| Taxes paid | - | -3 | 0 | -11 | |
| Financial items and taxes | -157 | -121 | -670 | ||
| NET CASH FLOW FROM BUSINESS OPERATIONS | -2 040 | 185 | -748 | ||
| CASH FLOW FROM INVESTING ACTIVITIES | |||||
| Investments in tangible and intangible assets | - | -380 | -776 | -2 963 | |
| Proceeds on disposal of tangible and intangible assets | + | 0 | 19 | 55 | |
| Repayment of loan receivables | + | 0 | 0 | 0 | |
| NET CASH FLOW FROM INVESTMENTS | -380 | -743 | -2 875 | ||
| CASH FLOW FROM FINANCING ACTIVITIES | |||||
| Proceeds from share issue | + | 2 375 | 0 | 0 | |
| Proceeds from non-current borrowings | + | 98 | 404 | 2 425 | |
| Stock options of the convertible bond | + | 0 | 0 | 432 | |
| Proceeds from current borrowings | + | 1 810 | 621 | 5 399 | |
| Repayment of current borrowings | - | -1 713 | -592 | -5 102 | |
| Dividends paid | - | 0 | 0 | 0 | |
| NET CASH FLOW FROM FINANCING ACTIVITIES | 2 567 | 431 | 3 141 | ||
| INCREASE (+) OR DECREASE (-) IN CASH FLOW | 147 | -127 | -483 | ||
| Consolidated statement of changes in equity | ||||||
| (unaudited) | ||||||
| 1 000 EUR | Share capital | Other reserves | Translation difference | Distributable nonrestricted equity fund | Retained earnings | Total |
| 31.12.2013 | 3 425 | 4 908 | 833 | 39 661 | -50 095 | -1 269 |
| Share issue | - | - | - | 4 882 | - | 4 882 |
| Share issue expenses | - | - | - | -125 | - | -125 |
| Translation difference, comprehensive income | - | - | -98 | 0 | -98 | |
| Profit/loss for the period | - | - | - | - | -2 137 | -2 137 |
| 31.3.2014 | 3 425 | 4 908 | 734 | 44 417 | -52 232 | 1 252 |
| 1 000 EUR | Share capital | Other reserves | Translation difference | Distributable nonrestricted equity fund | Retained earnings | Total |
| 31.12.2012 | 3 425 | 4 908 | 677 | 38 783 | -43 091 | 4 703 |
| Stock options of the convertible bond | - | - | - | - | 480 | 480 |
| Translation difference, comprehensive income | - | - | 23 | - | - | 23 |
| Profit/loss for the period | - | - | - | - | -678 | -678 |
| 31.3.2013 | 3 425 | 4 908 | 701 | 38 783 | -43 289 | 4 528 |
| Segment information | |||||
| (unaudited) | |||||
| 14 May 2013 Cencorp announced that the company changes its reporting system to comply with the company's Cleantech strategy and as from 1 January 2013 Cencorp reports of three business segments. The segments are Laser and Automation Applications, Life Cycle Management and Clean Energy Solutions (including also the former Special Components segment). Cencorp's new segment information is based on the management's internal reporting and on the organisation structure. | |||||
| The segment information include only continuing operations. Information regarding discontinued operations is given in attachment "Discontinued operations". | |||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | ||
| Net sales | |||||
| Laser and Automation Applications | 1 089 | 779 | 4 881 | ||
| Life Cycle Management of Laser and Automation Applications | 792 | 878 | 3 101 | ||
| Clean Energy Solutions | 579 | 893 | 3 340 | ||
| Eliminations | -24 | -59 | -196 | ||
| Total | 2 436 | 2 492 | 11 126 | ||
| Operating profit | |||||
| Laser and Automation Applications | -524 | -592 | -2 063 | ||
| Life Cycle Management of Laser and Automation Applications | 31 | 88 | 94 | ||
| Clean Energy Solutions | -1 232 | -185 | -3 197 | ||
| Eliminations | -4 | 6 | 2 | ||
| Total | -1 729 | -684 | -5 165 | ||
| EBITDA | |||||
| Laser and Automation Applications | -422 | -442 | -1 129 | ||
| Life Cycle Management of Laser and Automation Applications | 65 | 122 | 281 | ||
| Clean Energy Solutions | -816 | 126 | -1 856 | ||
| Eliminations | -4 | 6 | 2 | ||
| Total | -1 177 | -188 | -2 703 | ||
| Depreciation | |||||
| Laser and Automation Applications | 102 | 137 | 492 | ||
| Life Cycle Management of Laser and Automation Applications | 34 | 35 | 138 | ||
| Clean Energy Solutions | 416 | 311 | 1 288 | ||
| Total | 552 | 482 | 1 919 | ||
| Impairment | |||||
| Laser and Automation Applications | 0 | 14 | 442 | ||
| Life Cycle Management of Laser and Automation Applications | 0 | 0 | 49 | ||
| Clean Energy Solutions | 0 | 0 | 53 | ||
| Total | 0 | 14 | 544 | ||
| Discontinued operations | ||||
| (unaudited) | ||||
| 29 May 2012 Cencorp announced that it exits from its unprofitable decoration business and closes down its plant in Guangzhou, China, producing decoration applications. In consequence of the closing down of the Guangzhou plant and the exit from decoration business Cencorp reports the financial figures relating to the Guangzhou plant’s decoration business as discontinued operations from now on. | ||||
| The assets of Savcor Face (Guangzhou) Technologies Co., Ltd, reported as discontinued operation, were written- off at fair value in the second quarter of 2012 and sold in the fourth quarter of 2012. | ||||
| The results and major classes of assets and liabilities of Savcor Face (Guangzhou) Technolgies Co., are as follows: | ||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | |
| Revenue | 0 | 0 | 0 | |
| Expenses | 0 | -9 | -8 | |
| Other opeating income | 0 | 0 | 0 | |
| Loss recognised on the remeasurement to fair value | 0 | 0 | 0 | |
| Operating profit | 0 | -9 | -8 | |
| Finance costs | 0 | 0 | -36 | |
| Profit/loss before tax from discontinued operation | 0 | -9 | -44 | |
| Income tax | 0 | 0 | 0 | |
| Profit/loss after tax from discontinued operation | 0 | -9 | -44 | |
| Assets | ||||
| Property, plant and equipment | 0 | 0 | 0 | |
| Other intangible assets | 0 | 0 | 0 | |
| Inventories | 0 | 0 | 0 | |
| Trade and other non-interest-bearing receivables | 0 | 36 | 0 | |
| Cash and cash equivalents | 0 | 0 | 0 | |
| Assets classified as held for sale | 0 | 36 | 0 | |
| Liabilities | ||||
| Trande and other payables | 0 | 1 | 0 | |
| Provisions | 0 | 0 | 0 | |
| Liabilities directly associated with assets classified as held for sale | 0 | 1 | 0 | |
| Net assets directly associated with disposal group | 0 | 36 | 0 | |
| Savcor Face (Guangzhou) Technolgies Co., Ltd:n net cash flow: | ||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | |
| Operating | 0 | -41 | -41 | |
| Investing | 0 | 0 | 0 | |
| Financing | 0 | 0 | 0 | |
| Net cash flow | 0 | -41 | -41 | |
| Earnings/share (basic), from discontinued operations | 0,00 | -0,00001 | -0,0001 | |
| Earnings/share (diluted) from discontinued operations | 0,00 | -0,00001 | -0,0001 | |
| Key figures | |||
| (unaudited) | |||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 |
| Net sales | 2 436 | 2 492 | 11 126 |
| Operating profit | -1 729 | -684 | -5 165 |
| % of net sales | -71,0 | -27,4 | -46,4 |
| EBITDA | -1 177 | -188 | -2 703 |
| % of net sales | -48,3 | -7,5 | -24,3 |
| Profit before taxes | -2 137 | -670 | -6 953 |
| % of net sales | -87,7 | -26,9 | -62,5 |
| Balance Sheet value | 17 832 | 19 790 | 18 498 |
| Equity ratio, % | 7,1 | 22,9 | -6,9 |
| Net gearing, % | 669,4 | 151,8 | n/a |
| Gross investments | 150 | 1 771 | 3 394 |
| % of net sales | 6,2 | 71,1 | 30,5 |
| Research and development costs | 418 | 475 | 2 002 |
| % of net sales | 17,2 | 19,1 | 18,0 |
| Order book | 3 034 | 2 076 | 3 703 |
| Personnel on average | 145 | 165 | 155 |
| Personnel at the end of the period | 144 | 160 | 149 |
| Non-interest-bearing liabilities | 7 776 | 7 679 | 9 594 |
| Interest-bearing liabilities | 8 667 | 7 314 | 10 017 |
| Share key indicators | |||
| Earnings/share (basic) | -0,003 | -0,001 | -0,01 |
| Earnings/share (diluted) | -0,003 | -0,001 | -0,01 |
| Earnings/share (basic), from continuing operations | -0,003 | -0,001 | -0,01 |
| Earnings/share (diluted) from continuing operations | -0,003 | -0,001 | -0,01 |
| Equity/share | 0,002 | 0,01 | -0,004 |
| P/E ratio | -3,70 | -70,00 | -3,74 |
| Highest price | 0,04 | 0,10 | 0,09 |
| Lowest price | 0,01 | 0,06 | 0,03 |
| Average price | 0,02 | 0,08 | 0,07 |
| Closing price | 0,01 | 0,07 | 0,04 |
| Market capitalisation, at the end of the period, MEUR | 8,5 | 24,0 | 13,8 |
| Calculation of Key Figures | |||
| EBITDA, %: | Operating profit + depreciation + impairment | ||
| Net sales | |||
| Equity ratio, %: | Total equity x 100 | ||
| Total assets - advances received | |||
| Net gearing, %: | Interest-bearing liabilities - cash and cash equivalents | ||
| and marketable securities x 100 | |||
| Shareholders' equity + minority interest | |||
| Earnings/share (EPS): | Profit/loss for the period to the owner of the parent company | ||
| Average number of shares adjusted for share issue | |||
| at the end of the financial year | |||
| Equity/share: | Equity attributable to shareholders of the parent company | ||
| Undiluted number of shares on the balance sheet date | |||
| P/E ratio: | Price on the balance sheet date | ||
| Earnings per share | |||
| Related party transactions | |||||||
| (unaudited) | |||||||
| Cencorp Corporation is part of Savcor Group Oy. The Group has purchased goods and services from companies in which the majority holding and/or power of decision granting control of the company is held by members of the Group's related parties. Sales of goods and services carried out with related parties are based on market prices. | |||||||
| The Group entered into the following transactions with related parties: | |||||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | ||||
| Sales of goods and services | |||||||
| Savcor companies | 14 | 17 | 175 | ||||
| Others | 0 | 0 | 9 | ||||
| Yhteensä | 14 | 17 | 175 | ||||
| Purchases of goods and services | |||||||
| Savcor companies | 119 | 136 | 474 | ||||
| Savcor Face Ltd | 18 | 18 | 81 | ||||
| Idem Finland Oy | 0 | 0 | 15 | ||||
| Others | 0 | 1 | 2 | ||||
| Total | 137 | 155 | 571 | ||||
| Interest income | |||||||
| Savcor companies | 0 | 0 | 2 | ||||
| Interest expenses and other financial expenses | |||||||
| Savcor companies | 58 | 82 | 354 | ||||
| SCI Invest Oy | 15 | 15 | 60 | ||||
| Iikka Savisalo | 0 | 0 | 2 | ||||
| Total | 73 | 97 | 416 | ||||
| Other non-current liabilities to related parties | 0 | 519 | 185 | ||||
| Non-current convertible subordinated loan from related parties | 0 | 1 219 | 0 | ||||
| Interest payable to related parties | 230 | 572 | 795 | ||||
| Other current liabilities to related parties | 1 519 | 1 000 | 1 455 | ||||
| Current convertible subordinated loan from related parties | 1 049 | 1 230 | 2 598 | ||||
| Trade payables and other non-interest-bearing liabilities to related parties | 702 | 856 | 916 | ||||
| Trade receivables from related parties | 87 | 73 | 136 | ||||
| SCI Invest Oy is a company under control of Iikka Savisalo, Cencorp's CEO. | |||||||
| 1 000 EUR | 1-3/2014 | 1-3/2013 | 1-12/2013 | ||||
| Wages and remuneration | |||||||
| Salaries of the management and Board | 223 | 176 | 730 | ||||
| Fair values | ||
| (unaudited) | ||
| Carrying amount | Fair value | |
| 1 000 EUR | 31.3.2014 | 31.3.2014 |
| Financial assets | ||
| Available-for-sale investments | 9 | 9 |
| Trade and other receivables | 2 316 | 2 316 |
| Cash and cash equivalents | 283 | 283 |
| The fair value of trade and other receivables is expected to correspond to the carrying amount due to their short maturity. | ||
| Financial liabilities | ||
| R&D loan, non-current | 1 334 | 1 334 |
| Other liabilities, non-current | 1 872 | 1 872 |
| Loans from financial institutions, current | 2 748 | 2 748 |
| Other liabilities, current | 2 714 | 2 714 |
| Trade payables and other non-interest-bearing liabilities | 5 333 | 5 333 |
| The fair value of non-current liabilities is expected to correspond to the carrying amount as the loans were withdrawn in late 2012 and in 2013 and recognized to their fair value when recorded. There has been no significant change in common interest rate after the withdrawal of the loans. | ||
| EUR 4.9 million out of trade payables and other current liabilites was overdue at the end of the reporting period. That included EUR 2.5 million of Savcor Face Bejing's overdue liabilities. | ||
| Change in intangible and tangible assets | |||
| (unaudited) | |||
| 1 000 EUR | 31.3.2014 | 31.3.2013 | 31.12.2013 |
| Includes tangible assets, consolidated goodwill and other intangible assets | |||
| Carrying amount, beginning of period | 13 654 | 12 634 | 12 634 |
| Depreciation and impairment | -552 | -482 | -2 221 |
| Additions | 229 | 1 447 | 3 691 |
| Disposals | -129 | -99 | -356 |
| Exchange rate difference | -269 | 254 | -94 |
| Carrying amount, end of period | 12 933 | 13 754 | 13 654 |
| Commitments and contingent liabilities | |||
| (unaudited) | |||
| 1 000 EUR | 31.3.2014 | 31.3.2013 | 31.12.2013 |
| Loans from financial institutions | 1 240 | 1 241 | 1 245 |
| Promissory notes secured by pledge | 12 691 | 12 691 | 12 691 |
| Factoring loan and export credit limit | 1 496 | 1 130 | 1 338 |
| Trade receivables | 822 | 735 | 499 |
| Promissory notes secured by pledge | 12 691 | 12 691 | 12 691 |
| Operating leases | |||
| Payable within one year | 11 | 24 | 17 |
| Payable over one year | 0 | 11 | 1 |
| Commitments | |||
| Payable within one year | 902 | 1 096 | 948 |
| Payable over one year | 804 | 846 | 830 |