Valoe Corporation Interim Report 27 May 2015 at 19.15 Finnish time
VALOE CORPORATION, INTERIM REPORT FOR JANUARY - MARCH 2015
SUMMARY
- The restructuring of Valoe Corporation (“Valoe”) from a company providing electronics automation solutions to a technology company focusing on clean energy solutions, particularly on photovoltaic solutions, is completed. Since FTTK Company Limited bought 70 percent of Valoe’s electronics automation business the company has reported of only one business segment. The segment is the Clean Energy Segment that is the company’s only continuing business. The company aims to close the FTTK transaction in terms of the remaining 30 percent as soon as possible.
- The net sales of the continuing operations of Valoe for the reporting period January – March 2015 was EUR 0.1 million (EUR 0.6 million in 2014). The operating profit of continuing operations was EUR -0.02 million (EUR -1.2 million), profit for the period EUR -0.2 million (EUR -1.6 million), earnings per share were EUR -0.0002 (-0.002) and EBITDA was EUR 0.2 million (EUR -0.8 million). On the corresponding period in 2014 the Beijing factory had still operations but the figures of the reporting period in 2015 include only the net sales of Valoe.
- Based on tax indemnity in the share and asset sale agreement between Valoe and Savcor Group Ltd done in 2009 a claim of EUR 0.7 million against Savcor Group Ltd has been booked in the other operating income in relation to taxation of the Beijing factory in China on the reporting period January – March. The outcome of the claim will have a major importance while evaluating the sufficiency of the parent company’s equity.
- The financing situation of Valoe continues to be very tight. If the company does not succeed in securing sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized. Since the sale of the electronics automation business Valoe has moved on to the next phase in its Cleantech strategy. In August 2014, according to the strategy and in order to obtain finance for it, Valoe decided to sell the remaining operations not included in its strategy, i.e. the production of RFID components and flexible electronics for mobile phones, to become a company providing solely clean energy solutions. Valoe is having ongoing negotiations for the sale of the operations and production machinery but likelihood of a sale has decreased in the course of time. Valoe Group has no longer any future expectations or assets relating to the factory in Beijing in its balance sheet.
- Valoe’s equity decreased below half of the share capital as on 31 December 2014. Thus, the Board of Directors convened a general meeting to consider measures to remedy the financial position of the company and to reduce the share capital among other things. The matter will be handled in the annual general meeting on 28 May 2015. In practice Valoe has already commenced measures to remedy the financial position of the company.
OVERVIEW
More information on principle activities and events during the reporting period can be found in the stock exchange releases published on Valoe’s website at www.valoe.com. The Interim Report has been drawn up in compliance with the IAS 34 Interim Financial Reporting standard. In the Interim Report Valoe has applied the same accounting principles as in its Annual Report 2014. The Interim Report has not been audited.
FINANCIAL DEVELOPMENT
Since Valoe transferred its electronics automation business to Cencorp Automation Oy and sold at first 70 percent and in December 2014 the remaining 30 percent of this company to FTTK Valoe reports of only one business segments, the Clean Energy segment. In terms of the latter 30 percent the transaction has not yet been closed.
Part of the deliveries of orders received by LAS and LCM segments before the transaction remained in Valoe. Net sales originating from these orders decreases and gradually finishes as the orders will be delivered during the financial year 2015. The LAS and LCM Segments are reported in the discontinued operations. In Valoe’s financial reports the profit of discontinued operations is reported on a separate line, apart from continuing operations, thus, the income statement, excluding the discontinued operations item, concern the company’s continuing operations only. The group’s segment information is based on the management’s internal reporting and on the organisation structure of the company.
Valoe’s equity decreased below half of the share capital as on 31 December 2014. Thus, the Board of Directors convened a general meeting to consider measures to remedy the financial position of the company and to reduce the share capital among other things. The matter will be handled in the annual general meeting on 28 May 2015. In practice Valoe has already commenced measures to remedy the financial position of the company.
The figures in brackets are comparison figures for the corresponding period in 2014, unless stated otherwise. In this Financial Statement Release the figures for Beijing have been reported in the continuing operations.
January - March 2015 (continuing operations)
- Valoe Group’s net sales decreased by 77.8 percent to EUR 0.1 million (In 2014: EUR 0.6 million including the component production at the Beijing factory).
- EBITDA was EUR 0.2 million (EUR -0.8 million).
- Operating profit was EUR -0.02 million (EUR -1.2 million).
- The profit before taxes was EUR -0.2 million (EUR -1.6 million).
- Profit for the period was EUR -0.2 million (EUR -1.6 million).
- Earnings per share were EUR -0.0002 (EUR -0.002) and diluted earnings per share EUR -0.0002 (EUR -0.002).
- Net sales of the Clean Energy segment (CCE) decreased by 77.8 percent to EUR 0.1 million (EUR 0.6 million) due to close-down of antenna production at the Beijing factory and operating profit was EUR -0.02 million (EUR -1.2 million). The segment’s EBITDA was EUR 0.2 million (EUR -0.8 million). On the reporting period the operating profit increased due to a claim of EUR 0.7 million against Savcor Group Ltd relating to the taxation of the Beijing factory in China that was booked in the other operating income. The claim is based on the tax indemnity in the share and asset sale agreement between Valoe and Savcor Group Ltd done in 2009. The outcome of the claim will have a major importance while evaluating the sufficiency of the parent company’s equity.
MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW
In 2015 Valoe’s most important objective is to conclude the ongoing business negotiations successfully; to secure short- and long-term financing facility; and to sign the first manufacturing partnership agreements.
On the first quarter of 2015 the company’s net sales were very low. The net sales consisted of small deliveries of PV modules and solar power plants. In terms of technology the company is ready for mass production and as the CEO I trust the net sales will grow on the second quarter.
Domestic demand for solar energy systems has grown clearly compared to the previous year. Valoe has received several orders which have only minor economic value but which are important reference cases for the company generating valuable knowledge and experience of the module manufacturing recipe, system design and installations. Reference cases are important while Valoe is endeavouring to sign agreements on module plant deliveries and manufacturing partnerships with foreign partners.
The company has ongoing negotiations with several candidates interested in manufacturing partnership. Some of the negotiations have proceeded significantly during the reporting period. It is possible that Valoe signs its first agreement exceeding the limit of EUR 0.4 million set for public releases on the second quarter of 2015. The company is aiming to sell one PV module plant and one production line during 2015. The total value of Valoe’s quotations has increased during the reporting period and the value of a single quotation, the biggest one in the company’s history, totals more than EUR 60 million.
Valoe has earlier announced that it has signed a Term Sheet with Vikram Solar, an Indian based company. The companies continue negotiating to find a cooperation model acceptable for both parties. In the future Valoe will make no separate announcement on the cooperation with Vikram unless a deal between the parties exceeds the company’s current limit for stock exchange releases.
During the reporting period Valoe has further improved its sales and developed its Conductive Back Sheet (“CBS”) technology for solar modules and related production. In my opinion the ongoing development will improve the competitiveness of Valoe’s technology and solutions.
As a material technology specialist Valoe participates, when possible, in the development of silicon based solar cells. Cells are the most crucial component in a module. Together with the German Fraunhofer ISE Valoe has developed and manufactured the first prototype of its own back contact solar cell. The company aims to develop a cost-efficient cell optimized for CBS technology by the end of 2015 and to build a CBS based module of 60 cells with efficiency of more than 290 Wp (nominal power) using the new solar cell.
The company is trying to find a manufacturing partner with mass production capability for the above mentioned cell production technology, developed by Valoe, within the next few years. Worldwide there are only very few advanced manufacturers of high efficiency modules with the power exceeding 290 Wp. Typically the cells are heterojunction (HJ) or interdigitated back contact (IBC) cells that are produced using complex and expensive methods. The price level of modules with HJ or IBC cells is significantly higher than the price level of traditional polycrystalline silicon modules of 250 – 260 Wp. Valoe’s objective is to achieve efficiency of HJ and IBC modules, i.e. more than 290 Wp, using lower-cost structure.
Valoe strives to develop new pioneering CBS based modules as well as components and production solutions for modules. If Valoe succeeds in its goal, future users, component suppliers, manufacturers and developers of CBS based modules will form an ecosystem. If the ecosystem is strong enough it is expected to draw in new manufacturing and other partners who operate in their own local geographical areas. Thus the partners can speed up commercialization of Valoe’s technology remarkably and enhance establishment of the technology in larger geographical area compared to Valoe using only its own resources.
Risks are described in 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 77.8 percent to EUR 0.1 million compared to the corresponding period in 2014. The EBITDA increased to EUR 0.2 million from the previous year’s EUR -0.8 million due to non-recurring income of EUR 0.7 million. Valoe will no longer give written reports on LAS and LCM segments. From 17 September 2014 the LAS and LCM business has been operated by Cencorp Automation Oy.
- FTTK has used its option to purchase the remaining 30 percent of the shares in Cencorp Automation Oy and the parties have signed an agreement on exercising the option in December 2014. However, in terms of the remaining 30 percent the transaction has not yet been closed.
The net sales of Valoe’s Clean Energy segment will be generated by the following four product concepts:
1. Photovoltaic modules and systems
Sales of modules and small photovoltaic systems are probably Valoe’s most visible but in terms of revenue potential the smallest product group. All Valoe’s PV modules are manufactured at the company’s factory in Mikkeli. They are mainly delivered to the company’s distributors and future manufacturing partners. Further, the company provides solar power plants and systems to its customers in Finland.
Current capacity of the company’s Mikkeli factory is designed to annually produce PV modules worth max EUR 6 – 8 million at the current market prices. Thus, the module sales do not form a major part of the sales of the company.
The first module manufacturing recipes fully developed by Valoe has passed the demanding test programs of the German Fraunhofer ISE, which enables Valoe’s modules to be certified in all market areas the company is targeting. After required administrative certification Valoe or its manufacturing partners are able to quote for their modules in competitive tendering where the certification in question is required.
2. Production lines and related components
Typically, manufacturers operating in the developing markets, e.g. in China, could be interested in investing in new production lines. These Valoe’s potential customers are producing traditional H-pattern modules. According to the information available to Valoe many manufacturers are going to start to manufacture next generation modules using the CBS technology. At least one of the world’s biggest manufacturers has already announced in public that it will start using CBS technology in 2015. These kinds of customers usually have their own module manufacturing recipe and require only production equipment or lines. According to Valoe’s estimation typical price of production equipment or a production line for solar modules is EUR 4 – 6 million.
The company is having negotiations for delivering solar module plants or production lines with several potential customers interested in Valoe’s production technology worldwide. The value of the contracts Valoe is negotiating for varies from approximately 2 million Euros to approximately 60 million Euros.
If Valoe is able to achieve market position it is targeting as a supplier of CBS production lines expected development in the market facilitates orders for tens of production lines in the next five years. The company estimates it will get the first order for this kind of production line in 2015.
3. Manufacturing partners
For the moment Valoe is negotiating for cooperation agreements with several potential manufacturing partners who as newcomers on the market would commit themselves to both Valoe’s production technology and module manufacturing recipe. In these cases Valoe would provide a partner with a turnkey delivery project and commit to minority shareholding in a manufacturing company if required. Manufacturing partners operate mainly in developing markets and produce solar energy modules for local and nearby markets. Value of a typical turnkey plant delivery is more than ten million euros. Valoe is aiming to sign at least 10 manufacturing partner contracts in the next five years.
4. Special components
Special components are the most important part in Valoe’s strategy and most remarkable in terms of net sales potential. Valoe’s first component is Conductive Back Sheet (CBS) developed by the company. All back contact modules require conductive back sheet in order to function. One normal size production line using back contact technology needs approximately 300,000 – 500,000 conductive back sheets in a year when operating at full capacity. Based on current estimation, considering price level in the near future, each production line will annually require back sheets worth approximately 5 – 11 million Euros.
In the future Valoe is planning to offer its partners other components too. These components might include e.g. various intelligent components, components relating to energy storages and special silicon wafer technology based on back contact.
The non-binding objectives of Valoe for both market share and the number of partners are ambitious and attainment of the objectives involves significant risks. However, Valoe views it has a technological concept that provides the company a good position to achieve the objectives. Attainment of the objectives is subject to sufficient financing.
During the reporting period January – March the gross investments in the Clean Energy i.e. the continuing operations totaled EUR 0.04 million. No investments were made in the discontinued operations.
OPERATING ENVIRONMENT
Valoe operates in industries applying clean energy technology.
Valoe’s operating environment is global. The company’s customers operating in the clean energy business are companies that provide products and services locally and/or worldwide.
Valoe’s key products and services have been designed for the photovoltaic market. Modern next generation conductive back sheet based solar modules can be manufactured with Valoe’s own module manufacturing recipe and automated production.
In the market, general attitude to the solar energy investments improved clearly already at the end of 2013. The same trend continued the whole year 2014 and still continues at the beginning of 2015. Many solar module manufacturers with solid market position have started to plan investing in capacity, partly to increase the amount of their production capacity and partly to replace production capacity for old H-pattern solar modules.
Valoe has previously announced that it views the focus of its future business will be in the developing countries. This view has further strengthened during the last quarter of 2014 and in 2015. Many of the mega trends such as national climate protection objectives; increasing industrialisation in the developing countries and increasing energy self-sufficiency, favour local manufacturing of solar modules. For the moment major part of the world’s solar module manufacturing is concentrated in China. Modules are manufactured in large labour-intensive units and are delivered to the world market to be installed.
In the developed countries solar electricity is mainly produced in large solar power plants located in open landscape feeding electricity to main grid. In this kind of power plants logistics costs, among others, can be optimized and such parameters as module’s capacity per square meter have not had major importance. In the developing countries logistics costs, in particular, are significant and demand is focused on so called mini grid systems where solar power plants have been decentralized and new local grid is built around them. Grids are connected to each other and to new small power plants as electricity consumption, distribution and production increases steadily. Electricity production is decentralized and electricity is distributed through a new type of grid infrastructure. Small power plants are often so called hybrids where solar power plants are operated together with diesel, water and wind power plants in same grid and where various energy storages can be integrated.
In an environment described above a local producer has much better possibilities to control logistics costs and adopt legislation favouring local production. Many of the partners Valoe is negotiating with have noticed that local production costs are clearly lower than prices of modules imported from China. When modules are produced locally possibilities to control the quality increase, too. In Valoe’s view CBS based modules have typically solid quality which improves module capacity in most of the cases.
MARKET OUTLOOK
Demand for high capacity modules has increased in the EU, US and Japanese markets as well in the last six months. Valoe is having negotiations on delivering solar modules developed by the company to these markets. Valoe views that in the future major part of its modules sold by distributors will be manufactured by Valoe’s manufacturing partners.
As announced on 21 August 2012 Valoe has decided not to give any financial guidance for the time being as the company is in a transition phase to become a company providing solely clean energy solutions. As the transition phase is still partly continuing Valoe does not give any financial guidance either for the 2015.
LONG-TERM OBJECTIVES FOR MANAGING DIRECTOR
Based on Valoe’s experience in the clean energy business so far and knowledge of technological development in the industry as well as the company’s evaluation of market development the Board of Directors of the company has set the long-term financial objectives for Managing on 12 November 2014. The objectives have been disclosed in the Interim Report for the third quarter of 2014. The objectives set for Managing Director should not be considered as the financial guidance.
The long-term objectives set for Managing Director and realization of the company’s business model involve significant risks and the objectives should not be considered as the company’s financial guidance. The long-term objectives set for Managing Director and their attainment fully depend on sufficiency of the company’s short-term financing and success in securing the long-term financing. Negotiations for both short-term and long-term financing are going on. The risks related to the long-term objectives set for Managing Director are described in detail in the item “Risk management, risks and uncertainties” of this Interim Report.
FINANCING
Cash flow from business operations before investments in January – March was EUR -0.1 million (EUR -2.0 million). Trade receivables at the end of the reporting period were EUR 0.8 million (EUR 1.2 million). Net financial items amounted to EUR 0.2 million (EUR 0.4 million).
At the end of March the equity ratio was -148.7 percent (7.1 %) and equity per share was EUR -0.012 (EUR -0.002). The equity ratio including capital loans was -102.5 percent (23.4 %). At the end of the reporting period, the Group’s liquid assets totaled EUR 0.2 million (EUR 0.3 million) and unused export credit limits and bank guarantee limits amounted to EUR 0.0 million (EUR 0.5 million).
The financing situation of Valoe continues to be very tight. The company has reviewed different options for its short-term and long-term financing and for ensuring the company’s strategy to be materialized as planned. Valoe has begun negotiations with domestic and international investors to find an arrangement for its financing. The negotiations, where an investment bank in London assists Valoe are going on.
On 17 March 2015 Valoe announced that it postpones the targeted schedule for signing of the first manufacturing partnership agreement and the long-term financing negotiations from the end of the first quarter of 2015 to the second quarter. Negotiations for manufacturing partnership agreements, deliveries of production lines, strategic deliveries of solar modules and long-term financing arrangement continue as usual and the company continues focusing on finding an overall solution as soon as possible.
Valoe’s financing situation continues to be very tight. Very significant risks are involved in sufficiency of Valoe’s working capital for the next twelve months. Valoe’s management views that the company requires bridging financing until long-term financing arrangement has been secured and the cash flow from the business operations of the company has turned positive. The company is also having ongoing negotiations for arranging short-term bridging financing. The company continues to have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed to secure sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized.
Valoe has agreed to sell its electronics automation business to FTTK. The business transaction generated working capital to the company but decrease in the company’s financing limits agreed at the sale reduced the transaction’s positive effects on the company’s working capital. Only 70 percent of the transaction has been closed so far.
In terms of the short-term financing of the company, Valoe’s preliminary object is to turn the cash flow before investments with the company's current cost structure into profit as soon as possible.
Should there be delays in getting new orders or should the market conditions weaken compared to the company’s current view, changing orders into sales may slow down and have a major impact in the schedule in which the cash flow of the business operations turns positive. In such case the financing situation of the company would further tighten if all or part of the other on-going financing negotiations would not have been materialized by then.
Another object relating to short-term financing is to obtain bridging loan for the company until the aforesaid long-term financing has been secured. In the company’s view a bridging loan together with cash flow of business operations before investments turning positive would ensure sufficiency of financing for the next twelve months or until long-term financing arrangement has been concluded.
Valoe has agreed with Danske Bank Plc on extending the overdraft facility of EUR 0.95 million available to the company until 30 September 2015. The export credit limit and the bank guarantee limit have expired. For the moment Valoe does not have significant number of projects which would require export credit limits and bank guarantee limits. In the future Valoe is aiming to have necessary export credit limits and bank guarantee limits available when the company has signed new export contracts. Valoe has agreed with Savcor Group Oy on extending the loan period of a convertible bond of ca. EUR 0.364 million until 30 September 2015, with SCI Invest Oy on extending the loan period of a convertible bond of ca. EUR 0.746 million until 30 September 2015, and with Savcor Invest B.V. on extending the loan period of a loan of EUR 1.0 million until 30 September 2015.
Very significant risks are involved in sufficiency of Valoe’s working capital for the next twelve months. In Valoe’s current view, due to decrease in the financing limits from Danske Bank the company requires more bridging financing until long-term financing arrangement has been secured and the cash flow from the business operations of the company has turned positive. The company continues to have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive 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 prepared under the going concern assumption. The continuity of operations requires the company to be able to obtain supplementary funding and to negotiate changes to the terms of payment during 2015. The company continues negotiating with its major financers and shareholders on measures to strengthen the financing situation until the company’s cash flow is expected to turn positive. The sufficiency of the company’s financing and working capital for the next twelve months involve very significant risks. According to the current view of Valoe’s management the company needs to obtain a bridging loan until long-term financing arrangement has been secured and the cash flow of the business operations of the company has turned positive. Negotiations for bridging financing are going on. The company will have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed in securing sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized. The valuation of the assets is based on the going concern assumption. If the estimates are not achieved the assets may become impaired.”
If the company does not succeed to secure sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized.
RESEARCH AND DEVELOPMENT
The Group’s research and development costs during the January – March period amounted to EUR 0.3 million (EUR 0.4 million) or 127.9 (17.2) percent of net sales. The research and development costs of the Group’s continuing operations during the January – March period totaled EUR 0.3 million (EUR 0.2 million) or 262.3 (30.8) percent of net sales.
INVESTMENTS
Gross investments in the continuing operations during the January – March period amounted to EUR 0.04 million (EUR 0.1 million). Almost all of the investments on the reporting period and all of the investments on the corresponding period were in development costs.
PERSONNEL
At the end of March the Group employed 26 (144) people, out of which 21 persons worked in Finland, 3 persons in China and 2 persons in the USA. During the reporting period the Group’s salaries and fees totaled EUR 0.4 million (EUR 1.2 million).
SHARES AND SHAREHOLDERS
Valoe’s share capital amounted to EUR 3,425,059.10 at the end of the reporting period. The number of shares was 862,472,136. The company has one series of shares, which confer equal rights in the company. Valoe did not own any of its own shares at the end of the reporting period.
The company had a total of 6,184 shareholders at the end of March 2015, and 0.6 percent of the shares were owned by foreigners. The ten largest shareholders held 79.9 percent of the company’s shares and voting rights on 31 March 2015.
The largest shareholders on 31 March 2015
shares percent
1 SAVCOR GROUP OY 328 451 387 38,08
2 SAVCOR GROUP LIMITED 133 333 333 15,46
3 GASELLI CAPITAL OY 95 000 000 11,01
4 KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA 63 673 860 7,38
5 SAVCOR INVEST B.V. 39 374 994 4,57
6 FRATELLI OY 9 223 250 1,07
7 SCI INVEST OY 6 870 645 0,80
8 HUHTALA KAI 4 787 500 0,56
9 NORDEA PANKKI SUOMI OYJ 4 476 035 0,52
10 VUORENMAA TIMO ANTERO 3 859 860 0,45
Others 173 421 272 20,10
TOTAL 862 472 136 100,00
The members of the Board of Directors and the President and CEO, either directly or through companies under their control, held a total of 469,697,026 shares in the company on 31 March 2015, representing about 54.5 percent of the company’s shares and voting rights. Iikka Savisalo, Valoe’s Managing Director, either directly or through companies under his control, held a total of 374,697,026 shares in the company and 15,852,856 options connected to bond I/2012.
The price of Valoe’s share varied between EUR 0.007 and 0.01 during the January – March period. The average price was EUR 0.009 and the closing price at the end of March EUR 0.008. A total of 31.7 million Valoe shares were traded at a value of EUR 0.3 million during the January – March period. The company’s market capitalization at the end of March stood at EUR 6.9 million.
No share options were granted to the company’s management during the reporting period. On 31 March 2015, the company hold 15,852,856 options connected to bond I/2012 with subscription period ended on 7 December 2014. Options connected to bond I/2012 are held by SCI Invest Oy and Savcor Group Oy. On 31 March 2015 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
At the extraordinary general meeting held on 29 April 2015 the Board of Directors was authorized to decide on a share issue of max. 900,000,000 shares to enable the company to realize its financial arrangements fast after financial negotiations have been finished. Simultaneously the general meeting revoked all previous authorizations.
THE MAJOR EVENTS ON THE REPORTING PERIOD
The events presented below comprise a summary of the stock exchange releases as they were disclosed by the company on the reporting period. Thus the trade name Cencorp is still used in the texts even though the company’s trade name was changed to Valoe on 13 May 2015 and tenses refer to the time of disclosure.
16.2. 2015: WRITE-DOWNS IN THE ASSETS RELATED TO THE FACTORY IN BEIJING
In the reporting period January – December 2014 a write-down of totally EUR 6.2 million was made in the continuing operations in the fixed assets and inventories of the Beijing factory. On 20 August 2014 the Board of Directors of the company decided to make a write-down of EUR 3.2 million in the assets related to the factory and the production machinery in Beijing and transferred the CBS production to its factory in Mikkeli. As Cencorp has not been able to find a buyer for the production of RFID components and flexible electronics for mobile phones who could utilize the technology in its production the company made another write-down of EUR 3.0 million in the assets related to its factory in Beijing in the Financial Statement for 2014. After the write-downs the value of the Beijing factory has been fully written down. However, despite the write-down Cencorp continues to take actions to sell the technology and production machinery related to the production of RFID components and flexible electronics for mobile phones.
19.2.2015: THE SHARES OF CENCORP CORPORATION TO OBSERVATION SEGMENT
Cencorp Corporation published on 18 February 2015 a Financial Statement Release 2014. On the grounds of the Financial Statement Release there is a material adverse uncertainty in respect of the company’s financial position. Nasdaq Helsinki transfers the shares of Cencorp Corporation to the Observation segment on the grounds of the Rules of the Exchange (rule 2.2.8.2 article (vi)). Rules of the Exchange rule 2.2.8.2 article (vi): "There is a material adverse uncertainty in respect of the company’s financial position." The purpose of the observation segment is to alert the market to special facts and circumstances or actions pertaining to the subject issuer or security. The observation segment is a subset of the Official List.
2.3.2015: CHANGE IN THE SCHEDULE FOR THE EXECUTION OF THE SHARE TRANSFER AGREEMENT BETWEEN FTTK AND CENCORP FOR THE REMAINING 30 PERCENT OF ALL THE SHARES IN CENCORP AUTOMATION OY
On 2 March 2015 Cencorp announced that it has previously estimated that the share transfer of the remaining 30 percent of all the shares in Cencorp Automation Oy between FTTK Company Limited (”FTTK”) and Cencorp will be completed by 1 March 2015. The entire purchase price has been paid but the closing of the transaction has been postponed. The change in the schedule relates to division of costs of an unfinished customer project in electronics automation business between Cencorp and FTTK. The parties are aiming to close the transaction as soon as possible.
17.3.2015: THE ESTIMATED REALIZATION OF CENCORP’S FINANCING NEGOTIATIONS AND THE FIRST MANUFACTURING PARTNERSHIP AGREEMENT WILL BE POSTPONED TO THE SECOND QUARTER – THE COMPANY’S FINANCING SITUATION CONTINUES TO BE VERY TIGHT
On 17 March 2015 Cencorp announced that it has previously estimated that the company’s long-term financing arrangement will be secured during the first quarter of 2015, and that the schedule of the long-term financing negotiations will be highly depended on whether the company succeeds to sign its first manufacturing partnership agreement on solar module manufacturing technology during the first quarter of 2015. Further, Cencorp has previously stated that should the signing of the first manufacturing partnership agreement be delayed the long-term financing arrangement will be delayed too and the company will have to seek for bridge financing, and it is not yet secured that the company succeeds in securing bridge financing by the end of the first quarter.
It is still possible to sign the first manufacturing partnership agreement and to get a relating order by the end of the first quarter, but the company views that it is no longer probable that the company is able to secure project financing for an order in this schedule. Thus the company postpones the targeted schedule for signing of the first manufacturing partnership agreement and the long-term financing negotiations from the end of the first quarter of 2015 to the second quarter. Negotiations for manufacturing partnership agreements, deliveries of production lines, strategic deliveries of solar modules and long-term financing arrangement continue as usual and the company continues focusing on finding an overall solution as soon as possible.
Cencorp’s financing situation continues to be very tight. Very significant risks are involved in sufficiency of Cencorp’s working capital for the next twelve months. Cencorp’s management views that the company requires bridging financing until long-term financing arrangement has been secured and the cash flow from the business operations of the company has turned positive. The company is also having ongoing negotiations for arranging bridging financing. The company continues to have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed to secure sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized.
25.3.2015: CENCORP POSTPONES THE RELEASE OF ITS ANNUAL REPORT
In Cencorp’s stock exchange release regarding the financial information in 2015 the company announced that it will release its official annual report for 2014 today on 25 March 2015. Cencorp’s Board of Directors has resolved to postpone the release of the annual report because an Auditor’s report is not yet available. The annual report has to be released by 31 March 2015. The annual report figures are not expected to change from the Financial Statement Release issued on 18 February 2015.
31.3.2015: CENCORP HAS APPLIED FOR EXEMPTION PERMIT FROM THE FINNISH FINANCIAL SUPERVISORY AUTHORITY TO THE DEADLINE OF THE DISCLOSURE OF THE FINANCIAL STAMENT AND THE REPORT OF THE BOARD OF DIRECTORS
Pursuant to Chapter 7, Section 18, Subsection 2 of the Finnish Securities Market Act Cencorp has applied for an exemption permit from the Finnish Financial Supervisory Authority to the deadline of the disclosure of the Financial Statement and the Report of the Board of Directors to disclose its Financial Statement and the Report of the Board of Directors for the financial period ended on 31 December 2014 latest on 30 April 2015 instead of the deadline of three months pursuant to Chapter 7, Section 5 of the Finnish Securities Market Act. The Finnish Financial Supervisory Authority granted Cencorp an exemption permit pursuant to the company’s application and Cencorp disclosed its Financial Statement and the Report of the Board of Directors on 30 April 2015.
31.3.2015: CENCORP HAS AGREED WITH DANSKE BANK PLC ON AMENDMENT OF THE OVERDRAFT FACILITY, AND ON EXPIRY OF THE EXPORT CREDIT LIMIT AND THE BANK GUARANTEE LIMIT; AND WITH SAVCOR GROUP OY, SAVCOR INVEST BV AND SCI INVEST OY ON TRANSFERRING THE LOAN MATURITY DATES
Cencorp has agreed with Danske Bank Plc on extending the overdraft facility of EUR 0.95 million available to the company until 30 September 2015. The export credit limit and the bank guarantee limit have expired. For the moment Cencorp does not have significant number of projects which would require export credit limits and bank guarantee limits. In the future Cencorp is aiming to have necessary export credit limits and bank guarantee limits available when the company has signed new export contracts. On 19 March 2015 Cencorp announced that it postpones the targeted schedule for signing the first manufacturing partnership agreement from the end of the first quarter of 2015 to the second quarter. Cencorp has agreed with Savcor Group Oy on extending the loan period of a convertible bond of ca. EUR 0.364 million until 30 September 2015, with SCI Invest Oy on extending the loan period of a convertible bond of ca. EUR 0.746 million until 30 September 2015, and with Savcor Invest B.V. on extending the loan period of a loan of EUR 1.0 million until 30 September 2015.
THE MAJOR EVENTS AFTER THE END OF THE REPORTING PERIOD
The events presented below comprise a summary of the stock exchange releases as they were disclosed by the company after the end of the reporting period. Thus the trade name Cencorp is still used in the texts even though the company’s trade name was changed to Valoe on 13 May 2015 and tenses refer to the time of disclosure.
7.4.2015: CENCORP POSTPONES ITS ANNUAL GENERAL MEETING TO BE HELD LATER ON AND GIVES A NOTICE TO AN EXTRAORDINARY GENERAL MEETING TO BE HELD ON 29 APRIL 2015 TO HANDLE THE BOARD’S PROPOSALS FOR CHANGING THE COMPANY’S NAME TO VALOE OYJ, AMENDING THE COMPANY’S LINE OF BUSINESS TO CLEAN ENERGY AND FOR AUTHORIZATION FOR SHARE ISSUE
Deviating from the previously announced, Cencorp’s Board of Directors has today resolved to postpone the annual general meeting to be held later on. As previously announced an annual general meeting was supposed to be held on 29 April 2015. The reason for postponing the meeting is that the company’s financial statement for the financial year 2014 is not yet available. The Finnish Financial Supervisory Authority has granted Cencorp an exemption permit to deviate from the deadline of the disclosure of the Financial Statement and the Report of the Board of Directors pursuant to the Finnish Securities Market Act. According to the exemption permit, Cencorp has to publish the Financial Statement and the Report of the Board of Directors on 30 April 2015 at latest.
Cencorp’s Board of Directors has today resolved to give a notice to an extraordinary general meeting to be held on 29 April 2015 to handle the following proposals:
1. Amendment to the Articles of Association, article 1 The trading name and domicile of the company
The Board of Directors proposes to the general meeting that the Article 1 in the company’s Articles of Association is amended as follows: ”1§ The trading name and domicile of the company: The trading name of the company is Valoe Oyj, Valoe Abp in Swedish and Valoe Corporation in English. The company’s domicile is Mikkeli.”
The trading name change is based on Cencorp Corporation’s commitment to change its trading name pursuant to the agreement between Cencorp and FTTK Company Limited regarding the automation applications business transaction. Further, the Board of Directors views that the trading name Valoe describes well the company’s clean energy business.
Cencorp Corporation’s shareholders Savcor Group Oy and Gaselli Capital Oy, representing ca. 49 percent of the shares in the company, have notified that they will second the Board’s motion.
2. Amendment to the Articles of Association, article 2 The company’s line of business
The Board of Directors proposes to the general meeting that the article 2 in the company’s Articles of Association is amended as follows: “2§ The company’s line of business: The company’s line of business is to develop, sell and manufacture industrial applications and solutions for clean energy production. The company may also own and be in possession of real estate property and securities.”
The amendment to the company’s line of business is based on Cencorp’s transition from a company who used to provide electronics automation solutions and special components to a company providing only clean energy solutions.
Cencorp Corporation’s shareholders Savcor Group Oy and Gaselli Capital Oy, representing ca. 49 percent of the shares in the company, have notified that they will second the Board’s motion.
3. Amendment to the Articles of Association, article 4 Board of Directors
The Board of Directors proposes to the general meeting that the article 4 in the company’s Articles of Association is amended as follows: ”4§ Board of Directors: The company’s administration and appropriate activity shall be attended to by a Board of Directors with at least three and no more than seven members. The term of notice of the members of the Board of Directors shall end with the ending of the next annual general meeting of the company following their election. The Board of Directors shall elect a chairman and a vice chairman among the board members. The Board of Directors has a quorum when more than half of the members of the Board are present at a meeting. Issues are decided by majority rule. In case of equality of votes the chairman has a casting vote.“
The amendment to the maximum number of Directors is based on the fact that in the future Cencorp may require wider base for the Board of Directors.
Cencorp Corporation’s shareholders Savcor Group Oy and Gaselli Capital Oy, representing ca. 49 percent of the shares in the company, have notified that they will second the Board’s motion.
4. Technical amendment to the numbering of the articles 12 and 13 in the Articles of Association
The Board of Directors proposes to the general meeting that the article regarding the company’s financial year, currently number 13, will be changed to an article number 12 and the current article 12 saying “Removed” will be totally removed from the Articles of Association. Thus, in the future there would be only 12 articles in the company’s Articles of Association.
The reason for the technical change is to make the Articles of Association and its numbering clearer.
Cencorp Corporation’s shareholders Savcor Group Oy and Gaselli Capital Oy, representing ca. 49 percent of the shares in the company, have notified that they will second the Board’s motion.
5. Authorization of the Board of Directors to decide on a share issue as well as other option rights and other special rights entitling to shares in the company
The Board of Directors proposes to the General Meeting, that by revoking the previous authorizations the general meeting authorizes the Board of Directors to decide on a share issue with and/or without payment, either in one or in several occasions, including right to resolve on option rights and other rights entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish Companies Act so that the number of new shares issued based on the authorization or number of shares issued based on option rights and other special rights entitling to the shares pursuant to the Chapter 10, Section 1 of the Finnish companies Act, would equal to the total amount of max. 900,000,000 shares which equals to ca. 51.1 percent, at the most, of all shares in the company including shares issued based on the authorization and/or shares to be issued based on option rights and other special rights entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. The authorization does not exclude the Board’s right to decide also on directed issue of shares or option rights and other special rights pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. It is proposed that the authorization may be used for important arrangements from the company’s point of view e.g. to strengthen the capital structure, to finance investments, for acquisitions and business transactions or other business arrangements, or to expand ownership structure, or for incentive plans, or for other purposes resolved by the Board involving a weighty financial reason for issuing shares or option rights or special rights entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. The share issue may be executed by deviating from the shareholders' pre-emptive subscription right provided the company has a weighty financial reason for that. It is proposed that the authorization is in force until 30 June 2017.
In addition to the previous, the purpose for the authorization is especially to enable the company to carry out financial arrangements fast after financial negotiations have been concluded.
Cencorp Corporation’s shareholders Savcor Group Oy and Gaselli Capital Oy, representing ca. 49 percent of the shares in the company, have notified that they will second the Board’s motion.
The extraordinary general meeting held 29 April 2015 adopted the resolutions according to the motions of the Board of Directors. Cencorp’s new trade name Valoe Corporation was registered on the trade register on 13 May 2015.
29. 4.2015: CENCORP BOOKS AN ADDITIONAL EXPENCE AND MAKES A WRITE-DOWN IN THE PARENT COMPANY’S FINANCIAL STATEMENTS 31.12.2014 – THE COMPANY’S EQUITY DECEREASES BELOW HALF OF THE SHARE CAPITAL. THE BOOK ENTRIES HAVE NO INFLUENCE IN THE FIGURES OF THE PUBLISHED CONSOLIDATED FINANCIAL STATEMENTS
Cencorp has resolved to write down the value of the shares of its subsidiary Savcor Pacific Ltd (”Pacific”) in the financial statements for 2014. Pacific owns the shares of the Beijing company. As the process of selling the machinery and equipment of the closed Beijing factory is still going on, the company writes down the value of Pacific according to the prudence principle. Further, according to the prudence principle the company books a guarantee liability relating to the Beijing factory as an additional expense and parent company’s liability. According to the company’s current view the guarantee liability will not realize. The book entries do not change the consolidated financial statements figures in the Financial Statement Release published on 18 February 2015.
Due to the above mentioned facts Cencorp’s equity decreases below half of the share capital as on 31 December 2014. Thus, the Board of Directors will convene a general meeting to consider measures to remedy the financial position of the company. The matter will be handled in the annual general meeting to which a notice will be published later on a separate announcement.
In practice Cencorp has already commenced measures to remedy the financial position of the company. In the extraordinary general meeting to be held today on 29 April 2015 the Board of Directors proposes to the general meeting that it gives an authorization for a share issue of max. 900,000,000 e.g. to enable the company to realize its financial arrangements fast after financial negotiations have been finished.
A notice to an annual general meeting to be held on 28 May 2015 was disclosed on 6 May 2015 and it included the following items in addition to the items pursuant to the Articles of Association:
Item 15 in the Notice: Reduction of the share capital to cover losses
The Board of Directors proposes to the general meeting that the meeting resolves to reduce the company’s share capital of EUR 3,425,059.10 by EUR 2,925,059.10 to cover losses. The accrued losses from the financial year ended on 31 December 2014 and the previous financial years would be partly covered by reducing the company’s share capital by EUR 2,925,059.10 and the distributable non‐restricted equity fund by EUR 44,031,988.69, the reserve fund by EUR 211,384.16 and the premium fund by EUR 4,695,570.81. After the reductions the company’s new share capital would be EUR 500,000.00. The company’s accrued losses on 31 December 2014 amounted to EUR 54,384,334.28. The reductions would be allocated to the losses in chronological sequence starting from the oldest one. The equity of the company including the subordinated loans amounted to EUR 1,189.342.86 or ca. 34.7 percent of the share capital on 31 December 2014. The company’s subordinated loans amounted to EUR 3,209,674.38 on 31 December 2014.
During the three years following the registration of the reduction of the share capital the equity may be distributed to the shareholders only in accordance with the creditor protection procedure pursuant to the Chapter 14, sections 3 – 5 of the Finnish Companies Act (21.7.2006/624, amendments included).
A reason for the reduction of the share capital is that covering the losses according to the Board’s proposal would simplify the balance sheet structure of the parent company and strengthen the ratio of the company’s equity to the share capital. The proposal is subject to the general meeting has been adopting the financial statements pursuant to the section 7 of this Notice to the General Meeting and the loss for the financial year 2014 to be entered in the retained earnings pursuant to the section 8 of the Notice.
Item 16 in the Notice: Evaluation of the company’s financial situation and measures to remedy the company’s financial position
The equity of the parent company (including subordinated loans) amounted to EUR 1,189,34.86 or 34.7 percent of the share capital as per 31 December 2014. Thus, the parent company’s equity has decreased below half of the share capital. In the section 15 of this Notice to the General Meeting the Board of Directors has separately proposed that the ratio of the company’s equity to the share capital will be strengthened by reducing the share capital for loss coverage pursuant to the Board’s proposal.
In practice Cencorp has already commenced measures to remedy the financial position of the company. In the extraordinary general meeting held on 29 April 2015 the Board of Directors was authorized to decide on a share issue of max. 900,000,000 shares to enable the company to finalize its financial arrangements fast after financial negotiations have been finished. On this date of this Notice to the General Meeting the company’s financial negotiations are still going on.
The Board of Directors proposes that the general meeting addresses the company’s financial situation and considers other possible measures to remedy the company’s financial position too.
30.4.2015: THE AUDITORS’S REPORT OF CENCORP
Cencorp’s auditor has today given his report for the company’s Financial Statements for 2014.
The Auditor’s report includes so called emphasis of matter.
Auditor’s report
To the Annual General Meeting of Cencorp Oyj
We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Cencorp Oyj for the year ended 31 December, 2014. The financial statements comprise the consolidated statement of financial position, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company’s balance sheet, income statement, cash flow statement and notes to the financial statements.
Responsibility of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company’s accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion on the consolidated financial statements
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Opinion on the company’s financial statements and the report of the Board of Directors
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Emphasis of Matter
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 prepared under the going concern assumption. The continuity of operations requires the company to be able to obtain supplementary funding and to negotiate changes to the terms of payment during 2015. The company continues negotiating with its major financers and shareholders on measures to strengthen the financing situation until the company’s cash flow is expected to turn positive. The sufficiency of the company’s financing and working capital for the next twelve months involve very significant risks. According to the current view of Cencorp’s management the company needs to obtain a bridging loan until long-term financing arrangement has been secured and the cash flow of the business operations of the company has turned positive. Negotiations for bridging financing are going on. The company will have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed in securing sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized. The valuation of the assets is based on the going concern assumption. If the estimates are not achieved the assets may become impaired.
30.4.2015: CENCORP POSTPONES THE DISCLOSURE OF THE INTERIM REPORT FOR THE FIRST QUARTER
Cencorp has resolved to postpone the disclosure of the interim report for the first quarter. The interim report was supposed to be disclosed on 6 May 2015. The new disclosure day will be 27 May 2015. The disclosure is postponed because the company’s Financial Statements were released only today on 30 April 2015.
RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Valoe’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, Valoe does not have an internal auditing organization or an audit committee.
The financing situation of Valoe continues to be very tight. The sufficiency of the company’s financing and working capital for the next twelve months involve very significant risks. According to the current view of Valoe’s management the company needs to obtain a bridging loan until a long-term financing arrangement has been secured and the cash flow from the business operations of the company has turned positive. Negotiations for a bridging financing are going on. The company will have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed to secure sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized.
In the Auditor’s Report in the Annual Report 2014 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 prepared under the going concern assumption. The continuity of operations requires the company to be able to obtain supplementary funding and to negotiate changes to the terms of payment during 2015. The company continues negotiating with its major financers and shareholders on measures to strengthen the financing situation until the company’s cash flow is expected to turn positive. The sufficiency of the company’s financing and working capital for the next twelve months involve very significant risks. According to the current view of Valoe’s management the company needs to obtain a bridging loan until long-term financing arrangement has been secured and the cash flow of the business operations of the company has turned positive. Negotiations for bridging financing are going on. The company will have a significant deficit in its working capital until the first delivery of production technology for solar modules will start to generate positive cash flow. If the company does not succeed in securing sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized. The valuation of the assets is based on the going concern assumption. If the estimates are not achieved the assets may become impaired.”
If the company does not succeed to secure sufficient short-term and long-term financing, the continuity of the company’s operation may be jeopardized.
Valoe has agreed with Danske Bank Plc on extending the overdraft facility of EUR 0.95 million available to the company until 30 September 2015. The export credit limit and the bank guarantee limit have expired. For the moment Valoe does not have significant number of projects which would require export credit limits and bank guarantee limits. In the future Valoe is aiming to have necessary export credit limits and bank guarantee limits available when the company has signed new export contracts. On 19 March 2015 Valoe announced that it postpones the targeted schedule for signing the first manufacturing partnership agreement from the end of the first quarter of 2015 to the second quarter. Valoe has agreed with Savcor Group Oy on extending the loan period of a convertible bond of ca. EUR 0.364 million until 30 September 2015, with SCI Invest Oy on extending the loan period of a convertible bond of ca. EUR 0.746 million until 30 September 2015, and with Savcor Invest B.V. on extending the loan period of a loan of EUR 1.0 million until 30 September 2015.
On 17 March 2015 Valoe announced that it has previously estimated that the company’s long-term financing arrangement will be secured during the first quarter of 2015, and that the schedule of the long-term financing negotiations will be highly depended on whether the company succeeds to sign its first manufacturing partnership agreement on solar module manufacturing technology during the first quarter of 2015. Further, Valoe has previously stated that should the signing of the first manufacturing partnership agreement be delayed the long-term financing arrangement will be delayed too and the company will have to seek for bridge financing. Due to this Valoe has previously announced that the company postpones the targeted schedule for signing of the first manufacturing partnership agreement and the long-term financing negotiations from the end of the first quarter of 2015 to the second quarter. Negotiations for manufacturing partnership agreements, deliveries of production lines, strategic deliveries of solar modules and long-term financing arrangement continue as usual and the company continues focusing on finding an overall solution as soon as possible.
The equity of Valoe Corporation decreased below half of the company’s share capital as per 31 December 2014. The parent company’s equity will not be sufficient for long without equity financing or significant profitable sales. The company has already taken actions to get more equity financing. However, it is not certain that the company succeeds in securing sufficient financing.
Should there be delays in signing contracts for clean energy solutions in planned schedule, it could have significant negative effect on the company’s financing situation and continuity of operations.
In terms of profitability, the most essential risks are related to the achievement of a sufficient invoicing volume in the Clean Energy business segment.
Valoe has announced that its objective is to transform 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 Valoe'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. Valoe'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 Valoe's short-term and long-term financing. Thus, Valoe is not yet able to estimate the agreement's possible execution, effective date neither the agreement's impact in Valoe 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 Valoe 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 and especially to Valoe's short- and long-term financing. Therefore, Valoe is not yet able to estimate possible realization and effective date of the transactions, the transactions' influence in Valoe or risks relating to them.
The long-term objectives set for the Managing Director involves also significant 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 new timetable. If Valoe’s financing arrangements are delayed, the risk of the Managing Director reaching the objectives set for him in the stated timetable will increase.
The non-binding objectives of Valoe for both market share and the number of partners are ambitious and attainment of the objectives involves significant risks. However, Valoe views it has a technological concept that provides the company a good position to achieve the objectives. Attainment of the objectives is subject to sufficient financing.
The closing of the latter part (30 %) of the transaction between Valoe and FTTK Company Limited involves risks. In terms of the latter part of the transaction the deal was supposed to be closed by 1 March 2015, however, the closing of the transaction has been postponed. The postponement relates to division of costs of an unfinished customer project in electronics automation business between Valoe and FTTK. Valoe continues trying to settle the matter by negotiating but it is not certain whether a solution will be reached without going to court.
Other risks connected to Valoe have been presented in more detail in the Annual Report for 2014.
In Mikkeli, 27 May 2015
Valoe Corporation
BOARD OF DIRECTORS
For more information please contact:
Valoe: Iikka Savisalo, President and CEO, tel. +358 40 521 6082, iikka.savisalo@valoe.com
Distribution:
NASDAQ OMX, Helsinki
Main media
www.valoe.com
Consolidated statement of comprehensive income | ||||
(unaudited) | ||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | |
Continuing operations | ||||
Net sales | 126 | 567 | 841 | |
Cost of sales | -165 | -1 047 | -8 398 | |
Gross profit | -39 | -480 | -7 557 | |
Other operating income | 751 | 10 | 23 | |
Product development expenses | -330 | -174 | -1 109 | |
Sales and marketing expenses | -161 | -215 | -840 | |
Administrative expenses | -239 | -345 | -1 146 | |
Other operating expenses | -2 | -12 | -256 | |
Operating profit | -20 | -1 217 | -10 885 | |
Financial income | 121 | 96 | 903 | |
Financial expenses | -275 | -503 | -1 707 | |
Profit before taxes from continuing operations | -175 | -1 625 | -11 689 | |
Income taxes | 1 | -1 | -4 | |
Profit/loss for the period from continuing operations | -174 | -1 625 | -11 693 | |
Discontinued operations | ||||
Profit/loss after tax for the period from discontinued operations | 20 | -512 | -712 | |
Profit/loss for the period | -154 | -2 137 | -12 405 | |
Profit/loss attributable to: | ||||
Shareholders of the parent company | -154 | -2 137 | -12 405 | |
Earnings/share (diluted), eur | -0,0002 | -0,003 | -0,015 | |
Earnings/share (basic), eur | -0,0002 | -0,003 | -0,015 | |
Continuing operations: | ||||
Earnings/share (diluted), eur | -0,0002 | -0,002 | -0,014 | |
Earnings/share (basic), eur | -0,0002 | -0,002 | -0,014 | |
Profit/loss for the period | -154 | -2 137 | -12 405 | |
Other comprehensive income | ||||
Translation difference | -464 | -98 | -1 114 | |
Net other comprehensive income to be reclassified to | ||||
profit or loss in subsequent periods | -464 | -98 | -1 114 | |
Total comprehensive income for the period | -618 | -2 235 | -13 519 | |
Total comprehensive income attributable to: | ||||
Shareholders of the parent company | -618 | -2 235 | -13 519 | |
Consolidated statement of financial position | ||||
(unaudited) | ||||
1 000 EUR | 31.3.2015 | 31.3.2014 | 31.12.2014 | |
ASSETS | ||||
Non-current assets | ||||
Property, plant and equipment | 8 | 5 126 | 44 | |
Consolidated goodwill | 441 | 2 538 | 441 | |
Other intangible assets | 3 907 | 5 269 | 4 092 | |
Available-for-sale investment | 9 | 9 | 9 | |
Deferred tax assets | 0 | 6 | 0 | |
Total non-current assets | 4 365 | 12 949 | 4 586 | |
Current assets | ||||
Inventories | 49 | 2 284 | 67 | |
Trade and other non-interest-bearing receivables | 1 913 | 2 316 | 2 013 | |
Cash and cash equivalents | 225 | 283 | 161 | |
Total current assets | 2 188 | 4 884 | 2 240 | |
Assets classified as held for sale | 564 | 0 | 733 | |
Total assets | 7 117 | 17 832 | 7 560 | |
EQUITY AND LIABILITIES | ||||
Equity attributable to shareholders of the parent company | ||||
Share capital | 3 425 | 3 425 | 3 425 | |
Other reserves | 49 460 | 49 325 | 49 460 | |
Translation difference | -745 | 734 | -281 | |
Retained earnings | -62 654 | -52 232 | -62 500 | |
-10 515 | 1 252 | -9 897 | ||
Non-controlling interests | 9 | 0 | 8 | |
Total equity | -10 506 | 1 252 | -9 888 | |
Non-current liabilities | ||||
Non-current loans | 1 699 | 3 205 | 1 571 | |
Deferred tax liabilities | -1 | 5 | 0 | |
Total non-current liabilities | 1 698 | 3 210 | 1 571 | |
Current liabilities | ||||
Current interest-bearing liabilities | 7 405 | 5 462 | 7 357 | |
Trande and other payables | 7 454 | 7 776 | 6 693 | |
Current provisions | 0 | 132 | 0 | |
Total current liabilities | 14 860 | 13 370 | 14 050 | |
Liabilities directly associated with assets classified as held for sale | 1 065 | 0 | 1 828 | |
Total liabilities | 17 623 | 16 580 | 17 449 | |
Equity and liabilities total | 7 117 | 17 832 | 7 560 | |
Consolidated statement of cash flows | |||||
(unaudited) | |||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | ||
Cash flow from operating activities | |||||
Income statement profit/loss from continuing operations before taxes | -175 | -1 625 | -11 689 | ||
Income statement profit/loss from discontinued operations before taxes | 20 | -512 | -712 | ||
Income statement profit/loss before taxes | -155 | -2 137 | -12 401 | ||
Non-monetary items adjusted on income statement | |||||
Depreciation and impairment | + | 224 | 552 | 7 844 | |
Gains/losses on disposals of non-current assets | +/- | 0 | 0 | -298 | |
Unrealized exchange rate gains (-) and losses (+) | +/- | -118 | 41 | -256 | |
Other non-cash transactions | +/- | -739 | 109 | 87 | |
Financial income and expense | + | 273 | 367 | 1 060 | |
Total cash flow before change in working capital | -516 | -1 068 | -3 964 | ||
Change in working capital | |||||
Increase (-) / decrease (+) in inventories | 46 | -93 | 179 | ||
Increase (-) / decrease (+) in trade and other receivables | 978 | 185 | 289 | ||
Increase (+) / decrease (-) in trade and other payables | -523 | -889 | -516 | ||
Change in provisions | -11 | -17 | -5 | ||
Change in working capital | 490 | -815 | -53 | ||
Adjustment of financial items and taxes to cash-based accounting | |||||
Interest paid | - | 56 | 102 | 308 | |
Interest received | + | 1 | 0 | 3 | |
Other financial items | - | 28 | 53 | -304 | |
Taxes paid | - | 0 | 3 | 17 | |
Financial items and taxes | -82 | -158 | -17 | ||
NET CASH FLOW FROM BUSINESS OPERATIONS | -108 | -2 040 | -4 034 | ||
CASH FLOW FROM INVESTING ACTIVITIES | |||||
Investments in tangible and intangible assets | - | 51 | 380 | 1 084 | |
Proceeds on disposal of tangible and intangible assets | + | 34 | 0 | 29 | |
Loans granted | - | 160 | 0 | 0 | |
Loans granted to associated companies | - | 0 | 0 | 103 | |
Repayment of loan receivables | + | 263 | 0 | 0 | |
Acquisition of subsidiaries and other business units | + | 0 | 0 | 1 | |
Disposal of subsidiaries and other business units | + | 0 | 0 | 3 048 | |
NET CASH FLOW FROM INVESTMENTS | 86 | -380 | 1 890 | ||
CASH FLOW FROM FINANCING ACTIVITIES | |||||
Proceeds from share issue | + | 0 | 2 375 | 2 400 | |
Proceeds from non-current borrowings | + | 121 | 98 | 256 | |
Repayment of non-current borrowings | - | 8 | 4 | 7 | |
Proceeds from current borrowings | + | 106 | 1 810 | 3 737 | |
Repayment of current borrowings | - | 149 | 1 713 | 3 878 | |
NET CASH FLOW FROM FINANCING ACTIVITIES | 71 | 2 567 | 2 509 | ||
INCREASE (+) OR DECREASE (-) IN CASH FLOW | 48 | 147 | 364 | ||
Consolidated statement of changes in equity | ||||||||
(unaudited) | ||||||||
1 000 EUR | Share capital | Other reserves | Translation difference | Distributable non-restricted equity fund | Retained earnings | Total | Non-controlling interests | Total equity |
31.12.2014 | 3 425 | 4 908 | -281 | 44 552 | -62 500 | -9 897 | 8 | -9 888 |
Translation difference, comprehensive income | - | - | -464 | - | - | -464 | 1 | -463 |
Profit/loss for the period | - | - | - | - | -154 | -154 | 0 | -154 |
31.3.2015 | 3 425 | 4 908 | -745 | 44 552 | -62 654 | -10 515 | 9 | -10 506 |
1 000 EUR | Share capital | Other reserves | Translation difference | Distributable non-restricted equity fund | Retained earnings | Total | Non-controlling interests | Total equity |
31.12.2013 | 3 425 | 4 908 | 833 | 39 661 | -50 095 | -1 269 | 0 | -1 269 |
Share issue | - | - | - | 4 882 | - | 4 882 | - | 4 882 |
Share issue expenses | - | - | - | -125 | -125 | - | -125 | |
Translation difference, comprehensive income | - | - | -98 | -98 | - | -98 | ||
Profit/loss for the period | - | - | - | - | -2 137 | -2 137 | - | -2 137 |
31.3.2014 | 3 425 | 4 908 | 734 | 44 417 | -52 232 | 1 252 | 0 | 1 252 |
Segment information | |||||
(unaudited) | |||||
From 1 January 2013 Valoe reported of three business segments to comply with the company's Cleantech strategy. The segments were Laser and Automation Applications (LAS), Life Cycle Management (LCM) and Clean Energy (CCE). 17 September Valoe announced that it has transfered the company's electronics automation business into Cencorp Automation Oy, a fully-owned subsidiary of Valow. Further, in accordance to the agreement signed earlier, FTTK Company Limited has purchased 70 percent of the shares in Cencorp Automation Oy. Further FTTK has used its option to purchase the remaining 30 percent of the shares in Cencorp Automation Oy and the parties have signed an agreement on exercising the option in December 2014. In consequence of the sale of the shares Valoe reports the financial figures relating to the electronics automation business, i.e. LAS and LCM segments, as discontinued operations from Q3/2014 and segment information is divided into continuing and discontinued operations. Segment information is not available after operating profit in profit and loss statement. Financial income and expenses or balance sheet items are not booked to segments. Valoe's new segment information is based on the management's internal reporting and on the organisation structure. | |||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | ||
Net sales | |||||
Cencorp Clean Energy - continuing operations | 126 | 567 | 841 | ||
Discontinued operations | 132 | 1 869 | 5 665 | ||
Total | 258 | 2 436 | 6 506 | ||
Operating profit | |||||
Cencorp Clean Energy - continuing operations | -20 | -1 217 | -10 885 | ||
Discontinued operations | 20 | -512 | -712 | ||
Total | -1 | -1 729 | -11 597 | ||
EBITDA | |||||
Cencorp Clean Energy - continuing operations | 204 | -801 | -3 342 | ||
Discontinued operations | 20 | -376 | -411 | ||
Total | 224 | -1 177 | -3 753 | ||
Depreciation | |||||
Cencorp Clean Energy - continuing operations | 224 | 416 | 1 318 | ||
Discontinued operations | 0 | 136 | 301 | ||
Total | 224 | 552 | 1 619 | ||
Impairment | |||||
Cencorp Clean Energy - continuing operations | 0 | 0 | 6 225 | ||
Discontinued operations | 0 | 0 | 0 | ||
Total | 0 | 0 | 6 225 | ||
Discontinued operations | ||||
(unaudited) | ||||
17 September Valoe announced that it has transfered the company's electronics automation business into Cencorp Automation Oy, a fully-owned subsidiary of Valoe. Further, in accordance to the agreement signed earlier, FTTK Company Limited has purchased 70 percent of the shares in Cencorp Automation Oy. Further FTTK has used its option to purchase the remaining 30 percent of the shares in Cencorp Automation Oy and the parties have signed an agreement on exercising the option in December 2014. In consequence of the sale of the shares Valoe reports the financial figures relating to the electronics automation business as discontinued operations from Q3/2014. | ||||
The results and major classes of assets and liabilities of Cencorp's electronics automation business are as follows: | ||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | |
Revenue | 132 | 1 869 | 5 665 | |
Expenses | -113 | -2 422 | -6 824 | |
Other opeating income | 0 | 44 | 171 | |
Impairment | 0 | 0 | 0 | |
Operating profit/loss from discontinued operation | 20 | -508 | -988 | |
Gain on discontinued operations | - | - | 276 | |
Assets | ||||
Property, plant and equipment | 0 | - | 0 | |
Other intangible assets | 0 | - | 0 | |
Inventories | 0 | - | 28 | |
Trade and other non-interest-bearing receivables | 564 | - | 705 | |
Cash and cash equivalents | 0 | - | 0 | |
Assets classified as held for sale | 564 | n/a | 733 | |
Liabilities | ||||
Trande and other payables | 931 | - | 1 683 | |
Provisions | 134 | - | 145 | |
Liabilities directly associated with assets classified as held for sale | 1 065 | n/a | 1 828 | |
Net assets directly associated with disposal group | -501 | n/a | -1 094 | |
Cumulative translation difference | ||||
Net cash flow of Cencorp's electronics automation business: | ||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | |
Operating | -392 | n/a | -1 858 | |
Investing | 103 | n/a | 2 701 | |
(includes the return on sales of discontinued operations in 2014) | ||||
Earnings/share (basic), from discontinued operations | 0,00002 | -0,001 | -0,001 | |
Earnings/share (diluted) from discontinued operations | 0,00002 | -0,001 | -0,001 | |
Key figures | |||
(unaudited) | |||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 |
Net sales | 126 | 567 | 841 |
Operating profit | -20 | -1 217 | -10 885 |
% of net sales | -16,0 | -214,7 | n/a |
EBITDA | 204 | -801 | -3 342 |
% of net sales | 162,1 | -141,3 | n/a |
Profit before taxes | -175 | -1 625 | -11 689 |
% of net sales | -138,6 | -286,6 | n/a |
Balance Sheet value | 7 117 | 17 832 | 7 560 |
Equity ratio, % | -148,7 | 7,1 | -130,8 |
Net gearing, % | n/a | n/a | n/a |
Gross investments (continuing operations) | 41 | 99 | 377 |
% of net sales | 32,6 | 17,5 | 44,9 |
Research and development costs | 330 | 174 | 1 109 |
% of net sales | 262,3 | 30,8 | 131,8 |
Order book | 122 | 3 034 | 314 |
Personnel on average | 26 | 145 | 74 |
Personnel at the end of the period | 26 | 144 | 26 |
Non-interest-bearing liabilities | 8 386 | 7 776 | 8 376 |
Interest-bearing liabilities | 9 104 | 8 667 | 8 928 |
Share key indicators | |||
Earnings/share (basic) | -0,0002 | -0,003 | -0,015 |
Earnings/share (diluted) | -0,0002 | -0,003 | -0,015 |
Earnings/share (basic), from continuing operations | -0,0002 | -0,002 | -0,014 |
Earnings/share (diluted) from continuing operations | -0,0002 | -0,002 | -0,014 |
Equity/share | -0,012 | 0,002 | -0,011 |
P/E ratio | -44,70 | -3,70 | -0,61 |
Highest price | 0,010 | 0,04 | 0,04 |
Lowest price | 0,007 | 0,01 | 0,01 |
Average price | 0,009 | 0,02 | 0,02 |
Closing price | 0,008 | 0,01 | 0,01 |
Market capitalisation, at the end of the period, MEUR | 6,9 | 8,5 | 7,8 |
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) | ||||||
The Group has sold and 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. Valoe Corporation has also sold and purchased goods and services from its associated company, Cencorp Automation Oy. Sales of goods and services carried out with the associated company are based on the costs, according to the agreement. | ||||||
The Group entered into the following transactions with related parties: | ||||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | |||
Continuing operations | ||||||
Sales of goods and services | ||||||
Savcor companies | 17 | 14 | 67 | |||
Cencorp Automation Oy | 1 | 0 | 19 | |||
Savcor Face Ltd | 0 | 0 | 20 | |||
Others | 1 | 0 | 0 | |||
Total | 19 | 14 | 106 | |||
Purchases of goods and services | ||||||
Savcor companies | 55 | 58 | 196 | |||
Savcor Face Ltd | 8 | 6 | 36 | |||
SCI-Finance Oy | 19 | 0 | 14 | |||
Others | -1 | 0 | 0 | |||
Total | 81 | 64 | 246 | |||
Interest income | ||||||
Savcor companies | 1 | 0 | 3 | |||
Interest expenses and other financial expenses | ||||||
Savcor companies | 36 | 58 | 213 | |||
SCI Invest Oy | 15 | 15 | 60 | |||
Iikka Savisalo | 0 | 0 | 0 | |||
Total | 51 | 73 | 273 | |||
Discontinued operations | ||||||
Sales of goods and services | ||||||
Cencorp Automation Oy | 0 | 0 | 87 | |||
Purchases of goods and services | ||||||
Savcor companies | 0 | 61 | 194 | |||
Savcor Face Ltd | 0 | 12 | 46 | |||
Cencorp Automation Oy | 88 | 0 | 395 | |||
SCI-Finance Oy | 0 | 0 | 30 | |||
Others | 0 | 0 | 0 | |||
Total | 88 | 73 | 665 | |||
Interest payable to related parties | 264 | 230 | 416 | |||
Other current liabilities to related parties | 1 355 | 1 519 | 1 769 | |||
Current convertible subordinated loan from related parties | 1 195 | 1 049 | 1 159 | |||
Trade payables and other non-interest-bearing liabilities to | ||||||
related parties | 986 | 702 | 1 363 | |||
Trade and other current receivables from related parties | 163 | 87 | 371 | |||
From the beginnin of 2015 Savcor Group Limited in Australia is no longer part of Savcor Group, and liabilities to the company are not included in related party transactions. | ||||||
SCI Invest Oy is a company under control of Iikka Savisalo, Cencorp's CEO. | ||||||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 | |||
Wages and remuneration | ||||||
Salaries of the management and Board | 146 | 223 | 867 | |||
Fair values | ||
(unaudited) | ||
Carrying amount | Fair value | |
1 000 EUR | 31.3.2015 | 31.3.2015 |
Financial assets | ||
Available-for-sale investments | 9 | 9 |
Trade and other receivables | 2 478 | 2 478 |
Cash and cash equivalents | 225 | 225 |
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 | 1 699 | 1 699 |
Loans from financial institutions, current | 2 121 | 2 121 |
Other liabilities, current | 5 284 | 5 284 |
Trade payables and other non-interest-bearing liabilities | 6 486 | 6 486 |
The fair value of non-current liabilities is expected to correspond to the carrying amount 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 6.4 million out of trade payables and other current liabilites was overdue at the end of the reporting period. That included EUR 3.6 million of Savcor Face Bejing's overdue liabilities. During Q1 2015 there was an increase of 0.4 million in Savcor Face Beijing's overdue liabilities, which was mainly caused by exchange rate difference. In addition, an interest-bearing loan of 0,5 million to Savcor Group Limited / The Savcor Creditors' Trust was overdue. | ||
Change in intangible and tangible assets | |||
(unaudited) | |||
1 000 EUR | 31.3.2015 | 31.3.2014 | 31.12.2014 |
Includes tangible assets, consolidated goodwill and other intangible assets | |||
Carrying amount, beginning of period | 4 577 | 13 654 | 13 654 |
Depreciation and impairment | -224 | -552 | -6 905 |
Additions | 41 | 229 | 659 |
Disposals | -38 | 0 | -142 |
Discontinued operations | 0 | -129 | -2 955 |
Exchange rate difference | 0 | -269 | 265 |
Carrying amount, end of period | 4 356 | 12 933 | 4 577 |
Inventories | |||
(unaudited) | |||
1 000 EUR | 1-3/2015 | 1-3/2014 | 1-12/2014 |
Impairment losses and reversals of impairment losses for inventories booked in Income Statement | |||
Continuing operations | |||
Impairment loss | 0 | 0 | 939 |
Reversal of impairment loss | 0 | 0 | 0 |
Discontinued operations | |||
Impairment loss | 0 | 0 | 0 |
Reversal of impairment loss | 0 | 0 | 0 |
Commitments and contingent liabilities | |||
(unaudited) | |||
1 000 EUR | 31.3.2015 | 31.3.2014 | 31.12.2014 |
Loans from financial institutions | 950 | 1 240 | 948 |
Promissory notes secured by pledge | 12 691 | 12 691 | 12 691 |
Factoring loan and export credit limit | 1 172 | 1 496 | 1 307 |
Trade receivables | 73 | 822 | 91 |
Deposits | 283 | 0 | 0 |
Promissory notes secured by pledge | 12 691 | 12 691 | 12 691 |
Collaterals given from other short-term loans | |||
Deposits | 539 | 0 | 477 |
Operating leases - continuing operations | |||
Payable within one year | 0 | 7 | 0 |
Payable over one year | 0 | 0 | 0 |
Operating leases - discontinued operations | |||
Payable within one year | 0 | 5 | 0 |
Payable over one year | 0 | 0 | 0 |
Commitments - continuing operations | |||
Payable within one year | 83 | 756 | 58 |
Payable over one year | 0 | 719 | 0 |
Commitments - discontinued operations | |||
Payable within one year | 0 | 146 | 0 |
Payable over one year | 0 | 84 | 0 |