The Board of Directors of Topsil Semiconductor Materials A/S has today considered and approved the interim report for Q1 2011.
The highlights of the interim report, which is unaudited, are:
Summary for Q1 2011
Revenue and earnings
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Topsil's revenue amounted to DKK 92.0 million in Q1 2011, against DKK 102.8 million in Q1 2010. Revenue was below expectations due to delays in the approval process by new customers of PFZ and CZ-EPI products as a result of normal procedural issues arising on initiation of new collaborations. Sales of NTD products are progressing according to expectations, reflecting the fact that several contract customers are expanding their capacity.
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The restructuring of products in the CZ-area is proceeding satisfactorily. Topsil expects to sell significantly greater volumes of CZ-EPI products than CZ products in 2011, corresponding to 60-70%, which would have a positive effect on earnings for the rest of the year. CZ-EPI sales accounted for approximately 60% of CZ earnings in Q1.
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Going into the second quarter, Topsil's order book is growing for the year as a whole, and market conditions remain favourable for both FZ and CZ silicon.
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Consolidated EBITDA for Q1 2011 was DKK 12.3 million, corresponding to an EBITDA margin of 13.4% compared with EBITDA of DKK 20.2 million and an EBITDA margin of 19.6% in Q1 2010. EBITDA was adversely impacted by the lower level of activity. As a consequence, Topsil will focus on cost minimisation and implementation of efficiency improvement measures throughout the group.
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Topsil reported a profit before tax of DKK 5.7 million and a profit after tax of DKK 2.7 million for Q1 2011, compared with a profit before tax of DKK 18.7 million and a profit after tax of DKK 13.5 million for Q1 2010.
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The company reported a net cash inflow from operating activities of DKK 0.9 million in Q1 2011 compared with DKK 37.8 million in the year-earlier period. The primary reason for the difference was additional capital being tied up in working capital as a result of increased inventories, and a secondary reason was a drop in EBIT from DKK 16.3 million last year to DKK 7.9 million this year.
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During the first quarter, Topsil renegotiated a long-term contract with a contract customer whose previous contract was due to expire at the end of 2012. The renewed contract will run for the period 2011-2015 on terms comparable with those of the previous contract.
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The new 6" PFZ-product with better technical properties than earlier PFZ-products is currently being introduced to existing and new customers. The introduction is taking place through a number of approval processes, and its progress is satisfactory, despite delays.
- The group has accelerated the development of the 8" NTD and PFZ-products. This development is progressing to plan, and Topsil expects to develop an 8" crystal before the end of the financial year, aiming for market introduction in 2012.
Outlook for FY 2011
- As the level of activity in Q1 2011 was below expectations and it is uncertain when a number of customers will complete the approval process of the new 6" PFZ and CZ-EPI products, the Group's revenue forecast for 2011 is downgraded from organic growth of about 5% to organic growth in the range of 0-5%. The company maintains its EBITDA forecast of around DKK 100 million as a result of increased focus on cutting costs and improving efficiency.
Further information
Questions regarding stock exchange announcements may be addressed to:
Jens Borelli-Kjær, Chairman, tel. +45 40 16 14 82
Keld Lindegaard Andersen, CEO, tel. +45 21 70 87 72
