Summary
• As expected, Danionics reported a loss for the third quarter of the year of
DKK 0.8 million.
• The company reiterates its full-year forecast of a loss of DKK 2-3 million
before recognition of the share of the profit/loss or value adjustment in
Danionics Asia.
• Danionics has contributed DKK 5.4 million to Danionics Asia in 2010 to date.
Danionics has not made any commitment to provide further capital to Danionics
Asia.
Management's report
Q3 2010 financial performance
As expected, Danionics reported a loss for the third quarter of DKK 0.8 million
before recognition of a DKK 0.2 million writedown of the loan capital to
Danionics Asia. The writedown equals the amount which Danionics contributed to
Danionics Asia as loan capital in the third quarter. In the third quarter of
2009, the writedown amounted DKK 0.1 million. Apart from the writedown, the Q3
financial performance was on a level with the results achieved in Q3 2009.
The loan capital to Danionics Asia was recognised in the amount of DKK 0 at 30
September 2010, which is unchanged compared to 30 September 2009.
Cash amounted to DKK 3.4 million. Equity amounted to DKK 4.5 million at 30
September 2010, down from DKK 7.3 million at 31 December 2009. The reduction in
equity corresponds to the net loss for the period with the addition of the
private placement completed in the fist half of 2010.
The joint venture
The third quarter continued the positive development in sales seen in 1st and
2nd quarters.
The total amount of batteries shipped in July, August and September was 657.000
(1st quarter 208.000 and 2nd quarter 354.000). The shipments were still
dominated by one large customer.
Deliveries were on time and quality high.
4th quarter started well with similar order intakes but it is presently
foreseen that 1st quarter 2011 will se a sharp reduction in supplies as the
main customer has advised that stocks are high.
In parallel the Company continued the development of a totally new generation
of large batteries in close cooperation with the joint venture partners
Research and Development Centre, which is located in the same building as the
Danionics factory north of Shenzhen in China. The Company sent test batteries
of these larger dimension batteries to a number of new customers. Our joint
venture partner Sales Division reports positive initial reactions and
considerable interest amongst prospective customers.
With the usual test periods and build up of the production, volume deliveries
of the new models will most likely not start before mid 2011.
It is the intention to continue to offer the smaller sizes of batteries in the
market, while expecting the new generation of batteries to pick up in sales.
Outlook for 2010
Danionics retains the guidance for 2010 presented in Annual Report for 2009
released on 11 March 2010. The profit/loss for 2010 will be affected by
marketing and selling costs related to the joint venture and administrative
expenses of about DKK 2.5 million. Overall, Danionics expects a loss in the
range of DKK 2-3 million after interest income but before recognition of the
share of the profit/loss for the year or value adjustment in Danionics Asia
Ltd.
Moreover, the company may continue to generate sales revenue if the sales
efforts undertaken by Danionics A/S should result in the addition of new
orders.
Danionics A/S expects to have sufficient capital to stay in business for the
next 12 months.
For additional information, please contact:
Henning O. Jensen, Chief Executive Officer, tel. +45 70 23 81 30
