Summary
• As expected, Danionics reported a loss for the first quarter of DKK 0.6
million before recognition of a DKK 0.2 million value adjustment in Danionics
Asia.
• The company reiterates its full-year forecast of a loss of DKK 2-3 million
before recognition of the share of the profit or loss or value adjustment in
Danionics Asia.
• Danionics incurred costs of DKK 0.2 million on behalf of Danionics Asia
during the first quarter.
• Earlier today, Danionics made a directed issue to Surplus Enterprise Ltd.,
Hong Kong.
First quarter 2010 financial performance
As expected, Danionics reported a loss for the first quarter of DKK 0.6 million
before recognition of a DKK 0.2 million writedown of the loan capital to
Danionics Asia. The writedown equals the sales and marketing costs Danionics
incurred on behalf of Danionics Asia in the first quarter. Apart from the
writedown, the Q1 2010 financial performance was on a level with the result
achieved in Q1 2009.
The loan capital to Danionics Asia is recognised in the amount of DKK 0, which
is unchanged from 31 March 2009.
Cash amounted to DKK 5.6 million. Equity amounted to DKK 6.5 million at 31
March 2010, down from DKK 7.3 million at 31 December 2009. The reduction in
equity corresponds to the net loss for the period.
The joint venture
Battery sales to the Bluetooth market have been disappointing.
The company has therefore resolved to develop an additional market segment for
larger sized batteries. The plan is to remain in the high end of the bluetooth
market, where customers are willing to pay for top quality and reliability and
for certified production
Comprehensive efficiency improvements are being implemented at the factory,
including the installation of semi-automatic and automatic production equipment
and enhanced processes. This has led to a substantial fall in the number of
hours used per 1,000 batteries manufactured, and costs as a percentage of
revenue are also declining.
On 26 April 2010, Danionics made a directed issue to Surplus Enterprise Ltd.,
Hong Kong, a member of the GP Batteries Group. The proceeds net of costs will
be provided as a loan to the Danionics Asia Ltd. joint venture. The GP
Batteries Group will contribute a corresponding amount. This strengthened
capital base is intended to support the joint venture's operations for the next
six months.
This agreement was confirmed at the board meeting of the Danionics Asia Ltd.
joint venture held in London on 25 April 2010.
Outlook for 2010
Danionics retains the forecast for 2010 presented in the annual report for 2009
released on 11 March 2010. The result for 2010 will be affected by marketing
and sales costs related to the joint venture and administrative expenses of
around 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 adjustments in Danionics Asia Ltd.
Moreover, the company may continue to generate sales revenue, should the sales
efforts undertaken by Danionics A/S result in the inflow of new orders.
Danionics A/S expects to have sufficient capital to continue in business for
the next 12 months.
For additional information, please contact:
Henning O. Jensen, Chief Executive Officer, tel. +45 70 23 81 30
