EUROTECH: THE BOARD OF DIRECTORS APPROVES THE CONSOLIDATED
INTERIM MANAGEMENT STATEMENT AT 31 MARCH 2013
Amaro (Italy), 13 May 2013 - - - - - - - - Consolidated revenues:
from EUR 20.40 million to EUR 14.59 million Consolidated gross
profit: from EUR 10.55 million to EUR 8.15 million Consolidated
EBITDA: from EUR 199 thousand to EUR -920 thousand Consolidated
EBIT: from EUR -1.71 million to EUR -2.59 million Consolidated
pre-tax loss: from EUR -1.49 million to EUR -1.69 million Group net
profit (loss): from EUR -1.52 million to EUR -1.73 million Net
debt: EUR 14.24 million Group shareholders' equity: EUR 114.25
million
The Board of Directors of Eurotech S.p.A. today reviewed and
approved the results for the first quarter of 2013. The quarter
just ended was characterised, on the one hand, by lower revenues
earned compared with past performance and, on the other hand, by a
further advance in the reduction of operating costs. While the
breakeven result that management expects has not emerged in these
first three months due to revenue trends, the annualised objectives
still hold true, in view of both the efforts made on reducing
operating costs and the order book and contracts in force for the
subsequent quarters and particularly for the second half of the
year. In Q1 2013, Group revenues came to EUR 14.59 million compared
to EUR 20.40 in the first three months of 2012. Revenues were
heavily influenced by the demands of customers in the Americas and
Japan for specific scheduling of the deliveries in the second half
of the year, which was more prevalent this year than in the past.
After analysing the situation in the individual geographic areas,
we can state that the United States market confirmed the generally
positive trends reported in 2012. In the Americas, revenue trends
in the first quarter were affected by the business development
strategy with larger customers and through larger contracts pursued
in the recent years, a strategy which began to show results on the
order intake since the second half of last year. Increases in
revenues from larger customers with significant orders are
essential to the growth of medium- to long-term revenues, but in
the short term it implies less uniformity in the annual revenue
distribution; this matter is macroscopic this year because the
process of increasing the average size of the
EUROTECH spa Via F. Solari, 3/A 33020 Amaro (UD) - ITALY Tel. +39
0433 485411 Fax. +39 0433 485499 ir@eurotech.com
www.eurotech.com
orders is still in development. Another temporary effect related to
the transition toward larger contracts is the lengthening of the
lead time, namely, the time required for orders to become
deliveries. This occurrence is pushing back deliveries to the
second half of the year. Looking at the Japanese market, the
prospects for the financial year 2013 predict a weaker Yen versus
other world currencies and this should, in the medium term, bolster
the business of our customers in that area, which rely heavily on
exports as well as on their domestic market. However, in the short
term, the earliest visible effect of a weaker Yen will be a lower
value in Euro of the region's revenues. This first quarter has been
impacted by the temporary decrease in revenues earned from a major
local customer which has resulted in the expected turnover in the
quarter (in line with turnover earned in the first three months of
2012) shifting into the subsequent quarters. Finally, Europe is
displaying significant uncertainty, allowing us little ability to
predict the future evolution due to the overall turmoil in the Euro
zone member states. The persistence of this uncertainty, coupled
with the HPC business line not generating revenues compared to the
first quarter 2012, has had a negative effect on the economic and
financial results of the Group in this area. The order intake is
developing in line with our expectations. This also allows us to
continue to view the 2013 financial year with confidence,
regardless of the result of the first quarter, which historically
has not been representative of the overall performance on twelve
months and has a low incidence on the results of the entire year.
One unquestionably positive result of the first quarter is the
higher than expected gross profit, due to the increased sales of
products and services with high value-added compared to what is
traditionally achieved. Gross profit for the first quarter 2013 was
EUR 8.15 million, accounting for 55.9% of revenue (versus 51.8% in
the first quarter 2012 and 52.3% at year-end 2012). As we have
already noted, periodic variations to the gross profit are due to a
different mix of products sold and the different contribution to
revenue by the geographic areas in which Eurotech operates. These
changes are less evident when viewed from an annual time span, over
which gross profit margin has been firmly maintained at more than
50%, a level that management continues to keep as reference. The
consistent and steady curbing of operating costs - achieved without
sacrificing investments to support Group competitiveness - has made
it possible to partially offset the lower revenue earned in the
first quarter hence limiting the effects on EBITDA. Gross of
adjustments made in the three months in question, operating costs
have decreased by EUR 1.4 million, falling from EUR 11.0 million in
the first quarter 2012 to EUR 9.6 million in the first quarter
2013. As in the previous quarters, these changes were largely due
to actions undertaken by management to make the Group structure
more efficient and to lower the activation threshold for operating
leverage. Additional benefits will emerge this year, resulting from
the most recent actions taken at year-end 2012 and throughout the
current year. Cost trends have also benefited from the exchange
rate used to convert the financial statements of foreign
subsidiaries. In the first three months of 2013, EBITDA amounted to
EUR -920 thousand, down from EUR 199 thousand in 2012.
EBIT in the first quarter 2012 was equal to EUR -2.59 million: the
decrease of EUR 880 thousand against the same quarter in 2012
reflects the lower revenue generated, which was only partly
compensated by a decrease in operating costs and amortisation. This
performance was influenced by the EBITDA result, as well as
depreciation and amortisation posted to the income statement in the
first quarter of 2013, arising both from operating assets that
became subject to depreciation at 31 March 2013 and from PPA
effects relating to the acquisitions of Eurotech Inc. (formerly
Applied Data Systems Inc.), Dynatem Inc. and Advanet Inc. The
effect on EBIT of the higher values attributed as a result of PPA
was EUR 830 thousand in the first three months of 2013, compared
with EUR 930 thousand in the same three months in 2012. The Group
posted a pre-tax loss in Q1 2013 of EUR -1.69 million, compared
with a loss of EUR -1.49 million in Q1 2012, and was affected by
the factors set out above as well as by the positive contribution
from financial operations as a consequence of currency exchange
differentials. The effects on the pre-tax result arising from PPA
amounted to EUR 830 thousand in the first three months of 2013 (EUR
930 thousand in the first three months of 2012). The Group results
amounted to EUR -1.73 million for the quarter (EUR -1.52 million at
31 December 2012) and reflect the dynamics of the result before
taxes described above. At 31 March 2013, Group net financial debt
was EUR 14.24 million, compared with EUR 11.45 million at year-end
2012, owing primarily to the use of funds to sustain working
capital and manage the business.
We advise the public that, as required by the CONSOB (Italian
securities & exchange commission), the Consolidated Interim
Management Statement at 31 March 2013 is available to anyone who
requests it at the Company's registered headquarters. The report is
also available on Eurotech's website at the address
www.eurotech.com Pursuant to article 154-bis, paragraph 2, of the
Italian Consolidated Finance Act, the Financial Reporting Manager
of Eurotech S.p.A., Sandro Barazza, hereby declares that the
financial disclosure contained in this press release corresponds to
the Company's documentary evidence, corporate books and accounting
records.
THE EUROTECH GROUP Eurotech (ETH.MI) is a global company based in
Italy and with offices and subsidiaries in Europe, North America
and Asia. The Eurotech group develops and markets miniaturised
computers for special use (NanoPCs) and computers featuring
elevated computing capacity (HPCs High-Performance Computers).
With these two product categories, Eurotech aims to become a leader
in the implementation of pervasive computing, which leverages Cloud
IT infrastructure to enable an entire range of value-added services
and functions in the transport, logistics, defence, security,
industrial and medical sectors. For more information on Eurotech,
visit the website www.eurotech.com.
Company contacts: Investor relations Andrea Barbaro Tel: +39 0433
485411 e-mail: andrea.barbaro@eurotech.com Corporate Communication
Cristiana della Zonca Tel: +39 0433 485411 e-mail:
cristiana.dellazonca@eurotech.com
ANNEXES FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT ( '000) Sales revenue Cost of
material Gr os s profit Services costs Lease & hire costs
Payroll costs Other provisions and costs Other revenues EBITDA
Depreciation & Amortization EBIT Share of associates' profit at
equity Finance expense Finance income Pr ofit before tax Income tax
Ne t profit before m inor it y interest M inor it y interest Gr oup
net profit (loss) Bas e earnings per share Dilut e d earnings per
share 1Q 2013 (b) % 1Q 2012 (a) 20.394 ( 9.840) 10.554 ( 3.737) (
568) ( 6.500) ( 246) 696 199 ( 1.905) ( 1.706) 9 ( 1.138) 1.347 (
1.488) ( 36) ( 1.524) 0 ( 1.524) ( 0,043) ( 0,043) %
ch an g e (b-a) am o u n t ( 5.809) ( 3.401) ( 2.408) ( 393) ( 107)
( 909) ( 74) ( 194) ( 1.119) ( 235) ( 884) 9 ( 36) 650 ( 207) ( 2)
( 205) 0 ( 205) %
-28,5%
14.585 100,0% (6.439)
-44,1 %
1 0,0% 0
-48,2% 5 1, 8 % -1 ,3% 8 -2,8% -319% , -12% , 3,4%
34,6% - 2 2 ,8 % -1 ,5% 0 1 ,8% 8 1 ,0% 4 30,1 % -27,9%
8.146 5 5 , 9 % (3.344) -22,9% (461) (172) 502
-3,2%
(5.591) -38,3%
-12% , 3,4%
( 920) - 6 , 3 % (1.670)
-1 ,5% 1
1, 0 % -9,3% - 8 ,4 %
n.s . -1 ,3% 2 5 1, 8 %
( 2.590) - 17 , 8 % 0 (1.102) 1.997 (34) 0
0,0% -7,6% 1 ,7% 3
0,0% -5,6% 6,6% - 7 ,3 % -0,2% - 7 ,5 % 0 ,0 % - 7 ,5 %
1 0,0% 0 -3,2% 48,3% 13 , 9 % -5,6% 13 , 5 % n/ a 13 , 5 %
( 1.695) - 11, 6 %
-0,2%
( 1.729) - 11, 9 %
0 ,0 %
( 1.729) - 11, 9 % ( 0,049) ( 0,049)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
('000) at March 31, 2013 at Decem b er 31, 2012
ASSETS Intangible assets Pr oper ty , Plant and equipment Inv es
tments in affiliate companies Inv es tments in other companies Def
er red tax assets Other non-current assets Tot al non-current
assets Inv entor ies Contr ac ts in progress Tr ade receivables Inc
ome tax receivables Other current assets Other current financial
assets Cas h & cash equivalents Tot al current assets Tot al
assets 108.512 4.391 293 262 918 629 115.005 19.477 0 20.222 173
2.700 101 9.258 51.931 166.936 112.853 4.756 275 257 1.083 672
119.896 18.282 850 26.641 362 2.170 144 12.116 60.565 180.461
LIABILITIES AND EQUITY Shar e capital Shar e premium reserve Other
reserves Gr oup shareholders' equity Equit y attributable to m inor
it y interest Tot al shareholders' equity Medium- /long- ter m
borrow ing Employ ee benefit obligations Def er red tax liabilities
Other non-current liabilities Tot al non-current liabilities Tr ade
payables Shor t- ter m borrow ing Der iv ativ e instruments Inc ome
tax liabilities Other current liabilities Tot al current
liabilities Tot al liabilities Tot al liabilities and equity 8.879
136.400 ( 31.034) 114.245 0 114.245 10.268 1.634 8.704 893 21.499
11.118 12.996 335 485 6.258 31.192 52.691 166.936 8.879 136.400 (
25.107) 120.172 0 120.172 10.327 1.676 9.486 846 22.335 15.084
13.036 344 2.103 7.387 37.954 60.289 180.461
STATEMENT OF CHANGES IN EQUITY
Share capital ('000) Balance as at December 31, 2012 8.879
Legal reserve
Share premium reserve
Conversion reserve
Other reserves
Cash flow hedge reserve
Exchange rate differences reserve ( 523) ( 1.340) ( 2.783) Treasury
shares Profit (loss) for period
Group shareholders' equity
Equity attributable to Minority interest -
Total shareholders' equity
39
136.400
22.793
( 42.949)
( 344)
120.172
120.172
2012 Result allocation Profit (loss) as at March 31, 2013
Comprehensive other profit (loss) - Hedge transactions - Foreign
balance sheets conversion difference - Exchange differences on
equity investments in foreign companies Comprehensive result
-
-
-
-
( 2.783) -
-
-
-
2.783 ( 1.729)
( 1.729)
-
( 1.729)
-
-
-
( 4.822) ( 4.822)
-
9
-
-
( 1.729)
9 ( 4.822) 615 ( 5.927)
-
9 ( 4.822) 615 ( 5.927)
-
9
615 615
Balance as at March 31, 2013
8.879
39
136.400
17.971
( 45.732)
( 335)
92
( 1.340)
( 1.729)
114.245
-
114.245
STATEMENT OF CASH FLOW
at March 31, ('000) 2013
at December 31, 2012
at March 31, 2012
Cas h flow generated (used) in operations Cas h flow generated
(used) in investment activities Cas h flow generated (absorbed) by
financial assets Net foreign exchange difference Inc r eas es
(decreases) in cash & cash equivalents Opening amount in cash
& cash equivalents Cas h & cash equivalents at end of
period
( 1.685) ( 538) (56) ( 579) ( 2.858) 12.116 9.258
7.432 ( 2.466) ( 4.516) ( 1.930) ( 1.480) 13.596 12.116
( 1.544) ( 515) 503 ( 1.792) ( 3.348) 13.596 10.248
NET FINANCIAL POSITION
at March 31, ('000) Cas h & cash equivalents Cas h equivalent
Shor t term borrow ing allow ed to affiliates companies Other
current financial assets Der iv ativ e instruments Shor t- ter m
borrow ing Bus ines s aggregation liabilities Shor t - t e r m
financial position Shor t - t e r m net financial position Other
non current financial assets Medium/long term borrow ing M e dium -
/long- t e r m net financial position A B=A C D E F G H=C+D+E+F+G
I=B+H K L M =J+K+L 2013 ( 9.258) ( 9.258) 0 ( 101) 335 12.996 0
13.230 3.972 0 10.268 10.268
at December 31, 2012 ( 12.116) ( 12.116) 0 ( 144) 344 13.036 0
13.236 1.120 0 10.327 10.327
at March 31, 2012 ( 10.248) ( 10.248) ( 81) 0 405 17.808 210 18.342
8.094 ( 186) 10.430 10.244
( NET FINANCIAL POSITION) NET DEBT
N=I+M
14.240
11.447
18.338
WORKING CAPITAL
at March 31, ('000) 2013 (b )
at Decem b er 31, 2012 (a)
at March 31, 2012 C h an g es (b -a)
Inventories Contr ac ts in progress Tr ade receivables Rec eiv
ables from affiliates companies Inc ome tax receivables Other
current assets Cur r ent assets Tr ade payables Inc ome tax
liabilities Other current liabilities Cur r ent liabilities Ne t w
or k ing capital
19.477 0 20.222 0 173 2.700 42.572 ( 11.118) ( 485) ( 6.258) (
17.861) 24.711
18.282 850 26.641 0 362 2.170 48.305 ( 15.084) ( 2.103) ( 7.387) (
24.574) 23.731
22.249 1.374 23.556 71 501 2.860 50.611 ( 13.327) ( 959) ( 6.383) (
20.669) 29.942
1.195 ( 850) ( 6.419) 0 ( 189) 530 ( 5.733) 3.966 1.618 1.129 6.713
980
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