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Aspocomp Reports 45% Sales Drop in 1H09
August 13, 2009 |Estimated reading time: 5 minutes
Continuing operations comprise Aspocomp Oulu Oy and the headquarter operations of Aspocomp Group Plc. These operations form one business segment. The company releases its Interim Report for January 1-June 30, 2009:
- Net sales: EUR 6.2 million (EUR 11.3 million 1-6/2008).
- Operating profit before depreciation (EBITDA): EUR -0.6 million (0.9).
- Operating profit (EBIT): EUR -1.2 million (0.0).
- Earnings per share (EPS) from continuing operations: EUR -0.03 (-0.02).
- Earnings per share (EPS) from divested and discontinued operations: EUR 0.00 (-0.01).
- Cash flow from operations: EUR 1.0 million (-3.0).
Sami Holopainen, President and CEO, said, "The market remained challenging. Due to decreased net sales, the Oulu plant's result turned red. In addition, about EUR 0.2 million in one-time compensation for dismissal and provision for bad debt were booked during the period.
"Due to tight cost control, cash flow after investments remained positive, but cash in hand decreased about EUR 0.5 million, as the company repaid EUR 1 million in bank debts. The market is expected to remain challenging throughout the year 2009. EBITDA is likely to be negative.
"The Suzhou, China plant of the joint venture Meadville Aspocomp (BVI) Holdings Ltd. reopened in March 2009 and is currently running at a low capacity utilization level. As the Chinese export market remains weak, we do not expect to achieve a significant improvement in sales, and earnings will, thus, fall short of break-even in 2009. The India plant project is also on hold until further notice.
"Overall, Aspocomp is financially stable and the company can continue as is. However, the company can also be further developed through various structural arrangements."
The Group's Business Activities
Aspocomp Oulu Oy manufactures and sells PCBs for telecom, industrial and automotive electronics applications. Its service portfolio includes prototype and quick-turn deliveries, fulfillment of urgent PCB needs in high-volume operations, as well as development and commercialization of new technologies. Aspocomp Oulu's primary technologies are HDI, multilayer and special material PCBs.
Aspocomp has a 20% stake in the joint venture Meadville Aspocomp (BVI) Holdings Limited. The joint venture's production facility in Suzhou, China is a volume manufacturer of HDI and multilayer PCBs.
Aspocomp's 20% stake in the joint venture is booked into the balance sheet at its minimum value, which is based on the option agreement made in connection with the ownership arrangements in 2007. Details of the option agreement can be found in the press release of Meadville Holdings Ltd. published on November 16, 2007: "Major transaction - acquisitions and resumption of trading, pages 8-9." Therefore, the value of Aspocomp's stake remains the same regardless of the financial performance of the joint venture.
In addition, Aspocomp holds a 14.1% share in the Thai company PCB Center Co., Ltd. (former subsidiary Aspocomp (Thailand) Co., Ltd.) and a 5.3% share in Imbera Electronics Inc.
Net financial expenses were EUR -0.2 million (-0.4). Profit from continuing operations was EUR -1.0 million (-0.3) and earnings per share from continuing operations were EUR -0.02 (-0.01).
Net financial expenses were EUR -0.4 million (-0.8). Profit from continuing operations was EUR -1.4 million (-0.8) and earnings per share from continuing operations were EUR -0.03 (-0.02).
Financing, Investments And Equity Ratio
Aspocomp's cash flow from operations during the period was EUR 1.0 million (-3.0, inc. divested and discontinued operations). Net liquid assets at the end of the period amounted to EUR 3.8 million (4.8).
Interest-bearing net debt was EUR 18.2 million (33.4). Gearing decreased to 432.5% (857.7%). Non-interest bearing liabilities amounted to EUR 4.9 million (12.6).
Investments in continuing operations were EUR 0.4 million (0.6).
The equity ratio stood at 13.6% (7.2%) at the end of June.
Shareholders' Equity of the Parent Company
In accordance with the requirements of the Companies Act, the Trade Register has been notified of the loss of share capital on May 14, 2008. The shareholders' equity of Aspocomp Group's parent company, Aspocomp Group Plc., was EUR 2.3 million negative at the end of the second quarter. However, the shareholders' equity of Aspocomp Group was EUR 4.2 million positive.
Research and Development
Aspocomp engages in R&D primarily through cooperation with its customers and suppliers. In connection with customer projects and other customer contacts, information on future interconnection technology applications is exchanged. This information is used to steer development work and execute investments to improve technical capability. Correct timing of investments is vital for maintaining competitiveness, cost efficiency and technological viability.
Research and product development costs are recognized in plant overhead.
Shares and Share Capital
The total number of Aspocomp's shares at June 30, 2009 was 49,905,130 and the share capital stood at EUR 20,082,052. Of the total shares outstanding, the company held 200,000 treasury shares, representing 0.4% of the aggregate votes conferred by all the shares. The number of shares adjusted for the treasury shares was 49,705,130.
A total of 24,632,114 Aspocomp Group Plc. shares were traded on NASDAQ OMX Helsinki during the period from January 1-June 30, 2009. The aggregate value of the shares exchanged was EUR 3,513,124. The shares traded at a low of EUR 0.05 and a high of EUR 0.24. The average share price was EUR 0.14. The closing price at June 30, 2009 was EUR 0.14, which translates into market capitalization of EUR 6,986,718. At the end of the period, nominee-registered shares accounted for 5.2% of the total shares and 0.2% were directly held by non-domestic owners.
Personnel
During the period, Aspocomp had an average of 111 employees (149). The personnel count on June 30, 2009 was 106 (156). Of them, 72 (109) were non-salaried and 34 (47) salaried employees. The reference numbers are for continuing operations.
Aspocomp CFO Sami Holopainen, Lic. Sc. (Tech.) was appointed Chief Executive Officer as of June 22, 2009. Isto Hantila will continue to serve Aspocomp until the end of August in order to support his successor.
Outlook for the Future
Aspocomp's financial position is satisfactory. The lean cost structure and the outlook for operations in Oulu enable the continuity of operations.
Net sales in 2009 will decline due to the difficult market situation and solutions implemented to reduce risks. Operating profit before depreciation (EBITDA) is likely to be negative.
In addition to developing the continuing operations of the company, the Board of Directors is looking into various structural development solutions, including carrying out company reorganization in the future.
About Aspocomp
The Aspocomp Group offers and develops innovative interconnection solutions for the electronics industry in close cooperation with its customers. The company is a supplier of data communications equipments and industry and offers global customers a fast road to mass production through flexible and cost-effective adaptation of new technologies.
The Aspocomp Group's production facility is located in Oulu, Finland. In 2008, the Group's net sales stood at approximately EUR 21 million and had about 115 employees at the end of December, 2008. For more information, visit http://www.aspocomp.com/.