2016-11-02 17:30:01 CET
2016-11-02 17:30:01 CET
REGULATED INFORMATION
Valoe Oyj - Interim report (Q1 and Q3)
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 30 SEPTEMBER 2016
Valoe Corporation Interim Report
2 November 2016
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 30 SEPTEMBER 2016
SUMMARY
- Valoe Corporation (“Valoe”) is a technology startup, specializing in the
clean energy, that, however, already has a new, competitive and tested
technology in use; operating automated production plant; worldwide market and
the first export order for a solar module factory to Ethiopia; as well as
experienced personnel with competence in international technology sales,
production and projects.
- In February 2016 Valoe received an approximately EUR 15.8 million order for a
solar module manufacturing plant and back contact technology. About EUR 9.5
million of the sales price will be paid in cash to Valoe and the rest of the
sales price in shares of the customer company resulting in Valoe having a 30
percent shareholding in its Ethiopian manufacturing partner. The Development
Bank of Ethiopia has granted Valoe’s customer full financing for the order.
- Valoe’s financing situation is very tight. Valoe’s planned financing for the
building period was mainly based on an advance payment of EUR 2.8 million for
which Valoe shall arrange a bank guarantee. Securing of an advance payment
guarantee has been delayed. Negotiations for a guarantee and bridging financing
are ongoing and Valoe trusts it will close the negotiations within the next few
weeks. The delivery has been postponed due to insufficient financing. Valoe and
its manufacturing partner have revised the schedule for completing the
Ethiopian project. According to the re-evaluation the machinery and equipment
for the plant will be delivered in Ethiopia during the first half of the year
2017. According to the previous estimation the delivery was expected to take
place during the year 2016.
- Valoe sold its shares in the company’s subsidiaries in Hong Kong and China to
Savcor Tempo Oy, a related company belonging to Savisalo family. The
transaction included all related debts and liabilities, however, excluding the
guarantee on lease liability of max. EUR 0.65 million. The arrangement
increases Valoe Group’s consolidated result by approximately EUR 7.1 million
and on the reporting period decreases Valoe Group’s net debts by approximately
EUR 3.9 million.
- On the reporting period Valoe Group’s net sales increased to EUR 3.8 million
as the sales on the Finnish solar energy market increased and the Ethiopian
project started generating revenue. The EBITDA of the continuing operations was
EUR 6.8 million after the company’s liabilities in China were discharged. The
EBITDA of the continuing operations excluding the one-off profit originating
from the sale of the shares in the Chinese subsidiaries amounted to EUR -0.3
million.
- Valoe has started selling the company’s solar power plants and modules in
Finland after having built and trained a network of sales representatives and
having established cooperation with companies interested in Valoe’s technology.
The Finnish solar power market has only recently started to developed.
- Due to the delay in the Ethiopian project delivery Valoe estimates that the
net sales of Valoe Group will be ca. EUR 5.5 – 6.0 million in 2016 (in 2015:
EUR 0.7 million) and the EBITDA ca. EUR 6.5 – 7.0 million (in 2015: EUR -2.8
million). The financial year 2016 is estimated to be profitable with profit for
the financial year 2016 of ca. EUR 3.2 – 3.7 million (in 2015: EUR -4.7
million). All figures for the comparison year concern the continuing
operations.
More information on principle activities and events during and after the
reporting period can be found in the stock exchange releases published on
Valoe’s website at www.valoe.com. The Interim Report has been drawn up in
compliance with the IAS 34 Interim Financial Reporting standard. In the Interim
Report Valoe has applied the same accounting principles as in its Annual Report
2015. The Interim Report has not been audited.
FINANCIAL RESULT IN JANUARY – SEPTEMBER 2016
During the reporting period Valoe’s result started to improve as the product
sales in Finland took off and the Ethiopian project started to generate
revenue. However, the result was exceptional due to one-off item where Valoe’s
debts and liabilities related to the Beijing factory were discharged.
The sale of the shares of the Chinese subsidiaries increases Valoe Group’s
profit by ca. EUR 7.1 million and on the reporting period decreases the Group’s
net debts by ca. EUR 3.9 million. The transaction generates profit as the
Chinese subsidiary’s losses accumulated during Valoe’s ownership and impairment
associated with the subsidiary’s assets are removed from Valoe Group’s balance
sheet. The transaction increases the value of the Group’s capitalized
development costs. The mother company acquired the outcome of the development
and research mainly related to the conductive back sheet from China and
capitalized the development costs in its balance sheet. After the sale of the
Chinese subsidiaries the development costs are now included also in the Group
balance sheet.
The following financials include Valoe Group’s continuing operations. The
figures in brackets are comparison figures for the corresponding period in
2015, unless stated otherwise.
July – September 2016 (continuing operations)
- Valoe Group’s net sales increased by 549 percent to EUR 1.1 million (In 2015:
EUR 0.2 million).
- EBITDA was EUR -0.2 million (EUR -0.5 million).
- Operating profit was EUR -0.5 million (EUR -0.7 million).
- The profit before taxes was EUR -1.1 million (EUR -0.9 million).
- Profit for the period was EUR -1.1 million (EUR -0.9 million).
January – September 2016 (continuing operations)
- Valoe Group’s net sales increased by 623 percent to EUR 3.8 million (In 2015:
EUR 0.5 million).
- EBITDA was EUR 6.8 million (EUR -0.8 million).
- Operating profit was EUR 6.0 million (EUR -1.4 million).
- The profit before taxes was EUR 4.4 million (EUR -2.0 million).
- Profit for the period was EUR 4.5 million (EUR -2.0 million).
- Earnings per share were EUR 0.005 (EUR -0.002) and diluted earnings per share
EUR 0.003 (EUR -0.002).
MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW
During the third quarter of 2016 Valoe’s management focused on removing
barriers to the financing for the Ethiopian project. Up to now, the Finnish
financers’ decisions have been subject to the irrevocable Letter of Credit (LC)
of EUR 9.5 million, given to Valoe’s customer by The Development Bank of
Ethiopia (DBE), be opened by a solid bank operating in the EU. Slow financing
process has taken longer time than expected in Ethiopia. Apart from delayed
schedule, the matter is otherwise proceeding according to the financing
agreement signed in February 2016. However, the slow LC opening process has
complicated the company’s operations remarkably during the reporting period.
Valoe’s financing situation is very tight. Valoe’s planned financing for the
building period was mainly based on an advance payment of EUR 2.8 million
against a bank guarantee to be arranged by Valoe. It has taken longer time to
organize a security for the guarantee than expected. Negotiations for the
guarantee and bridging financing are ongoing and Valoe trusts it will close the
negotiations within the next few weeks.
During the reporting period Valoe’s sales negotiations with two other
manufacturing partner candidates have reached the final stages and Valoe’s
management estimates that the company will secure orders for the projects
during the first six months of 2017.
Valoe’s strategy is to find 6 – 8 manufacturing partners whose total annual
capacity exceeds 1.5 GWp. Valoe has estimated that establishing of this kind of
partner network may take five years.
Valoe is continuously in contact with several solar module manufacturers in
China and elsewhere and negotiates various opportunities of cooperation with
them.
Despite the challenges relating to the financing of the Ethiopian project
Valoe’s research and development projects for improving the company’s
competitiveness have proceeded well and have not essentially fallen behind the
planned schedule.
Intensive cooperation between Valoe and its Ethiopian partner during the
reporting period has deepened the understanding of operations and technology
required in an African business environment where electrification is only in
its initial phase. This knowledge enables Valoe to focus its development and
other investments on the topics providing Valoe’s partners with maximum benefit
and generating successful business for Valoe.
Africa as Valoe’s Market Area
Typical solar power market in Africa, as elsewhere, is divided into two
segments. Large power plants with the capacity of more than 100 MW and an
investment of EUR 130 – 200 million, depending on the circumstances and
technical specifications, are typically connected to the grid. There are
several these kind of huge projects ongoing just in Ethiopia.
Other opportunities that interest Valoe and its manufacturing partners are
typically related to the off-grid areas with diesel powered plants or with no
power at all. In these kind of projects a customer needs solar power plants but
also various energy storages and smart grid technology to create an optimal
system for an end user. There are several humanitarian projects in Ethiopia and
other African countries for bringing power to rural areas and small
communities. Products that could fit this kind of market and Valoe’s product
range could be e.g. independent solar modules including batteries used for
refrigerators, small household devices and lightning.
Research and Development
On the reporting period Valoe’s research and development has mainly been
concentrated on supporting the Ethiopian project delivery. Equipment and
machinery needed in automated module manufacturing process will increasingly be
based on Valoe’s own innovations and be designed by Valoe. Valoe is aiming at
protecting its innovations in all important geographical areas.
In December 2015, with a development loan of ca. EUR 4 million granted by
Tekes, the Finnish Funding Agency for Innovation, Valoe commenced a project
aiming to optimize cells for back contact modules. The objective of the project
is to develop features of cells used in back contact modules to produce best
possible capacity compared to H type modules made of similar materials. The
project schedule has been extended due to deficit in financing. However, based
on the development done so far Valoe seems to have future opportunities in cell
development, too.
Short-term and Long-term Financing
For the moment, Valoe’s main operational challenge relates to the company’s
financing. The company can have growing and profitable business only if it can
run its development and projects rationally without continuous delays and extra
costs generated by financing difficulties. During the next six months the
company’s most important task is to arrange financing sufficient enough to
enable the company to face challenges posed by growth and opportunities. By the
end of 2016, Valoe’s objective is to secure financing of EUR 2 – 4 million to
complete the Ethiopian project. Should the company fail in arranging a
financing facility of EUR 2 – 4 million, the company’s operation may be
jeopardized. Later, the company has planned a share issue project as a
long-term financing solution for the growth of the company. A share issue is
planned to be directed to investors in Finland and abroad. The schedule of a
possible share issue is not yet known.
VALOE’S STRATEGY
Valoe’s net sales will be generated by the following four service and product
concepts:
1. Photovoltaic modules and systems
Solar modules and small photovoltaic systems are probably Valoe’s most visible
in Finland but in terms of revenue potential the smallest product group. All PV
modules Valoe deliveres are manufactured at the company’s factory in Mikkeli
for the time being. They are mainly delivered to the company’s distributors and
future manufacturing partners both in Finland and abroad. Further, the company
provides solar power plants and systems to its customers in Finland and abroad.
Valoe has enhanced the sale of its modules and solar systems in Finland by
building and training its own sales channel.
Current capacity of the company’s Mikkeli factory is designed to annually
produce PV modules worth max EUR 6 – 8 million at the current market prices.
Thus, the module sales do not form a major part of the sales of the company.
The first module manufacturing recipes fully developed by Valoe has passed the
demanding test programs of the German Fraunhofer ISE, which enables Valoe’s
modules to be certified in all the company’s market areas.
2. Production lines and related components
Typically, manufacturers already operating within the business, e.g. in China,
could be interested in investing in new production lines. These Valoe’s
potential customers are producing traditional stringed H-pattern modules.
According to the information available to Valoe many manufacturers are going to
start to manufacture next generation modules using the CBS technology. These
kinds of customers usually have their own factories and module manufacturing
recipe and require only production equipment or lines. According to Valoe’s
estimation typical price of production equipment or a production line for solar
modules is EUR 4 – 8 million.
The company negotiates with several potential customers interested in Valoe’s
production technology for delivering solar module plants, production lines or
equipment worldwide.
3. Manufacturing partners
After having received the first manufacturing partnership agreement and the
first order for a manufacturing plant in February 2016, Valoe continues
negotiating for cooperation agreements with several potential manufacturing
partners who as newcomers on the market would commit themselves to both Valoe’s
production technology and module manufacturing recipe like the Ethiopian
customer has done. Valoe provides a partner with a turnkey delivery project and
commits to minority shareholding in a manufacturing company as was the case
with the order from Ethiopia. Valoe’s shareholding is agreed to be 30 percent
in Ethiopia.
According to Valoe’s strategy buyers of module manufacturing plants, who are
Valoe’s manufacturing partners, start using Valoe’s components forming an
ecosystem whose development and competitiveness Valoe looks after. Additionally
Valoe will take care of an ecosystem’s technological and economic
competitiveness by updating plants based on the latest research and experience.
Valoe provides its manufacturing partners with technical support and is neither
aiming to have a major shareholding in its partnership companies nor Valoe
pursues to take responsibility for the sales of its partners’ products or for
other local business operations.
Manufacturing partners operate mainly on developing markets and produce solar
energy modules for local and nearby markets. Value of a typical turnkey plant
delivery is more than ten million euros. The value of the order from Ethiopia
totaled EUR 15.8 million. Valoe is aiming to sign at least 10 manufacturing
partnership contracts in the next five years.
4. Special components and technologies and services increasing utilization of
solar energy
Special components are the most important part in Valoe’s strategy and most
remarkable in terms of net sales potential. Valoe’s first component is
Conductive Back Sheet (CBS) that has been developed by Valoe and is one of the
most important components in a module. One normal size module production plant
using back contact technology needs approximately 300,000 – 500,000 conductive
back sheets in a year when operating at full capacity. Based on current
estimation, considering price level in the near future, each production line
will annually require back sheets worth approximately 5 – 11 million Euros.
In the future Valoe is planning to offer its partners other components too.
These components might include e.g. various intelligent module components, and
special back contact based cell technologies.
In the long run Valoe will include technologies relating to energy storages and
fuel cells as well as other technologies increasing utilization of solar energy
in the company’s offering. As to the key competences in these technologies
Valoe will be supported by its technology partners.
OPERATING ENVIRONMENT
Valoe operates in industries applying clean energy technology and its operating
environment is global. The company’s customers are companies that provide
products and services locally or worldwide. Valoe’s key products and services
have been designed for the photovoltaic market.
The global growth of solar energy investments has been faster than expected.
Many solar module manufacturers with solid market position have broken losing
streak and started to plan investing in capacity, partly to increase the amount
of their production capacity and partly to replace production capacity for old
H-pattern solar modules.
Valoe has previously announced that according to the company’s view the focus
of its future business will be in the developing countries. The order received
from Ethiopia in February 2016 further strengthens this view. Many of the mega
trends, national climate protection objectives, increasing industrialisation in
the developing countries and increasing energy self-sufficiency, favour local
manufacturing of solar modules. For the moment major part of the world’s solar
module manufacturing is concentrated in China. Modules are manufactured in
large labour-intensive units and are delivered from there to the world market
to be installed.
In the developed countries solar electricity is mainly produced in large solar
power plants located in open landscape feeding electricity to main grid. In
this kind of power plants logistics costs, among others, can be optimized and
such parameters as module’s capacity per square meter have not had major
importance. In the developing countries logistics costs, in particular, are
significant and demand is focused on so called mini grid systems where solar
power plants have been decentralized and new local grid is built around them.
Grids are connected to each other and to new small power plants as electricity
consumption, distribution and production increases steadily. Electricity
production is decentralized and electricity is distributed through a new type
of grid infrastructure. Small power plants are often so called hybrids where
solar power plants are operated together with diesel, water and wind power
plants in same grid and where various energy storages can be integrated.
In an environment described above a local producer has much better
possibilities to control logistics costs. Many of the partners Valoe is
negotiating with have noticed that local production costs are clearly lower
than prices of modules imported from China. When modules are produced locally
possibilities to control the quality increase, too. In Valoe’s view CBS based
modules have typically solid quality which improves average module capacity in
most of the cases.
FINANCING
Cash flow from business operations before investments in January – September
2016 was EUR -1.0 million (EUR -2.3 million). Trade receivables at the end of
the reporting period were EUR 0.03 million (EUR 0.4 million). Net financial
items amounted to EUR 1.6 million (EUR 0.6 million).
At the end of September the equity ratio of Valoe Group was -63.7 percent
(-151.2 %) and equity per share was EUR -0.009 (EUR -0.012). The equity ratio
including capital loans was -5.9 percent (-78.7 %). At the end of the reporting
period, the Group’s liquid assets totaled EUR 0.004 million.
The sale of Valoe’s Chinese subsidiaries increased Valoe Group’s result by EUR
7.1 million. The equity ratio including capital loans increased to -5.9
percent.
The financing situation of Valoe has been and continues to be very tight.
According to the company’s management the EUR 15.8 million order received in
February 2016, out of which EUR 9.5 million is paid in cash, turns the
company’s financing situation clearly more stable. However, this is subject to
the company being able to arrange an advance payment guarantee and financing
for building period of this export project.
Valoe has agreed on extending the loan periods of Savcor Group’s convertible
bond of ca. EUR 0.36 million and Savcor Invest B.V.’s loan of EUR 0.32 million
until 31 March 2017.
Valoe negotiates with Danske Bank and Finnvera on extending the overdraft
facility of EUR 0.7 million until 31 March 2017. Further, Valoe negotiates with
Danske Bank and Finnvera on extending the payment schedule of the export credit
limit of EUR 0.35 million that was due on 31 March 2016.
Valoe’s financing situation continues to be tight at least until financing for
building period for the order received from Ethiopia has been arranged and
advance payment relating to the sale has been paid to Valoe. If the company is
able to arrange financing for the delivery time the Ethiopian order will lead
the cash flow from operations to turn positive and according to the management
of the company no other bridging financing would be needed at that point. If
the above-mentioned financing and guarantee for the order from Ethiopia would
not be fully arranged, the company’s financing situation would further tighten
and the continuity of the company’s operation may be jeopardized.
Until financing and guarantee relating to the order from Ethiopia have been
arranged Valoe’s financing situation continues to be very tight and until then
the sufficiency of the company’s financing and working capital for the next
twelve months involve significant risks. Valoe’s financial and other risks have
been handled in the item “Risk management, Risks and Uncertainties” of this
Interim Report.
RESEARCH AND DEVELOPMENT
The knowledge and competence Valoe has gained so far and technological success
of the company’s products have based on significant investments in the research
and development. The module developed by Valoe and its production technology
have already proven to be well functional. Also in the future, commercial
success will highly depend on how well the research and development succeeds.
The ca. EUR 4 million loan granted by Tekes in December 2015 enables Valoe to
continue systematic research and development and to invest in development areas
that fastest improve the company’s market position.
Valoe’s strategically important products have already been tested and are
functional. The objective of Valoe’s research and development is to develop
cell and module technology that further improves the competitiveness of Valoe’s
products and services. The company continues to make significant investments in
research and development and will utilize both national and European research
funding to finance that also in the future.
The Group’s research and development costs during the January – September
period amounted to EUR 1.0 million (EUR 0.9 million) or 27.4 (158.0) percent of
net sales. The research and development costs of the Group’s continuing
operations during the January – September period totaled EUR 1.0 million (EUR
0.9 million) or 27.4 (181.1) percent of net sales.
INVESTMENTS
Gross investments in the continuing operations during January – September
period amounted to EUR 0.4 million (EUR 0.3 million). The investments on the
reporting period as well as on the corresponding period were mainly in
development costs.
PERSONNEL
At the end of September the Group employed 20 (20) people, out of which 19
persons worked in Finland and one person in the USA. During the reporting
period the Group’s salaries and fees totaled EUR 0.9 million (EUR 1.1 million).
SHARES AND SHAREHOLDERS
Valoe’s share capital amounted to EUR 80,000.00 at the end of the reporting
period. The number of shares was 862,472,136. The company has one series of
shares, which confer equal rights in the company. Valoe did not own any of its
own shares at the end of the reporting period.
The company had a total of 7,221 shareholders at the end of September 2016, and
20.4 percent of the shares were owned by foreigners. The ten largest
shareholders held 70.65 percent of the company’s shares and voting rights on 30
September 2016.
The largest shareholders on 30 September 2016
shares percent
1 SAVCOR GROUP OY 259 801 949 30,12
2 SAVCOR COMMUNICATIONS LTD PTY 133 333 333 15,46
3 GASELLI CAPITAL OY 86 300 000 10,00
4 KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA 63 673 860 7,38
5 SAVCOR INVEST B.V. 39 374 994 4,57
6 SCI INVEST OY 6 870 645 0,8
7 FRATELLI OY 6 622 650 0,77
8 NORDEA PANKKI SUOMI OYJ 5 125 344 0,6
9 MANINVEST OY 4 303 870 0,5
10 VUORENMAA ANTERO 3 894 360 0,45
OTHER 253 171 131 29,35
TOTAL 862 472 136 100,00
--------------------------------------------------------------
The list of the largest shareholders does not include e.g. the changes in
ownership that would realize if subscriptions of the Convertible Bond I/2015
approved on 9 October 2015 would be converted to shares at a price of EUR 0.01
in the future. Subscriptions for a total of EUR 7,700,000 were made which
equals to max. 770,000,000 new shares in Valoe.
The members of the Board of Directors and the President and CEO, either
directly or through companies under their control, held a total of 441,879,680
shares in the company on 30 September 2016, representing about 51.2 percent of
the company’s shares and voting rights. Additionally, the members of the Board
of Directors and the President and CEO held a total of 75,500,000 options
connected to the stock option scheme 2015. At the end of the period Iikka
Savisalo, Valoe’s Managing Director, either directly or through companies under
his control, held a total of 439,380,921 shares in the company and 26.500.000
options connected to the stock option scheme 2015.
The price of Valoe’s share varied between EUR 0.009 and 0.049 during the
January – September period. The average price was EUR 0.021 and the closing
price at the end of September EUR 0.014. A total of 266.8 million Valoe shares
were traded at a value of EUR 5.7 million during the January – September
period. The company’s market capitalization at the end of September stood at
EUR 12.1 million.
During 2015 the Board of Directors of Valoe resolved the terms and conditions
of a stock option scheme. The maximum total number of stock options issued is
130,000,000 and they entitle their owners to subscribe for a maximum total of
130,000,000 new shares in the company. The stock options will be issued for
free. Of the stock options, 50,000,000 are marked with the symbol 2015A,
40,000,000 are marked with the symbol 2015B and 40,000,000 are marked with the
symbol 2015C. The Board of Directors shall annually decide upon the
distribution of the stock options to the key employees of the Group.
SHARE ISSUE AUTHORIZATIONS IN FORCE
The Annual General Meeting 2016 resolved to authorize the Board of Directors to
decide on a share issue with and/or without payment, either in one or in
several occasions, so that the number of new shares issued based on the
authorization or number of shares issued based on option rights and other
special rights entitling to the shares pursuant to the Chapter 10, Section 1 of
the Finnish companies Act, would equal to the total maximum amount of
1,000,000,000 shares. The authorization is in force until 30 June 2017.
THE MAJOR EVENTS DURING THE REPORTING PERIOD
2 August 2016: VALOE DISCLOSED A PROFIT WARNING
As previously disclosed Valoe sold its shares in the company’s subsidiaries in
Hong Kong and China to Savcor Tempo Oy, a related company belonging to Savisalo
family, on the second quarter of 2016. The transaction included all related
debts and liabilities, however, excluding the guarantee on lease liability of
max. EUR 0.65 million. The arrangement increased Valoe Group’s EBITDA by
approximately EUR 7.1 million and decreased Valoe Group’s net debts by
approximately EUR 3.9 million. Due to the above mentioned one-off item and
increase in the Group’s calculated financing expenses in accordance with IFRS
and in the other financing expenses Valoe changes its financial guidance for
2016 as follows:
” Valoe estimates that the net sales of Valoe Group will be ca. EUR 11 – 13
million in 2016, the EBITDA ca. EUR 8.6 – 9.4 million and the profit for the
financial year 2016 ca. EUR 5.3 – 6.1 million, provided that the Ethiopian
project is executed as planned.”
Later the estimations of the financial guidance have been decreased pursuant to
the profit warning disclosed on 31 October 2016 (Please see item “The major
events since the end of the reporting period” below).
THE MAJOR EVENTS SINCE THE END OF THE REPORTING PERIOD
31 October 2016: VALOE ESTIMATES ITS NET SALES AND PROFITABILITY TO BE LOWER
THAN PREVIOUSLY DISCLOSED. THE COMPANY REVISES ITS NET SALES AND PROFITABILITY
DUE TO POSTPONEMENT OF THE ETHIOPIAN PROJECT DELIVERY. THE COMPANY’S FINANCING
SITUATION IS VERY TIGHT.
In February 2016 Valoe received a ca. EUR 15.8 million order for a solar module
manufacturing plant and back contact technology. About EUR 9.5 million of the
sales price will be paid in cash to Valoe and the rest of the sales price in
shares of the customer company resulting in Valoe having a 30 percent
shareholding in its Ethiopian manufacturing partner. Valoe’s customer will
receive financing for the deal from The Development Bank of Ethiopia (DBE).
Valoe’s financing situation is very tight. Valoe’s planned financing for the
building period was mainly based on an advance payment of EUR 2.8 million for
which Valoe shall arrange a bank guarantee. Securing an advance payment
guarantee has been delayed. Negotiations for a guarantee and bridging financing
are ongoing and Valoe trusts it will close the negotiations within the next few
weeks.
The delivery has been postponed due to insufficient financing. Valoe and its
manufacturing partner have revised the schedule for completing the Ethiopian
project. According to the re-evaluation the machinery and equipment for the
plant will be delivered in Ethiopia during the first half of the year 2017.
According to the previous estimation the delivery was expected to take place
during the year 2016.
Due to the delay in the Ethiopian project delivery Valoe estimates that the net
sales of Valoe Group will be ca. EUR 5.5 – 6.0 million in 2016 (in 2015: EUR
0.7 million) and the EBITDA ca. EUR 6.5 – 7.0 million (in 2015: EUR -2.8
million). The financial year 2016 is estimated to be profitable with profit for
the financial year 2016 of ca. EUR 3.2 – 3.7 million (in 2015: EUR -4.7
million). All figures for the comparison year concern the continuing
operations.
Previously Valoe has estimated that the net sales of Valoe Group will be ca.
EUR 11 – 13 million in 2016 (in 2015: EUR 0.7 million) and the EBITDA ca. EUR
8.6 – 9.4 million (in 2015: EUR -2.8 million). The financial year 2016 is
estimated to be profitable with profit for the financial year 2016 of ca. EUR
5.3 – 6.1 million (in 2015: EUR -4.7 million). The financial guidance was
subject to the Ethiopian project being executed as planned.
Until the above-mentioned bridging financing and an advance payment guarantee
have been secured Valoe’s financing situation continues to be very tight and
until then the sufficiency of the company’s financing and working capital for
the next twelve months involve very significant risks. If the above-mentioned
financing and guarantee for the order from Ethiopia would not be fully
arranged, the company’s financing situation would further tighten and the
continuity of the company’s operation may be jeopardized.
RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Valoe’s Board of Directors is responsible for the control of the company’s
accounts and finances. The Board is responsible for internal control, while the
President and CEO handles the practical arrangement and monitors the efficiency
of internal control. Business management and control are taken care of using a
Group-wide reporting and forecasting system.
The purpose of risk management is to ensure that any significant business risks
are identified and monitored appropriately. The company’s business and
financial risks are managed centrally by the Group’s financial department, and
reports on risks are presented to the Board of Directors as necessary.
Due to the small size of the company and its business operations, Valoe does
not have an internal auditing organization or an audit committee.
Valoe’s objective is to achieve a strong market position as a provider of, in
various geographical areas, locally produced high-quality photovoltaic modules.
Achievement of the objectives involves risks. Even though Valoe's strategy and
objectives are based on market knowledge and technical surveys, the risks are
significant and it is not certain if the company reaches all or part of the
targets set for it. Valoe's future outlook will be highly dependent on the
company's ability to reach the targeted market position in the global
photovoltaic module market as well as on the company's financing.
According to the management of the company the EUR 15.8 million order for a
module manufacturing plant received from Ethiopia in February 2016, out of
which EUR 9.5 million is paid in cash, turns the company’s cash flow from
operations positive if the order is realized as planned. However, Valoe has to
arrange an advance payment guarantee for the order and financing for building
period in addition to the payment terms arrangements agreed on with the
company’s main suppliers. Until all of the aforesaid financing and guarantee
has been arranged Valoe’s financing situation continues to be very tight and
until then the sufficiency of the company’s financing and working capital for
the next twelve months involve very significant risks. If the above mentioned
financing and guarantee for the order from Ethiopia would not be arranged, the
company’s financing situation would further tighten and the continuity of the
company’s operation may be jeopardized.
The financial negotiations with Finnvera and Danske Bank involve risks. If the
overdue limits shall not be rescheduled the company’s financing situation
tightens remarkably.
In the Auditor’s Report in the Annual Report 2015 the company’s auditor drew
attention to the financial risk management, among others, with a so called
Emphasis of Matter as follows: “We draw attention both to the report of the
Board of Directors section “Risk management, Risks and Uncertainties” and to
the Note 29 “Financial risk management”. As described in these paragraphs, the
financial situation of the company is severe and the financing arrangements of
the company are unfinished. As a result, there are significant risks in the
adequacy of 12 months financing and in the ability of the company to continue
its operations on a going concern basis. The financial statements of the
company are prepared based on a going concern assumption. If the conditions for
going concern cannot be secured, the values of assets in the financial
statements of the company may need to be changed.”
The module manufacturing plant order from Ethiopia involves business,
financial, schedule and country risks that are typical of international
equipment sales. Until financing arrangements, guarantees and other
arrangements for the Ethiopian order have been secured Valoe’s financing
situation continues to be very tight and until then the sufficiency of the
company’s financing and working capital for the next twelve months involve very
significant risks. If the company does not succeed to secure sufficient
financing for the building period of the order from Ethiopia, the continuity of
the company’s operation may be jeopardized.
The certain statements in this release and especially the company’s financial
guidance as well as non-binding estimations in Valoe’s strategy are targeted to
the future and based on the management’s current estimations. They involve
risks and uncertainty by their nature and may be affected by changes in general
financial situation or business environment.
Other risks connected to Valoe have been presented in more detail in the Annual
Report for 2015.
MARKET OUTLOOK
Valoe estimates that the net sales of Valoe Group will be ca. EUR 5.5 – 6.0
million in 2016 (2015: EUR 0.7 million) and the EBITDA ca. EUR 6.5 – 7.0
million (2015: EUR-2.8 million). The financial year 2016 is estimated to be
profitable with profit for the financial year 2016 of ca. EUR 3.2 – 3.7
million (in 2015: EUR -4.7 million). All figures for the comparison year
concern the continuing operations. The financial guidance is subject to the
Ethiopian project to be executed as planned.
In Mikkeli, 2 November 2016
Valoe Corporation
BOARD OF DIRECTORS
For more information please contact:
Valoe: Iikka Savisalo, President and CEO, tel. +358 40 521 6082,
iikka.savisalo@valoe.com
Accounting principles
(unaudited)
Revenue recognition principles
The revenue generated by the Ethiopian project is recorded as sales under the
percentage of completion method. The Ethiopian project has been subdivided into
smaller projects whose physical percentage of completion is reviewed monthly.
The percentage of completion is determined based on pre-planned
milestones/actions and objectives.
Revenue is recognized based on determined percentage of completion and, if
necessary, a provision is recognized to avoid exceeding the estimated margin of
the project.
The presentation of the Ethiopia project in the balance sheet is defined during
Q2 2016, the receivables and liabilities related to the revenue recognition of
the project are offset.
Application of the going concern assumption
The financial statements of the company are prepared on a going concern
assumption. The financing situation of Valoe has been and continues to be very
tight. According to the company’s management the EUR 15.8 million order
received in February 2016, out of which EUR 9.5 million is paid in cash, turns
the company’s financing situation clearly more stable. However, this is subject
to the company being able to arrange an advance payment guarantee and financing
for building period of this export project.
Valoe’s financing situation continues to be tight at least until financing for
building period for the order received from Ethiopia has been arranged and
advance payment relating to the sale has been paid to Valoe. If the company is
able to arrange financing for the delivery time the Ethiopian order will lead
the cash flow from operations to turn positive and according to the management
of the company no other bridging financing would be needed at that point.
If the conditions for going concern cannot be secured, the values of assets in
the financial statements of the company, including the revenue recognition of
the Ethiopian project, may need to be changed.
Consolidated statement of comprehensive income
(unaudited)
1 000 EUR 7-9/2016 7-9/2015 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing
operations
Net sales 1 058 163 3 780 523 699
Cost of sales -643 -240 -2 119 -674 -937
--------------------------------------------------------------------------------
Gross profit 415 -77 1 661 -151 -237
Other operating 3 1 7 173 872 150
income
Product development -430 -307 -1 034 -947 -1 078
expenses
Sales and marketing -159 -144 -564 -484 -686
expenses
Administrative -203 -168 -592 -724 -982
expenses
Other operating -136 -10 -607 -12 -705
expenses
Operating profit -510 -704 6 036 -1 447 -3 540
Financial income 1 104 7 215 306
Financial expenses -547 -277 -1 604 -802 -1 497
Profit before taxes -1 056 -877 4 439 -2 035 -4 731
from continuing
operations
Income taxes 0 0 18 1 0
Profit/loss for the -1 056 -877 4 457 -2 034 -4 731
period from
continuing
operations
Discontinued
operations
Profit/loss after 16 12 -159 -111 -91
tax for the period
from discontinued
operations
Profit/loss for the -1 040 -866 4 299 -2 145 -4 822
period
--------------------------------------------------------------------------------
Profit/loss
attributable to:
Shareholders of the -1 040 -866 4 299 -2 145 -4 822
parent company
Earnings/share -0,001 -0,001 0,003 -0,002 -0,006
(diluted), eur
Earnings/share -0,001 -0,001 0,005 -0,002 -0,006
(basic), eur
Continuing
operations:
Earnings/share -0,001 -0,001 0,003 -0,002 -0,005
(diluted), eur
Earnings/share -0,001 -0,001 0,005 -0,002 -0,005
(basic), eur
Profit/loss for the -1 040 -866 4 299 -2 145 -4 822
period
Other comprehensive
income
Translation 0 -28 750 -362 -468
difference
Net other comprehensive income to be
reclas-
sified to profit or 0 -28 0 -362 -468
loss in subsequent
periods
Total comprehensive -1 040 -894 5 048 -2 507 -5 290
income for the
period
--------------------------------------------------------------------------------
Total comprehensive
income attributable
to:
Shareholders of the -1 040 -894 5 048 -2 507 -5 290
parent company
Consolidated statement of financial position
(unaudited)
1 000 EUR 30.9.2016 30.9.2015 31.12.2015
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 15 52 64
Consolidated goodwill 441 441 441
Other intangible assets 8 299 3 682 3 737
Holdings in associated companies 142 0 0
Available-for-sale investment 9 9 9
Total non-current assets 8 906 4 185 4 251
--------------------------------------------------------------------------------
Current assets
Inventories 131 117 254
Trade and other non-interest-bearing 2 801 1 799 799
receivables
Cash and cash equivalents 4 976 31
Total current assets 2 935 2 891 1 084
--------------------------------------------------------------------------------
Assets classified as held for sale 0 27 0
Total assets 11 842 7 103 5 336
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to shareholders of the
parent company
Share capital 80 80 80
Other reserves 0 0 0
Translation difference 0 -644 -750
Retained earnings -7 611 -10 170 -11 910
-7 531 -10 735 -12 579
--------------------------------------------------------------------------------
Non-controlling interests 0 9 9
Total equity -7 531 -10 726 -12 570
--------------------------------------------------------------------------------
Non-current liabilities
Non-current loans 9 288 5 035 7 222
Other non-current liabilities 105 0 0
Deferred tax liabilities 0 -1 0
Total non-current liabilities 9 392 5 034 7 222
--------------------------------------------------------------------------------
Current liabilities
Current interest-bearing liabilities 4 652 5 397 3 131
Trande and other payables 4 742 6 799 7 030
Current provisions 0 0 0
Total current liabilities 9 395 12 195 10 162
--------------------------------------------------------------------------------
Liabilities directly associated with assets 586 600 522
classified as held for sale
Total liabilities 19 373 17 829 17 906
--------------------------------------------------------------------------------
Equity and liabilities total 11 842 7 103 5 336
--------------------------------------------------------------------------------
Consolidated statement of cash flows
(unaudited)
1 000 EUR 1-9/20 1-9/20 1-12/2
16 15 015
--------------------------------------------------------------------------------
Cash flow from operating activities
Income statement profit/loss from continuing 4 439 -2 035 -4 731
operations before taxes
Income statement profit/loss from discontinued -159 -111 -91
operations before taxes
Income statement profit/loss before taxes 4 280 -2 145 -4 822
-----------------------
Non-monetary items adjusted on income statement
--------------------------------------------------------------------------------
Depreciation and + 778 662 696
impairment
Gains/losses on disposals +/- -7 074 0 0
of non-current assets
Unrealized exchange rate +/- -11 -230 -311
gains (-) and losses (+)
Other non-cash +/- 531 -746 684
transactions
Change in provisions +/- -31 -89 -86
Financial income and + 1 608 817 1 502
expense
Total cash flow before change in working capital 80 -1 731 -2 337
--------------------------------------------------------------------------------
Change in working capital
Increase (-) / decrease 123 -22 -159
(+) in inventories
Increase (-) / decrease -2 596 958 1 076
(+) in trade and other
receivables
Increase (+) / decrease 1 471 -1 225 -1 358
(-) in trade and other
payables
Change in working capital -1 002 -289 -441
--------------------------------------------------------------------------------
Adjustment of financial items and taxes to cash-based
accounting
Interest paid - 85 194 294
Interest received + 0 1 1
Other financial items - 17 60 68
Taxes paid - -18 0 3
Financial items and taxes -84 -253 -364
--------------------------------------------------------------------------------
NET CASH FLOW FROM BUSINESS OPERATIONS -1 005 -2 273 -3 142
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible and intangible assets - 368 289 396
Proceeds on disposal of tangible and intangible + 0 34 34
assets
Loans granted - 0 160 160
Repayment of loan receivables + 0 263 263
Acquisition of subsidiaries and other business - 672 0 0
units
Disposal of + -23 640 640
subsidiaries and other
business units
----------------------------
NET CASH FLOW FROM INVESTMENTS -1 063 488 381
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from non-current borrowings + 808 3 258 3 381
Repayment of non-current borrowings - 0 8 8
Proceeds from current borrowings + 1 748 44 265
Repayment of current borrowings - 527 695 1 004
NET CASH FLOW FROM FINANCING ACTIVITIES 2 029 2 599 2 634
--------------------------------------------------------------------------------
INCREASE (+) OR DECREASE (-) IN CASH FLOW -39 813 -127
Consolidated statement of changes in equity
(unaudited
)
1 000 EUR Share Other Transl Distribut Retaine Total Non-co Total
capit reser ation able d ntroll equity
al ves diffe non-rest earnin ing
rence ricted gs inter
equity ests
fund
--------------------------------------------------------------------------------
31.12.2015 80 0 -750 0 -11 910 -12 579 9 -12 570
Profit/los - - - - 4 298 4 298 0 4 298
s for the
period
Translatio - - 750 - 0 750 -9 741
n
differenc
e,
comprehen
sive
income
30.9.2016 80 0 0 0 -7 611 -7 531 0 -7 531
The presentation of the own equity component of the convertible bond is defined
during Q3 2015, they are transfered from distributable non-restricted equity
fund to retained eranings. After the transfer the value of the distributable
non-restricted equity fund is zero also in consolidated accounts.
1 000 EUR Share Other Transl Distribut Retaine Total Non-co Total
capit reser ation able d ntroll equity
al ves diffe non-rest earnin ing
rence ricted gs inter
equity ests
fund
--------------------------------------------------------------------------------
31.12.2014 3 425 4 908 -281 44 552 -62 500 -9 896 8 -9 888
Profit/los - - - - -2 145 -2 145 0 -2 145
s for the
period
Translatio - - -362 - 0 -362 0 -362
n
differenc
e,
comprehen
sive
income
Transactio
ns with
owners:
Own equity 0 1 670 1 670 0 1 670
component
of the
convertib
le bond
Reduction -3 345 -4 908 0 -44 032 52 285 0 0
of share
capital
Share - - - -520 520 0 - 0
issue
expenses
30.9.2015 80 0 -644 0 -10 170 -10 735 9 -10 726
Segment
information
(unaudited)
From 1 January 2013 Valoe reported of three business segments to comply with the
company's Cleantech strategy. The segments were Laser and Automation
Applications (LAS), Life Cycle Management (LCM) and Clean Energy (CCE). 17
September Valoe announced that it has transfered the company's electronics
automation business into Cencorp Automation Oy, a fully-owned subsidiary of
Valow. Further, in accordance to the agreement signed earlier, FTTK Company
Limited has purchased 70 percent of the shares in Cencorp Automation Oy.
Further FTTK has used its option to purchase the remaining 30 percent of the
shares in Cencorp Automation Oy and the parties have signed an agreement on
exercising the option in December 2014. In consequence of the sale of the
shares Valoe reports the financial figures relating to the electronics
automation business, i.e. LAS and LCM segments, as discontinued operations from
Q3/2014 and segment information is divided into continuing and discontinued
operations. Segment information is not available after operating profit in
profit and loss statement. Financial income and expenses or balance sheet items
are not booked to segments. Valoe's new segment information is based on the
management's internal reporting and on the organisation structure. During the
years 2016 and 2015 the discontinued operations include the finishing up of few
remaining projects of the electronics automation business sold to FTTK and
finalising the sale of the shares.
1 000 EUR 7-9/2016 7-9/2015 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Net sales
Valoe 1 058 163 3 780 523 699
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 18 0 76 113
ued
operatio
ns
Total 1 058 181 3 780 599 812
Operating
profit
Valoe -510 -704 6 036 -1 447 -3 540
Clean
Energy
-
continui
ng
operatio
ns
Discontin 16 12 -159 -111 -91
ued
operatio
ns
Total -494 -693 5 877 -1 558 -3 631
EBITDA
Valoe -175 -486 6 814 -785 -2 844
Clean
Energy
-
continui
ng
operatio
ns
Discontin 16 12 -159 -111 -91
ued
operatio
ns
Total -158 -474 6 655 -896 -2 935
Depreciation
Valoe 335 219 778 662 696
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 0 0 0 0
ued
operatio
ns
Total 335 219 778 662 696
Impairment
Valoe 0 0 0 0 0
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 0 0 0 0
ued
operatio
ns
Total 0 0 0 0 0
Discontinued
operations
(unaudited)
17 September Valoe announced that it has transfered the company's electronics
automation business into Cencorp Automation Oy, a fully-owned subsidiary of
Valoe. Further, in accordance to the agreement signed earlier, FTTK Company
Limited has purchased 70 percent of the shares in Cencorp Automation Oy.
Further FTTK has used its option to purchase the remaining 30 percent of the
shares in Cencorp Automation Oy and the parties have signed an agreement on
exercising the option in December 2014. In consequence of the sale of the
shares Valoe reports the financial figures relating to the electronics
automation business as discontinued operations from Q3/2014.
During the years 2016 and 2015 the discontinued operations include the finishing
up of few remaining projects of the electronics automation business sold to
FTTK and finalising the sale of the shares.
The results and major classes of assets and liabilities of Cencorp's electronics
automation business are as follows:
1 000 EUR 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Revenue 0 76 113
Expenses -159 -187 -204
Operating -159 -111 -91
profit/loss from
discontinued
operation
--------------------------------------------------------------
Assets
Property, plant 0 0 0
and equipment
Other intangible 0 0 0
assets
Inventories 0 0 0
Trade and other 0 27 0
non-interest-bea
ring receivables
Cash and cash 0 0 0
equivalents
Assets classified 0 27 0
as held for sale
--------------------------------------------------------------
Liabilities
Trande and other 558 544 463
payables
Provisions 28 56 59
Liabilities 586 600 522
directly
associated with
assets
classified as
held for sale
--------------------------------------------------------------
Net assets -586 -573 -522
directly
associated with
disposal group
--------------------------------------------------------------
Cumulative
translation
difference
Net cash flow of
Cencorp's
electronics
automation
business:
1 000 EUR 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Operating -120 -445 -536
Investing 0 96 96
Earnings/share -0,0002 -0,0001 -0,0001
(basic), from
discontinued
operations
Earnings/share -0,0001 -0,0001 -0,0001
(diluted) from
discontinued
operations
Key figures
(unaudited)
1 000 EUR 7-9/201 7-9/2015 1-9/201 1-9/2015 1-12/201
6 6 5
--------------------------------------------------------------------------------
Net sales 1 058 163 3 780 523 699
Operating profit -510 -704 6 036 -1 447 -3 540
% of net sales -48,2 % -432,2 % 159,7 % -276,8 % -506,4 %
EBITDA -175 -486 6 814 -785 -2 844
% of net sales -16,5 % -297,9 % 180,3 % -150,2 % -406,8 %
Profit before taxes -1 056 -877 4 439 -2 035 -4 731
% of net sales -99,8 % -538,2 % 117,4 % -389,1 % -676,8 %
Balance Sheet value 11 842 7 103 11 842 7 103 5 336
Equity ratio, % -63,7 % -151,2 % -63,7 % -151,2 % -235,7 %
Net gearing, % neg. neg. neg. neg. neg.
Gross investments (continuing 127 104 411 296 395
operations)
% of net sales 12,0 % 63,7 % 10,9 % 56,5 % 56,5 %
Research and development costs 430 307 1 034 947 1 078
(continuing oper.)
% of net sales 40,7 % 188,2 % 27,4 % 181,1 % 154,2 %
Order book 12 609 9 12 609 9 45,58
Personnel on average 21 21 21 23 22
Personnel at the end of the 20 20 20 20 20
period
Non-interest-bearing liabilities 5 944 7 343 5 944 7 343 7 493
Interest-bearing liabilities 13 401 10 431 13 401 10 431 10 354
Share key indicators
Earnings/share (basic) -0,001 -0,001 0,003 -0,002 -0,006
Earnings/share (diluted) -0,001 -0,001 0,005 -0,002 -0,006
Earnings/share (basic), from -0,001 -0,001 0,003 -0,002 -0,005
continuing operations
Earnings/share (diluted) from -0,001 -0,001 0,005 -0,002 -0,005
continuing operations
Equity/share -0,009 -0,012 -0,009 -0,012 -0,015
P/E ratio -11,61 -13,95 2,81 -5,63 -3,40
Highest price 0,017 0,016 0,049 0,020 0,020
Lowest price 0,010 0,012 0,009 0,007 0,007
Average price 0,015 0,014 0,021 0,012 0,013
Closing price 0,014 0,014 0,014 0,014 0,019
Market capitalisation, at the 12,1 12,1 12,1 12,1 16,4
end of the period, MEUR
Calculation of Key Figures
EBITDA, %: Operating profit + depreciation +
impairment
---------
Net
sales
--------------------------------------
Equity ratio, %: Total equity x
100
---------
Total assets - advances
received
--------------------------------------
Net gearing, %: Interest-bearing liabilities - cash and cash
equivalents
and marketable securities
x 100
Shareholders' equity +
non-controlling interests
-----------------------------------------------
Earnings/share (EPS): Profit/loss for the period to the owner of the
parent company
Average number of shares adjusted for share
issue
-----------------------------------------------
at the end of the
financial year
Equity/share: Equity attributable to shareholders of the
parent company
Undiluted number of shares on the balance
sheet date
-----------------------------------------------
P/E ratio: Price on the balance sheet
date
---------
Earnings per
share
--------------------------------------
Related party
transactions
(unaudited)
The Group has sold and purchased goods and services from companies in which the
majority holding and/or power of decision granting control of the company is
held by members of the Group's related parties. Sales of goods and services
carried out with related parties are based on market prices.
The Group entered into the following
transactions with related parties:
1 000 EUR 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing
operations
Sales of goods and
services
Savcor companies - 29 68 92
financial
management and
production
services
Savcor Face Ltd - -2 36 36
solar modules /
production
services
Others 1 0 0
Total 27 104 128
Purchases of goods
and services
Savcor companies - 86 144 227
financial
management, legal
and IT services
Savcor Face Ltd - 25 43 51
marketing services
SCI-Finance Oy - 70 66 98
marketing and
administration
services
Savcor Technologies 31 0 0
Oy - marketing and
administration
services
Oy Marville Ab - 53 12 30
legal services
Others - 0 10 0
administration
service
Total 265 275 405
Gain on disposal
Savcor Tempo Oy -300 0 0
Interest income
Savcor companies 0 1 1
Interest expenses
and other
financial expenses
Savcor companies 115 111 162
SCI Invest Oy 51 45 57
SCI-Finance Oy - 50 4 4
funding
Savcor Technologies 52 2 5
Oy
Savcor 41 0 0
Communications Pty
Ltd
Savcor Tempo Oy 14 0 0
Others 53 31 49
Total 376 193 277
Discontinued
operations
Purchases of goods
and services
Savcor companies - 0 7 7
financial
management, legal
and IT services
SCI-Finance Oy - 3 8 9
administration
services
Others 2 1 1
Total 6 16 18
1 000 EUR 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Non-current 2 282 1 696 1 882
convertible
subordinated loan
from related
parties
Non-current 37 0 0
interest payable
to related parties
Current convertible 364 364 364
subordinated loan
from related
parties
Other current 2 373 1 270 705
liabilities to
related parties
Current interest 510 282 156
payable to related
parties
Trade payables and 475 545 197
other
non-interest-beari
ng liabilities to
related parties
Trade and other 17 94 25
current
receivables from
related parties
From the beginnin of 2015 Savcor Group Limited in Australia is no longer part of
Savcor Group, and liabilities to the company are not included in related party
transactions.
Savcor companies are under influence of Iikka Savisalo, Valoe's CEO and Hannu
Savisalo, Valoe's Chairman of the Board .
SCI Invest Oy is a company under control of Iikka Savisalo, Cencorp's CEO.
Savcor Face Ltd is a company under control of Iikka Savisalo, Valoe's CEO and
Hannu Savisalo, Valoe's Chairman of the Board.
SCI-Finance Oy is a company under control of Hannu Savisalo, Valoe's Chairman of
the Board.
Savcor Technologies Oy is a company under control of Iikka Savisalo, Valoe's CEO
and Hannu Savisalo, Valoe's Chairman of the Board.
Savcor Communications Pty Ltd is a company under control of Iikka Savisalo,
Valoe's CEO and Hannu Savisalo, Valoe's Chairman of the Board.
Savcor Tempo Oy is a company under control of Iikka Savisalo, Valoe's CEO and
Hannu Savisalo, Valoe's Chairman of the Board.
Oy Marville Ab is a company under control of Ville Parpola, Valoe's Vice
chairman of the Board.
1 000 EUR 1-9/2016 1-9/2015 1-12/2015
--------------------------------------------------------------------------------
Wages and
remuneration
Salaries of the 548 566 856
management and
Board
The presentation of the salaries of the management and Board has been changed
from receipts basis to accrual basis at year end 2015, also for the comparison
period Q3 2015.
Fair values
(unaudited)
Carrying Fair value
amount
1 000 EUR 30.9.2016 30.9.2016
--------------------------------------------------------------------------------
Financial assets
Available-for-sale investments 9 9
Trade and other receivables 2 801 2 801
Cash and cash equivalents 4 4
The presentation of the Ethiopia project in the balance sheet is defined during
Q2 2016, the receivables and liabilities related to the revenue recognition of
the project are offset.
Financial liabilities
R&D loan, non-current 2 820 2 820
Non-current convertible subordinated loan 6 468 6 468
Loans from financial institutions, current 1 370 1 370
Current convertible subordinated loan 364 364
Other liabilities, current 2 669 2 669
Trade payables and other non-interest-bearing 2 796 2 796
liabilities
The fair value of non-current liabilities is expected to correspond to the
carrying amount and recognized to their fair value when recorded. There has
been no significant change in common interest rate after the withdrawal of the
loans.
EUR 3.1 million out of trade payables, other current liabilites and accruals was
overdue at the end of the reporting period. In addition, an export credit limit
of EUR 0,3 million and overdraft limit of EUR 0,7 million to Danske Bank and
EUR 0,2 million of other liabilities were overdue.
Change in intangible and tangible assets
(unaudited)
1 000 EUR 30.9.2016 30.9.2015 31.12.2015
--------------------------------------------------------------------------------
Includes tangible assets, consolidated
goodwill and other intangible assets
Carrying amount, beginning of period 4 242 4 577 4 577
Depreciation and impairment -778 -662 -696
Additions 411 295 395
Realization of an internal margin 4 931 -34 0
Disposals -47 0 -34
Exchange rate difference -4 0 0
Carrying amount, end of period 8 755 4 176 4 242
Commitments and contingent liabilities
(unaudited)
1 000 EUR 30.9.2016 30.9.2015 31.12.2015
-------------------------------------------------------------------------------
Loans from financial institutions 721 950 950
Promissory notes secured by pledge 12 691 12 691 12 691
Factoring loan and export credit limit 349 648 448
Trade receivables 0 0 0
Deposits 0 100 0
Promissory notes secured by pledge 12 691 12 691 12 691
Collaterals given from other short-term loans
Deposits 0 505 509
Commitments - continuing operations
Payable within one year 61 63 61
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