2016-08-03 12:30:01 CEST
2016-08-03 12:30:01 CEST
REGULATED INFORMATION
Valoe Oyj - Half Year financial report
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 30 JUNE 2016
Valoe Corporation Interim Report
3 August 2016
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 30 JUNE 2016
SUMMARY
- The restructuring of Valoe Corporation (“Valoe”) from a company providing
electronics automation solutions to a technology company focusing on clean
energy solutions, particularly on photovoltaic technologies, was completed
during 2015. Now Valoe is a technology startup which, 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 its 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.
- During the reporting period 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.
- During the first six months of 2016 Valoe Group’s net sales increased to EUR
2.7 million as the sales on the Finnish solar energy market increased and the
Ethiopian project started generating revenue. The EBITDA of the continuing
operations increased to EUR 7.0 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 -0.2 million.
- On the reporting period, after building and training a network of sales
representatives and establishing cooperation with companies interested in
Valoe’s technology, Valoe started selling the company’s solar power plants and
modules in Finland. Valoe trusts it will be successful also on the Finnish
solar power market that is still undeveloped.
- Valoe estimates that the net sales of Valoe Group will be ca. EUR 11 – 13
million in 2016 and the EBITDA ca. EUR 8.6 – 9.4 million. The profit for the
financial year 2016 is estimated to be ca. EUR 5.3 – 6.1 million.
- Valoe’s financial situation continues to be very tight. However, Valoe’s
management views that if the company will be able to arrange an advance payment
guarantee and financing of EUR 2 – 4 million for building period of the
Ethiopian project the company’s financing situation stabilizes. Valoe has not
yet been able to collect the aforesaid funding. Valoe’s operations and the
Ethiopian project have so far been funded by increased sales revenue and loans
taken from related parties and investors. Additionally Valoe has been able to
negotiate good payment terms with its suppliers, which has facilitated the
progress of the Ethiopian project. For the moment the project proceeds as
expected despite the company’s tight financing situation.
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.
CHANGES IN THE GROUP STRUCTURE
Valoe sold 100 percent of the shares in Savcor Pacific Ltd, a Hong Kong
subsidiary of Valoe, to Savcor Tempo Oy that is 100 percent owned by the
Savisalo Family. Savcor Pacific owns 100 percent of the shares in the Chinese
subsidiary, Savcor Face (Beijing) Co., Ltd. Both Chinese companies as well as
the debts and liabilities related to their operations, excluding a guarantee on
lease liability, were transferred to Savcor Tempo Oy. The guarantee amounts to
EUR 0.65 million at the most.
After the subsidiaries in China were sold Valoe Group includes practically only
the mother company, Valoe Corporation. The US subsidiary employs only one
person. It has no invoicing and the subsidiary’s costs are paid in Finland.
Valoe owns also one non-operative company in Finland.
FINANCIAL RESULT IN JANUARY – JUNE 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.
Valoe pays Savcor Tempo Oy a total of EUR 0.3 million by the end June 2017 for
taking over the debts and liabilities of the Chinese subsidiary. The negative
sales price is estimated to compensate the buyer for the costs from the Chinese
company’s closing process that probably will take several years. An annual
interest rate of 12 percent will be paid on the debt.
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.
April – June 2016 (continuing operations)
- Valoe Group’s net sales increased by 360 percent to EUR 1.1 million (In 2015:
EUR 0.2 million).
- EBITDA was EUR 7.0 million (EUR -0.5 million).
- Operating profit was EUR 6.7 million (EUR -0.7 million).
- The profit before taxes was EUR 6.1 million (EUR -1.0 million).
- Profit for the period was EUR 6.1 million (EUR -1.0 million).
January – June 2016 (continuing operations)
- Valoe Group’s net sales increased by 656 percent to EUR 2.7 million (In 2015:
EUR 0.4 million).
- EBITDA was EUR 7.0 million (EUR -0.3 million).
- Operating profit was EUR 6.5 million (EUR -0.7 million).
- The profit before taxes was EUR 5.5 million (EUR -1.2 million).
- Profit for the period was EUR 5.5 million (EUR -1.2 million).
- Earnings per share were EUR 0.006 (EUR -0.001) and diluted earnings per share
EUR 0.004 (EUR -0.001).
MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW
The second quarter of 2016 was busy time for Valoe. The company focused on
arranging financing for the Ethiopian project and running the project as well
as looking for new manufacturing partners.
Valoe has previously announced that it received ca. EUR 1.3 million financing
to launch the Ethiopian project. The required project financing totals EUR 2 –
4 million as previously has been disclosed. It has now appeared to be
challenging to collect the financing and Valoe has had to arrange the financing
in parts. This has turned the company’s financing situation very tight from
time to time. However, in addition to the above-mentioned already secured
financing, Valoe has succeeded in increasing sales revenues in Finland and
agreeing on backloaded payment terms with the company’s main suppliers and thus
bridging the funding gap.
The actual project has started well. To strengthen the project organisation
Valoe recruited a project manager in May who has taken up his new demanding
post with great energy and determination. Valoe’s own project organisation and
main suppliers have mainly been able to keep to the schedule regardless of
difficulties generated by the funding gap.
Valoe’s strategy is to find 6 – 8 manufacturing partners whose total annual
capacity exceeds 1.5 GWp. Valoe has estimated that it will take about five
years to establish this kind of partner network. Since the closing of the
Ethiopian deal Valoe has made progress in its negotiations with several new
potential manufacturing partners.
Valoe is continuously in contact with several world’s leading solar module
manufacturers in both China and elsewhere and negotiates various cooperation
opportunities. Valoe will disclose a release if these connections seem to lead
to concrete actions.
Valoe’s turnover started to increase during the first six months of 2016 as the
Ethiopian project started to generate revenue and the demand for solar
electricity started to grow in Finland. The Ethiopian project’s revenue
recognition principles are described in this Interim Report’s attachment
(numbers).
During the second half of the year 2015 Valoe started to build a sales channel
for its solar power systems systematically in Finland. The company has signed
distribution agreements around Finland and trained retailers to become
professionals in the field of solar electricity. The efficiency of the new
sales channel is based on close cooperation between Valoe and companies that
are enthusiastic about solar power systems sales and already have good
reputation for selling similar products and services. The sales channel
established based on Valoe’s sales strategy is now almost ready and deliveries
through the new sales channel have commenced. With the help from Valoe’s
distributors and other partners interested in Valoe’s advanced technology,
Valoe trusts it will be able to reach major part of the Finnish customers
planning to start using solar power.
On the reporting period Valoe’s research and development has mainly been
concentrated on supporting the Ethiopian project delivery. Valoe has also
commenced designing the second generation of MWT solar modules. The objective
is to create an MWT solar module with longer lifetime and increased capacity.
The main reason to invest in a new module model is to increase technological
and economical lead over traditional modules; to improve competitiveness of the
ecosystem using conductive back sheets, and thus reduce the price of solar
electricity remarkably.
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.
Despite the growth and improved profitability the company’s financial situation
has been very tight during and after the reporting period. The company’s
management trusts that the working capital situation will improve and the cash
flow from operations turns positive when the funding for the Ethiopian project
is available to the company, or at the latest when the Ethiopian production
line delivery has passed the tests in Finland and is ready for shipping. Valoe
has moved on to the implementation phase of its strategy. Valoe’s management
believes the company will grow fast. The management also views that the growth
will be profitable, which gradually improves the company’s financial situation.
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.
General attitude to the solar energy investments started to improve clearly
already at the end of 2013. The same trend continued the whole year 2014 and
seems to be continuing to grow. 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 company’s view
strengthened during 2015 and the order from Ethiopia in February 2016 further
strengthens this view. Many of the mega trends such as 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 and adopt legislation favouring local
production. 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 – June 2016
was EUR -1.0 million (EUR -1.0 million). Trade receivables at the end of the
reporting period were EUR 0.04 million (EUR 0.4 million). Net financial items
amounted to EUR 1.1 million (EUR 0.4 million).
At the end of June the equity ratio of Valoe Group was -55.1 percent (-174.6 %)
and equity per share was EUR -0.008 (EUR -0.013). The equity ratio including
capital loans was -3.4 percent (-116.6 %). At the end of the reporting period,
the Group’s liquid assets totaled EUR 0.004 million.
The sale of Valoe’s Chinese subsidiaries taken place during the reporting
period increased Valoe Group’s result by EUR 7.1 million. The equity ratio
including capital loans increased to -3.4 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 and the Finnish Funding Agency for Innovation, Tekes agreed on new
funding for Valoe’s research and development in December 2015. Tekes gives
Valoe a subsidized loan of ca. EUR 4 million to further develop photovoltaic
modules and to develop solar cells based on the back contact technology. The
loan can amount to max. 70 per cent of the project’s total costs which are
estimated to be ca. EUR 5.8 million. The loan will be withdrawn in 2016 - 2019.
The loan period is seven years. The loan interest rate is the base rate less 3
percent, but not less than 1 percent.
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 exteding the overdraft
facility of EUR 0.7 million available to the company until 31 March 2017.
Further, Valoe negotiates with Danske Bank on extending the payment schedule of
the export credit limit of EUR 0.35 million that was due on 31 March 2016.
The company has planned to get long-term financing to finance the company’s
growth by arranging a share issue. 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 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.
Until financing and guarantee relating to the order from Ethiopia have been
arranged Valoe’s financing situation continues to be 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 – June period
amounted to EUR 0.6 million (EUR 0.6 million) or 22.2 (153.1) percent of net
sales. The research and development costs of the Group’s continuing operations
during the January – June period totaled EUR 0.6 million (EUR 0.6 million) or
22.2 (177.8) percent of net sales.
INVESTMENTS
Gross investments in the continuing operations during January - June period
amounted to EUR 0.3 million (EUR 0.2 million). The investments on the reporting
period as well as on the corresponding period were mainly in development costs.
PERSONNEL
At the end of June the Group employed 22 (22) people, out of which 21 persons
worked in Finland and one person in the USA. During the reporting period the
Group’s salaries and fees totaled EUR 0.7 million (EUR 0.8 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 6,990 shareholders at the end of June 2016, and 20.4
percent of the shares were owned by foreigners. The ten largest shareholders
held 73.75 percent of the company’s shares and voting rights on 30 June 2016.
The largest shareholders on 30 June 2016
shares percent
1 SAVCOR GROUP OY 282 200 871 32,72
2 SAVCOR COMMUNICATIONS LTD PTY 133 333 333 15,46
3 GASELLI CAPITAL OY 91 218 068 10,58
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 5 222 442 0,6
9 VUORENMAA TIMO ANTERO 3 894 360 0,45
10 KANNISTO PERTTI 3 634 574 0,42
OTHERS 226 426 339 26,25
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.
Savcor Communications Pty. Ltd purchased all the Valoe shares owned by
Australian EMEFCY Group Ltd (former Savcor Group Ltd) i.e. a total of
133,333,333 Valoe´s shares representing altogether approximately 15.5 % of
Valoe´s 862,472,136 shares and related voting rights.
The members of the Board of Directors and the President and CEO, either
directly or through companies under their control, held a total of 464,278,602
shares in the company on 30 June 2016, representing about 53.8 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 461,779,843 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 – June period. The average price was EUR 0.025 and the closing price at
the end of June EUR 0.011. A total of 167.7 million Valoe shares were traded at
a value of EUR 4.2 million during the January – June period. The company’s
market capitalization at the end of June stood at EUR 9.5 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.
DECISIONS AT VALOE'S ANNUAL GENERAL MEETING AND ORGANIZING OF THE BOARD OF
DIRECTORS
Valoe Corporation's Annual General Meeting was held on 24 May 2016 in Mikkeli,
Finland. The AGM approved the 2015 financial statements and discharged the
members of the Board and the President and CEO from liability for the financial
year 2015. According to the Board' proposal, it was decided that no dividend
for the financial year 2015 will be distributed. It was also decided that the
loss for the financial period that ended on 31 December 2015 will be entered in
retained earnings.
It was decided that the Board of Directors will have three members. Industrial
counsellor Hannu Savisalo, Ville Parpola and Iikka Savisalo continue as old
Board members in the Board of Directors.
At its organizing meeting following the Annual General Meeting, Valoe's Board
of Directors elected Hannu Savisalo as the Chairman and Ville Parpola as the
Vice Chairman of the Board. The Board of Directors decided, due to the scope of
the company's business, that it is not necessary to establish any separate
Board committees.
The Annual General Meeting resolved that an annual remuneration of EUR 40,000
will be paid to the Chairman and to the Vice Chairman of the Board, and EUR
30,000 to the members of the Board of Directors. Further, the Annual General
Meeting resolved that 29,500,000 option rights pursuant to Valoe’s option
scheme 2015 will be issued to Hannu Savisalo, Chairman of the Board; 19,500,000
option rights to Ville Parpola, Vice Chairman of the Board; and 10,000,000
option rights to Iikka Savisalo, Member of the Board. Further, travel costs
will be paid to the Board members pursuant to the company’s travel policy.
KPMG Oy Ab, Authorized Public Accounting Firm, continues as the company’s
auditor and Petri Kettunen, APA, as the responsible auditor.
The Annual General Meeting 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, including right to resolve on option rights and other rights
entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish
Companies Act 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 which equals to approximately 36.2 percent, at the most,
of all shares in the company including shares issued based on the authorization
and/or shares to be issued based on option rights and other special rights
entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish
Companies Act. The authorization does not exclude the Board’s right to decide
also on directed issue of shares or option rights and other special rights
pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. The
authorization may be used for important arrangements from the company’s point
of view e.g. to strengthen the capital structure, to finance investments, for
acquisitions and business transactions or other business arrangements, or to
expand ownership structure, or for incentive plans, or for other purposes
resolved by the Board involving a weighty financial reason for issuing shares
or option rights or special rights entitling to shares pursuant to the Chapter
10, Section 1 of the Finnish Companies Act. The share issue may be executed by
deviating from the shareholders' pre-emptive subscription right provided the
company has a weighty financial reason for that. The authorization is in force
until 30 June 2017.
THE MAJOR EVENTS SINCE THE END OF THE REPORTING PERIOD
2 August 2016: VALOE DISCLOSED A POSITIVE 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.”
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 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
financing limits shall not be extended 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 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 11 – 13
million in 2016 (2015: EUR 0.7 million) and the EBITDA ca. EUR 8.6 – 9.4
million (2015: EUR -2.8 million). The result for the financial year 2016 is
estimated to be ca. EUR 5.3 – 6.1 million (2015: EUR –4.7 million). All
comparison figures concern the continuing operations. The financial guidance is
subject to the Ethiopian project to be executed as planned.
In Mikkeli, 3 August 2016
Valoe Corporation
BOARD OF DIRECTORS
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 4-6/2016 4-6/2015 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing
operations
Net sales 1 077 234 2 722 360 699
Cost of sales -680 -270 -1 476 -434 -937
--------------------------------------------------------------------------------
Gross profit 397 -36 1 246 -74 -237
Other operating 7 169 120 7 169 871 150
income
Product development -371 -309 -604 -640 -1 078
expenses
Sales and marketing -207 -179 -406 -340 -686
expenses
Administrative -181 -318 -388 -557 -982
expenses
Other operating -121 -1 -471 -3 -705
expenses
Operating profit 6 687 -723 6 546 -743 -3 540
Financial income 1 -10 6 111 306
Financial expenses -550 -250 -1 057 -525 -1 497
Profit before taxes 6 138 -983 5 495 -1 157 -4 731
from continuing
operations
Income taxes 18 0 18 1 0
Profit/loss for the 6 156 -983 5 513 -1 157 -4 731
period from
continuing
operations
Discontinued
operations
Profit/loss after -146 -142 -175 -123 -91
tax for the period
from discontinued
operations
Profit/loss for the 6 010 -1 125 5 339 -1 279 -4 822
period
--------------------------------------------------------------------------------
Profit/loss
attributable to:
Shareholders of the 6 010 -1 125 5 339 -1 279 -4 822
parent company
Earnings/share 0,004 -0,001 0,004 -0,001 -0,006
(diluted), eur
Earnings/share 0,007 -0,001 0,006 -0,001 -0,006
(basic), eur
Continuing
operations:
Earnings/share 0,004 -0,001 0,004 -0,001 -0,005
(diluted), eur
Earnings/share 0,007 -0,001 0,006 -0,001 -0,005
(basic), eur
Profit/loss for the 6 010 -1 125 5 339 -1 279 -4 822
period
Other comprehensive
income
Translation 583 129 750 -334 -468
difference
Net other comprehensive income to be
reclas-
sified to profit or 0 129 0 -334 -468
loss in subsequent
periods
Total comprehensive 6 593 -996 6 088 -1 614 -5 290
income for the
period
--------------------------------------------------------------------------------
Total comprehensive
income attributable
to:
Shareholders of the 6 593 -996 6 088 -1 614 -5 290
parent company
Consolidated statement of financial position
(unaudited)
1 000 EUR 30.6.2016 30.6.2015 31.12.2015
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 16 55 64
Consolidated goodwill 441 441 441
Other intangible assets 8 506 3 796 3 737
Available-for-sale investment 9 9 9
Deferred tax assets 0 0 0
Total non-current assets 9 249 4 301 4 251
--------------------------------------------------------------------------------
Current assets
Inventories 244 106 254
Trade and other non-interest-bearing 2 309 1 751 799
receivables
Cash and cash equivalents 4 222 31
Total current assets 2 557 2 080 1 084
--------------------------------------------------------------------------------
Assets classified as held for sale 0 73 0
Total assets 11 805 6 454 5 336
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to shareholders of the
parent company
Share capital 80 80 80
Other reserves 0 806 0
Translation difference 0 -616 -750
Retained earnings -6 571 -11 494 -11 910
-6 491 -11 225 -12 579
--------------------------------------------------------------------------------
Non-controlling interests 0 9 9
Total equity -6 491 -11 216 -12 570
--------------------------------------------------------------------------------
Non-current liabilities
Non-current loans 8 508 2 243 7 222
Other non-current liabilities 489 0 0
Deferred tax liabilities 0 -1 0
Total non-current liabilities 8 996 2 242 7 222
--------------------------------------------------------------------------------
Current liabilities
Current interest-bearing liabilities 4 520 7 072 3 131
Trande and other payables 4 124 7 618 7 030
Current provisions 0 0 0
Total current liabilities 8 644 14 690 10 162
--------------------------------------------------------------------------------
Liabilities directly associated with assets 656 738 522
classified as held for sale
Total liabilities 18 297 17 670 17 906
--------------------------------------------------------------------------------
Equity and liabilities total 11 805 6 454 5 336
--------------------------------------------------------------------------------
Consolidated statement of cash flows
(unaudited)
1 000 EUR 1-6/20 1-6/20 1-12/2
16 15 015
--------------------------------------------------------------------------------
Cash flow from operating activities
Income statement profit/loss from continuing 5 495 -1 157 -4 731
operations before taxes
Income statement profit/loss from discontinued -175 -123 -91
operations before taxes
Income statement profit/loss before taxes 5 320 -1 280 -4 822
-----------------------
Non-monetary items adjusted on income statement
--------------------------------------------------------------------------------
Depreciation and + 442 443 696
impairment
Gains/losses on disposals +/- -7 074 0 0
of non-current assets
Unrealized exchange rate +/- -10 -118 -311
gains (-) and losses (+)
Other non-cash +/- 396 -746 684
transactions
Change in provisions +/- -14 -58 -86
Financial income and + 1 061 533 1 502
expense
Total cash flow before change in working capital 120 -1 226 -2 337
--------------------------------------------------------------------------------
Change in working capital
Increase (-) / decrease 10 -11 -159
(+) in inventories
Increase (-) / decrease -2 093 970 1 076
(+) in trade and other
receivables
Increase (+) / decrease 1 057 -623 -1 358
(-) in trade and other
payables
Change in working capital -1 027 336 -441
--------------------------------------------------------------------------------
Adjustment of financial items and taxes to cash-based
accounting
Interest paid - 57 84 294
Interest received + 0 1 1
Other financial items - 14 29 68
Taxes paid - -18 0 3
Financial items and taxes -53 -112 -364
--------------------------------------------------------------------------------
NET CASH FLOW FROM BUSINESS OPERATIONS -959 -1 002 -3 142
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible and intangible assets - 281 203 396
Proceeds on disposal of tangible and intangible + 0 34 34
assets
Loans granted - 0 160 160
Repayment of loan receivables + 0 263 263
Disposal of + -23 640 640
subsidiaries and other
business units
----------------------------
NET CASH FLOW FROM INVESTMENTS -976 574 381
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from non-current borrowings + 820 121 3 381
Repayment of non-current borrowings - 0 8 8
Proceeds from current borrowings + 1 368 822 265
Repayment of current borrowings - 280 454 1 004
NET CASH FLOW FROM FINANCING ACTIVITIES 1 908 481 2 634
--------------------------------------------------------------------------------
INCREASE (+) OR DECREASE (-) IN CASH FLOW -26 53 -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 - - - - 5 338 5 338 0 5 338
s for the
period
Translatio - - 750 - 0 750 -9 741
n
differenc
e,
comprehen
sive
income
30.6.2016 80 0 0 0 -6 571 -6 491 0 -6 491
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 - - - - -1 279 -1 279 0 -1 279
s for the
period
Translatio - - -334 - 0 -334 1 -334
n
differenc
e,
comprehen
sive
income
Transactio
ns with
owners:
Own equity 286 0 286 0 286
component
of the
convertib
le bond
Reduction -3 345 -4 908 0 -44 032 52 285 0 0
of share
capital
30.6.2015 80 0 -616 806 -11 494 -11 226 9 -11 216
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 4-6/2016 4-6/2015 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Net sales
Valoe 1 077 234 2 722 360 699
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 -74 0 58 113
ued
operatio
ns
Total 1 077 160 2 722 418 812
Operating
profit
Valoe 6 687 -723 6 546 -743 -3 540
Clean
Energy
-
continui
ng
operatio
ns
Discontin -146 -142 -175 -123 -91
ued
operatio
ns
Total 6 540 -865 6 371 -865 -3 631
EBITDA
Valoe 6 954 -504 6 988 -300 -2 844
Clean
Energy
-
continui
ng
operatio
ns
Discontin -146 -142 -175 -123 -91
ued
operatio
ns
Total 6 808 -646 6 813 -422 -2 935
Depreciation
Valoe 268 219 442 443 696
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 0 0 0 0
ued
operatio
ns
Total 268 219 442 443 696
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 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Revenue 0 58 113
Expenses -175 -181 -204
Operating -175 -123 -91
profit/loss from
discontinued
operation
--------------------------------------------------------------
Gain on - - -
discontinued
operations
Assets
Property, plant 0 0 0
and equipment
Other intangible 0 0 0
assets
Inventories 0 0 0
Trade and other 0 73 0
non-interest-bea
ring receivables
Cash and cash 0 0 0
equivalents
Assets classified 0 73 0
as held for sale
--------------------------------------------------------------
Liabilities
Trande and other 612 651 463
payables
Provisions 44 86 59
Liabilities 656 738 522
directly
associated with
assets
classified as
held for sale
--------------------------------------------------------------
Net assets -656 -665 -522
directly
associated with
disposal group
--------------------------------------------------------------
Cumulative
translation
difference
Net cash flow of
Cencorp's
electronics
automation
business:
1 000 EUR 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Operating -41 -364 -536
Investing 0 102 96
Earnings/share -0,0002 -0,0001 -0,0001
(basic), from
discontinued
operations
Earnings/share -0,0002 -0,0001 -0,0001
(diluted) from
discontinued
operations
Key figures
(unaudited)
1 000 EUR 4-6/201 4-6/2015 1-6/201 1-6/2015 1-12/201
6 6 5
--------------------------------------------------------------------------------
Net sales 1 077 234 2 722 360 699
Operating profit 6 687 -723 6 546 -743 -3 540
% of net sales 620,8 % -308,9 % 240,5 % -206,4 % -506,4 %
EBITDA 6 954 -504 6 988 -300 -2 844
% of net sales 645,7 % -215,4 % 256,8 % -83,2 % -406,8 %
Profit before taxes 6 138 -983 5 495 -1 157 -4 731
% of net sales 569,8 % -420,1 % 201,9 % -321,6 % -676,8 %
Balance Sheet value 11 805 6 454 11 805 6 454 5 336
Equity ratio, % -55,1 % -174,6 % -55,1 % -174,6 % -235,7 %
Net gearing, % neg. neg. neg. neg. neg.
Gross investments (continuing 151 151 283 192 395
operations)
% of net sales 14,0 % 64,5 % 10,4 % 53,3 % 56,5 %
Research and development costs 371 309 604 640 1 078
(continuing oper.)
% of net sales 34,4 % 132,3 % 22,2 % 177,8 % 154,2 %
Order book 13 530 87 13 530 87 45,58
Personnel on average 21 23 21 24 22
Personnel at the end of the 22 22 22 22 20
period
Non-interest-bearing liabilities 5 225 8 269 5 225 8 269 7 493
Interest-bearing liabilities 13 028 9 315 13 028 9 315 10 354
Share key indicators
Earnings/share (basic) 0,004 -0,001 0,004 -0,001 -0,006
Earnings/share (diluted) 0,007 -0,001 0,006 -0,001 -0,006
Earnings/share (basic), from 0,004 -0,001 0,004 -0,001 -0,005
continuing operations
Earnings/share (diluted) from 0,007 -0,001 0,006 -0,001 -0,005
continuing operations
Equity/share -0,008 -0,013 -0,008 -0,013 -0,015
P/E ratio 1,58 -11,50 1,78 -10,11 -3,40
Highest price 0,029 0,020 0,049 0,020 0,020
Lowest price 0,009 0,008 0,009 0,007 0,007
Average price 0,016 0,013 0,025 0,011 0,013
Closing price 0,011 0,015 0,011 0,015 0,019
Market capitalisation, at the 9,5 12,9 9,5 12,9 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 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing
operations
Sales of goods and
services
Savcor companies - 19 43 92
financial
management and
production
services
Cencorp Automation -2 0 0
Oy - financial
management
services
Savcor Face Ltd - 0 36 36
solar modules /
production
services
Others 1 0 0
Total 17 79 128
Purchases of goods
and services
Savcor companies - 66 110 227
financial
management, legal
and IT services
Savcor Face Ltd - 16 16 51
marketing services
SCI-Finance Oy - 45 46 98
marketing and
administration
services
Savcor Technologies 20 0 0
Oy - marketing and
administration
services
Oy Marville Ab - 35 0 30
legal services
Others - 0 1 0
administration
service
Total 182 174 405
Gain on disposal
Savcor Tempo Oy -300 0 0
Interest income
Savcor companies 0 1 1
Interest expenses
and other
financial expenses
Savcor companies 76 73 162
SCI Invest Oy 34 30 57
SCI-Finance Oy - 35 0 4
funding
Savcor Technologies 22 0 5
Oy
Savcor 27 0 0
Communications Pty
Ltd
Savcor Tempo Oy 5 0 0
Others 35 6 49
Total 234 109 277
Discontinued
operations
Purchases of goods
and services
Savcor companies - 0 0 7
financial
management, legal
and IT services
SCI-Finance Oy - 3 0 9
administration
services
Others 2 0 1
Total 6 0 18
1 000 EUR 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Non-current 2 020 187 1 882
convertible
subordinated loan
from related
parties
Non-current 173 0 0
interest payable
to related parties
Current convertible 364 1 110 364
subordinated loan
from related
parties
Other current 2 262 1 375 705
liabilities to
related parties
Current interest 438 322 156
payable to related
parties
Trade payables and 359 545 197
other
non-interest-beari
ng liabilities to
related parties
Trade and other 17 63 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 1-6/2016 1-6/2015 1-12/2015
--------------------------------------------------------------------------------
Wages and
remuneration
Salaries of the 364 382 856
management and
Board
The presentation of the salaries of the management and Board has been changed
from receipts basis to accrual basis, also for the comparison period Q2 2015.
Fair values
(unaudited)
Carrying Fair value
amount
1 000 EUR 30.6.2016 30.6.2016
--------------------------------------------------------------------------------
Financial assets
Available-for-sale investments 9 9
Trade and other receivables 2 309 2 309
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 2 781 2 781
Non-current convertible subordinated loan 5 726 5 726
Loans from financial institutions, current 1 598 1 598
Current convertible subordinated loan 364 364
Other liabilities, current 2 558 2 558
Trade payables and other non-interest-bearing 2 545 2 545
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 2.6 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 to Danske Bank was overdue.
Change in intangible and tangible assets
(unaudited)
1 000 EUR 30.6.2016 30.6.2015 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 -442 -443 -696
Additions 283 192 395
Realization of an internal margin 4 931 0 0
Disposals -47 -34 -34
Exchange rate difference -4 0 0
Carrying amount, end of period 8 963 4 292 4 242
Commitments and contingent liabilities
(unaudited)
1 000 EUR 30.6.2016 30.6.2015 31.12.2015
-------------------------------------------------------------------------------
Loans from financial institutions 949 950 950
Promissory notes secured by pledge 12 691 12 691 12 691
Factoring loan and export credit limit 349 872 448
Trade receivables 0 41 0
Deposits 0 14 0
Promissory notes secured by pledge 12 691 12 691 12 691
Collaterals given from other short-term loans
Deposits 0 518 509
Commitments - continuing operations
Payable within one year 61 83 61
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