2016-05-19 15:15:01 CEST
2016-05-19 15:15:01 CEST
REGULATED INFORMATION
Valoe Oyj - Interim report (Q1 and Q3)
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 31 MARCH 2016
Valoe Corporation Interim Report
19 May 2016 at 16.15 Finnish time
VALOE CORPORATION, INTERIM REPORT 1 JANUARY 2016 – 31 MARCH 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 solutions, was completed during
2015. Now Valoe is a technology startup which, however, already has new,
competitive and tested technology in use; operating automated production plant;
worldwide market; as well as experienced personnel with competence in
international technology sales, production and projects.
- During the reporting period, in February 2016 Valoe received a ca. EUR 15.8
million order for a solar module manufacturing plant and back contact
technology. The plant will be delivered during the year 2016. 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 financing for the order.
- The net sales of the continuing operations of Valoe Group for the reporting
period January – March 2016 were EUR 1.6 million (EUR 0.1 million in 2015). The
operating profit of continuing operations was EUR -0.1 million (EUR -0.02
million), profit for the period was EUR -0.6 million (EUR -0.2 million),
earnings per share were EUR -0.0007 (-0.0002) and EBITDA was EUR 0.03 million
(EUR 0.2 million).
- After the end of the reporting period Valoe sold the Chinese companies owned
by Valoe and related debts and liabilities to Savcor Tempo Oy, a Savisalo
family related company. Valoe estimates that the arrangement improves its
consolidated result by ca. EUR 7 million. Valoe will report the final result of
the arrangement in its Interim Report for the second quarter that will be
released on 3 August 2016. The Beijing factory was already closed and Valoe
Group had no longer during the reporting period any future expectations
relating to the factory in its balance sheet. At the end of the reporting
period the group balance sheet included all of the debts of the Beijing
subsidiary. The net debts totaled ca. EUR 3.7 million.
- Valoe estimates that the net sales of Valoe Group will be ca. EUR 11 – 13
million in 2016 and the EBITDA ca. EUR 1.5 – 2.0 million. The financial year
2016 is estimated to be profitable. The market outlook is subject to the
Ethiopian project to be finished as planned.
- Valoe’s financial situation continues to be tight. However, Valoe’s
management views that the fully funded order for a module manufacturing plant
and a technology package from Ethiopia turns Valoe’s financial situation stable
provided the company succeeds to arrange advance payment guarantee and
financing for building period that are typical of export business. Valoe has to
arrange advance payment guarantee that is typical of export business and
financing of ca. EUR 2.0 – 4.0 million for building period from its suppliers
and financers. After the reporting period Valoe has received loan commitments
of ca. EUR 1.3 million.
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 DEVELOPMENT
Valoe transferred its electronics automation business to Cencorp Automation Oy
and sold at first 70 percent and in December 2014 the remaining 30 percent of
this company to FTTK, after which Valoe has reported of only one business
segment. The profit of EUR 0.276 million from the transaction between Valoe and
FTTK was entered in the books in 2014. The figures of Cencorp Automation Oy
have no longer been consolidated in Valoe’s financial reports in 2015.
The figures in brackets are comparison figures for the corresponding period in
2015, unless stated otherwise.
January – March 2016 (continuing operations)
- Valoe Group’s net sales increased more than tenfold to EUR 1.6 million (In
2015: EUR 0.1 million).
- EBITDA was EUR 0.03 million (EUR 0.2 million).
- Operating profit was EUR -0.1 million (EUR -0.02 million).
- The profit before taxes was EUR -0.6 million (EUR -0.2 million).
- Profit for the period was EUR -0.6 million (EUR -0.2 million).
- Earnings per share were EUR -0.0007 (EUR -0.0002) and diluted earnings per
share EUR -0.0007 (EUR -0.0002).
The operating profit of the first quarter of the corresponding year 2015 was
increased by a one-off cost of EUR 0.7 million that related to the Beijing
factory and was invoiced from Savcor Group Ltd. The cost was due to the Share
and Asset Sale Agreement signed between Valoe and Savcor Group Ltd, an
Australian based company, in 2009. The receivable was written off in the
Financial Statements for 2015.
MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW
During the first quarter of the financial year 2016 Valoe was finally able to
start implementing its strategy as the module manufacturing plant and
technology transfer project to Ethiopia was commenced. The objective of the
demanding project is to deliver an advanced solar module manufacturing plant to
the customer, Valoe’s first manufacturing partner, and provide the customer
with technological knowhow required to run the plant successfully.
Valoe is well prepared for the project. The company’s project team has a lot of
experience of challenging projects and international business operations. New
resources have been hired to the project team and more high profile
professionals will be recruited as required. The company’s management trusts
the project organization is able to deliver a high quality product to the
customer within the agreed timetable.
Although Valoe’s customer has financed the whole order with funding granted by
the Ethiopian Development Bank, Valoe has to arrange financing for the building
period. Valoe succeeded in collecting the first phase financing, ca. EUR 1.3
million, and the project was started. Negotiations for funding took longer time
than expected but Valoe believes that the project proceeds within the schedule
agreed with the customer.
As Valoe has now the first manufacturing partner in its ecosystem it has to
increase the number of resources developing technologies for the manufacturing
partners. Valoe is prepared to provide its partners with various components
including Conductive Back Sheet, developed by Valoe, besides production lines.
Securing sufficient and competitive production capacity for Conductive Back
Sheets is now one of the company’s most important short-term investment
objectives.
Valoe’s turnover started to increase during first quarter of 2016 as the
Ethiopian project was launched and the demand for solar electricity started to
grow in Finland. The company’s management views that the demand continues to
grow in Finland in the spring and the summer 2016.
Valoe trusts that the consumers value Valoe’s solar power plants that have high
capacity, long lifespan and attractive aesthetics and produce clean energy for
decades as well as increase the value of properties owned by Valoe’s customers.
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
several distribution agreements around Finland and trained retailers to become
professionals in the field of solar electricity. The new sales channel is
already operating with good results. Its efficiency is based on close
cooperation between Valoe and private companies that are enthusiastic about
solar power systems sales and already have good reputation for selling similar
products and services.
The demand for solar energy gives Valoe an opportunity to test sales and
delivery models for modules and solar power plant technologies, at home.
However, the production of Valoe’s plant in Mikkeli is not essential for the
company’s growth regardless of the company’s success in Finland. The most
substantial growth will be achieved if Valoe succeeds in selling several module
manufacturing plants and related technology packages like the one sold in
Ethiopia. According to Valoe’s strategy buyers of module manufacturing plants,
who are Valoe’s manufacturing partners, start using Valoe’s components. Valoe’s
customers and manufacturing partners form an ecosystem of companies,
specializing in standardized and modern back contact modules, whose
technological development and production cost efficiency Valoe will look after.
Additionally Valoe will take care of the whole ecosystem’s technological and
economic competitiveness by updating its partners’ 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.
The ebitda of the financial year’s first quarter was positive for the first
time since Valoe’s Clean Energy strategy was introduced. This proves Valoe has
made investments in the right direction. However, the long-term profitability
depends on the Ethiopian project delivery as well as on the company’s ability
to sign new manufacturing partnership agreements. During the reporting period
Valoe continued its negotiations with several new candidates for a
manufacturing partner around the world as has been announced previously.
Despite the growth and improved profitability the company’s financial situation
has been very tight during 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, which is estimated to take place at the end of the
second quarter or at the latest when the Ethiopian production line delivery has
passed the tests in Finland and is ready for shipping.
Valoe’s research and development continues working with development projects
announced previously. The objective is to continuously improve the
competitiveness of the ecosystem using back contact technology. In 2015 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. Tekes, the Finnish Funding Agency for Innovation, granted
Valoe a significant development loan of EUR 4 million, which secured financing
for the project.
During the first half of the year 2016 major part of the company’s development
resources will be targeted to the Ethiopian project.
In the long-term, Valoe will include in its offering technologies relating to
energy storages and fuel cells according to the company’s strategy. As to the
key competences in these technologies Valoe will be supported by its technology
partners.
Valoe has moved on to the implementation phase of its strategy. In compliance
with the company’s financial guidance Valoe believes it will grow fast and
profitably, which will gradually improve the company’s financial situation.
VALOE’S STRATEGY
Valoe’s net sales will be generated by the following four 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
Valoe’s PV modules 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 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. The value of the contracts Valoe is negotiating for varies
from approximately 2 million Euros to approximately 60 million Euros.
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. Valoe provides its partners with technical support and is neither
aiming to have a major shareholding in its partnership companies nor it pursues
to take responsibility for its partners’ sales or other 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
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 components, components
relating to energy storages and special back contact based cell technologies.
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. Modern next generation conductive back sheet based solar modules can be
manufactured with Valoe’s own module manufacturing recipe and automated
production.
On the 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 still during 2015. Many solar module manufacturers with solid
market position have 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
has 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 – March 2016
was EUR -0.6 million (EUR -0.7 million). Trade receivables at the end of the
reporting period were EUR 9.6 million (EUR 0.8 million). Net financial items
amounted to EUR 0.5 million (EUR 0.2 million).
At the end of March the equity ratio of Valoe Group was -88.4 percent (-148.7
%) and equity per share was EUR -0.015 (EUR -0.012). The equity ratio including
capital loans was -48.6 percent (-102.5 %). At the end of the reporting period,
the Group’s liquid assets totaled EUR 0.002 million (EUR 0.2 million) and
unused export credit limits and bank guarantee limits amounted to EUR 0.0
million (EUR 0.0 million).
The sale of Valoe’s Chinese subsidiaries taken place after the end of the
reporting period is estimated to increase Valoe Group’s result by ca. EUR 7
million and thus changing Valoe Group’s equity ratio remarkably. Valoe will
report the final result of the sale of the subsidiaries in its Interim Report
for the second quarter of 2016 that will be released on 3 August 2016.
The financing situation of Valoe has improved remarkably due to the successful
Convertible Bond I/2015 during the autumn 2015. However, the financing
situation continues to be tight but according to the company’s management the
EUR 15.8 million order received in February 2016, out of which EUR 9.5 million
will be paid in cash, turns the company’s financing situation clearly more
stable. However, this is subject to the company being able to arrange financing
for building period and advance payment guarantee that are typical of export
business and the order being delivered as agreed.
Valoe and the Finnish Funding Agency for Innovation, Tekes agreed on new
funding for Valoe 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 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.
As the company has previously informed many negotiations for deliveries of
production technology have made progress. 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.
Valoe has agreed on extending the loan periods of Savcor Group’s convertible
bond of ca. EUR 0.364 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 0.95 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 0.45 million that was due on 31 March 2016. The
company will disclose a separate release after the negotiations have been
closed.
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 and the targets set for the research
and development have been exceeded. Also in the future, commercial success will
highly depend on how well the research and development will succeed. 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. If Valoe succeeds in its research and development the company may
obtain 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 – March period
amounted to EUR 0.2 million (EUR 0.3 million) or 14.2 (127.9) percent of net
sales. The research and development costs of the Group’s continuing operations
during the January – March period totaled EUR 0.2 million (EUR 0.3 million) or
14.2 (262.3) percent of net sales.
INVESTMENTS
Gross investments in the continuing operations during January - March period
amounted to EUR 0.1 million (EUR 0.04 million). The investments on the
reporting period as well as on the corresponding period were mainly in
development costs.
PERSONNEL
At the end of March the Group employed 21 (26) people, out of which 20 persons
worked in Finland and 1 person in the USA. During the reporting period the
Group’s salaries and fees totaled EUR 0.3 million (EUR 0.4 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 6,661 shareholders at the end of March 2016, and
20.3 percent of the shares were owned by foreigners. The ten largest
shareholders held 79.0 percent of the company’s shares and voting rights on 31
March 2016.
The largest shareholders on 31 March 2016
shares percent
1 SAVCOR GROUP OY 324 511 387 37,63
2 SAVCOR GROUP LIMITED 133 333 333 15,46
3 GASELLI CAPITAL OY 95 000 000 11,01
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 5 077 942 0,59
9 VUORENMAA TIMO ANTERO 3 894 360 0,45
10 SAARELAINEN MIKA 2 800 000 0,32
OTHERS 181 312 965 21,02
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. After the end of the reporting
period Savcor Communications Pty. Ltd purchased all the Valoe shares owned by
Australian EMEFCY Group Ltd (former Savcor Group Ltd). Savcor Communications
Pty.Ltd acquired 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 373,255,785
shares in the company on 31 March 2016, representing about 43.3 percent of the
company’s shares and voting rights. Iikka Savisalo, Valoe’s Managing Director,
either directly or through companies under his control, held a total of
370,757,026 shares in the company and 5,194,481 options connected to bond
I/2012.
The price of Valoe’s share varied between EUR 0.019 and 0.049 during the
January – March period. The average price was EUR 0.034 and the closing price
at the end of March EUR 0.029. A total of 84.9 million Valoe shares were traded
at a value of EUR 2.9 million during the January – March period. The company’s
market capitalization at the end of March stood at EUR 25.0 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. The Board of Directors shall annually decide upon the distribution of the
stock options to the key employees of the Group. During the reporting period
71,000,000 options were distributed to the key employees. 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.
SHARE ISSUE AUTHORIZATIONS IN FORCE
There is no share issue authorizations in force as the Convertible Bond I/2015
has been fully subscribed and the company has resolved on the stock option
scheme during 2015.
THE MAJOR EVENTS SINCE THE END OF THE REPORTING PERIOD
5 APRIL 2016: DISCLOSURE UNDER CHAPTER 9, SECTION 10 OF THE SECURITIES MARKET
ACT
Valoe Corporation has received an announcement from Savcor Communications
Pty.Ltd on 5 April 2016 according to which its shareholding in Valoe shares has
exceeded the threshold of over 15 % of all the shares in Valoe as a result of a
share transactions concluded on 5 April 2016 whereby Savcor Communications
Pty.Ltd purchased all the Valoe shares owned by Australian EMEFCY Group Ltd
(former Savcor Group Ltd). Savcor Communications Pty.Ltd acquired on the deal 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.
5 APRIL 2016: VALOE HAS RECEIVED AN ANNOUCEMENT OF A TRANSFER OF RECEIVABLES
FROM SAVCOR COMMUNICATIONS
Savcor Communications Pty. Ltd has notified Valoe that it has agreed with
EMEFCY Group Ltd (former Savcor Group Ltd.), an Australian company, on a
transfer of receivables. A loan of ca. EUR 0.8 million with interests granted
by EMEFCY Group (former Savcor Group Ltd) to Valoe has been transferred to
Savcor Communications on 5 April 2016. The loan between Valoe and Savcor
Communications shall fall due on 31 December 2016 unless the parties agree
otherwise. The interest rate of the loan is 10.75%. There is no guarantee
provided for the loan.
18 APRIL 2016: VALOE HAS RECEIVED A NOTIFICATION OF AN AWARD OF THE ARBITRAL
TRIBUNAL IN THE CASE CONCERNING THE SHARES IN CENCORP AUTOMATION
In its award of today the arbitral tribunal has confirmed that the 30 percent
ownership in Cencorp Automation Oy has been transferred from Valoe to FTTK
Company Limited on 21 January 2015.
29 APRIL 2016: VALOE HAS RECEIVED LOAN COMMITMENTS OF EUR 1.3 MILLION. VALOE
MAKES A WRITE-DOWN IN THE MOTHER COMPANY’S FINANCIAL STATEMENTS FOR 2015 AND
UPDATES THE SITUATION OF ITS FINANCING NEGOTIATIONS
Valoe has resolved to write down a revenue of EUR 0.7 million recognized on the
first quarter of 2015 based on a claim against Australian Savcor Group Ltd
Creditors Trust (former Savcor Group Ltd), in the financial statements for
2015. The claim was based on the share and asset sale agreement, signed in
2009, regarding the factories in China between Savcor Group Ltd and Cencorp
Corporation (now Valoe Corporation). Valoe claimed Savcor Group Ltd Creditors
Trust to pay taxes provided for in China that were recognized during Savcor
Group Ltd’s ownership. According to the information Valoe has received it has
become clear that Savcor Group Ltd Creditors Trust which is under Australian
liquidation process does, in Valoe’s opinion, no longer have enough assets or
income to pay the compensation even if the claim would be successful. In the
last quarter of 2015 Valoe recognized a tax cost of EUR 0.7 million related to
the above mentioned claim. This one-off cost related to the Beijing factory was
based on afterwards changed taxation of equipment imported in 2008.
Since the end of the financial year the company’s financing situation has
declined. Valoe has to arrange an advance payment guarantee that is typical of
export business and financing of ca. EUR 2.0 – 4.0 million for building period
for the Ethiopian order from its suppliers and financers. By the disclosure of
this release Valoe has received loan commitments of ca. EUR 1.3 million for
building period financing for the EUR 15.8 million order from Ethiopia from the
company’s shareholders and promissory note holders. Valoe views that this
financing will enable the company to continue with the delivery with maximum
effort and provides time to arrange additional funding and guarantees.
Negotiations for additional funding and advance payment guarantee are ongoing
but not yet finished.
On 5 April 2016 Valoe announced that Savcor Communications Pty Ltd has notified
Valoe that it has agreed with EMEFCY Group Ltd (former Savcor Group Ltd.), an
Australian company, that Valoe’s loan of ca. EUR 0.8 million with interests has
been transferred from the Australian company, former Savcor Group Ltd to Savcor
Communications on 5 April 2016.The loan shall fall due on 31 December 2016
unless the parties agree otherwise. The interest rate of the loan is 10.75%.
There is no guarantee provided for the loan. Valoe has started negotiations
with Savcor Communications Pty Ltd for new loan terms. Valoe’s object is to
agree with Savcor Communications Pty Ltd on converting the loan to a
subordinated loan.
29 APRIL 2016: THE AUDITORS’S REPORT OF VALOE
Valoe’s auditor has today given his report for the company’s Financial
Statements for 2015.
AUDITOR’S REPORT
To the Annual General Meeting of Valoe Oyj
We were engaged to audit the accounting records, the financial statements, the
report of the Board of Directors, and the administration of Valoe Oyj for the
year ended 31 December, 2015. The financial statements comprise the
consolidated statement of financial position, income statement, statement of
comprehensive income, statement of changes in equity and statement of cash
flows, and notes to the consolidated financial statements, as well as the
parent company’s balance sheet, income statement, cash flow statement and notes
to the financial statements.
Responsibility of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the
preparation of consolidated financial statements that give a true and fair view
in accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU, as well as for the preparation of financial statements and
the report of the Board of Directors that give a true and fair view in
accordance with the laws and regulations governing the preparation of the
financial statements and the report of the Board of Directors in Finland. The
Board of Directors is responsible for the appropriate arrangement of the
control of the company’s accounts and finances, and the Managing Director shall
see to it that the accounts of the company are in compliance with the law and
that its financial affairs have been arranged in a reliable manner.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements, on the
consolidated financial statements and on the report of the Board of Directors
based on our audit. The Auditing Act requires that we comply with the
requirements of professional ethics. We conducted our audit in accordance with
good auditing practice in Finland. Good auditing practice requires that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and the report of the Board of Directors are free from
material misstatement, and whether the members of the Board of Directors of the
parent company or the Managing Director are guilty of an act or negligence
which may result in liability in damages towards the company or have violated
the Limited Liability Companies Act or the articles of association of the
company.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements and the report of the Board
of Directors. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement, whether due to
fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of financial statements
and report of the Board of Directors that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial
statements and the report of the Board of Directors.
Because of the significance of the matter described in the “Basis for
Disclaimer of Opinion on the consolidated financial statements and consolidated
financial statements information included in the report of the Board of
Directors” section of our report, we have not been able to obtain sufficient
appropriate audit evidence to provide a basis for an audit opinion on the
consolidated financial statements.
Opinion on the company’s financial statements and the company´s financial
statements information included in the report of the Board of Directors
In our opinion, the financial statements of Valoe Oyj (parent company) and the
parent company´s financial statements information included in the report of the
Board of Directors, give a true and fair view of the parent company’s financial
performance and financial position in accordance with the laws and regulations
governing the preparation of the financial statements and the report of the
Board of Directors in Finland. The parent company information in the report of
the Board of Directors is consistent with the information in the financial
statements.
Basis for Disclaimer of Opinion on the consolidated financial statements and
consolidated financial statements information included in the report of the
Board of Directors
The section “Financial development” in the report of the Board of Directors
describes both the situation and potential impacts of the Beijing subsidiary to
the consolidated financial position of Valoe. No accounting records have been
kept for the Beijing subsidiary for financial year 2015 for reasons described
in the report by Board of Directors. As a result, we were not able to verify
the correctness of receivables, bank account or debt of the Beijing subsidiary.
Disclaimer of Opinion
Due to the significance of the matter described in the Basis for Disclaimer of
Opinion, we have not been able to obtain sufficient audit evidence to provide a
basis for an audit opinion. Accordingly, we do not express opinion on the
consolidated financial statements or consolidated financial statements
information included in the report of the Board of Directors.
Auditor´s remark
The interim report 1.1.-30.6.2015 prepared by the board of directors includes a
revenue of EUR 0.7 million recognized based on a claim raised by Valoe.
Further, the section “Financial development” in the report of the Board of
Directors describes the accounting treatment of both the claim and the related
costs as basis for the claim during financial year 2015.
In our opinion, the recognized revenue of EUR 0.7 million based on a claim is
not in accordance with IFRS. As described in the report of the Board of
Directors, the tax cost of EUR 0.7 million was recognized in the Beijing
subsidiary in the last quarter of 2015. Taking into consideration the above
mentioned, the cost of EUR 0.7 million should have been included in the interim
report 1.1.-30.6.2015.
We refer to the Securities Market Act, Chapter 7 section 8 subsection 2 and
make a remark that interim report for the period 1.1.-30.6.2015 has not been
prepared in accordance with the laws and regulations governing the preparation
of the Interim report.
Emphasis of matter
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.
29 APRIL 2016: VALOE’S ANNUAL REPORT AND CORPORATE GOVERNANCE STATEMENT HAS
BEEN DISCLOSED
Valoe Corporation's Annual Report 2015 has been published. The Annual Report is
available in Finnish and in English on the company’s website at www.valoe.com.
The Annual Report includes the Report of the Board of Directors, the Financial
Statements, the Auditor's Report and the Corporate Governance Statement.
2 MAY 2016: NOTICE TO THE GENERAL MEETING OF VALOE CORPORATION
Notice is given to the shareholders of Valoe Corporation to the Annual General
Meeting to be held on 24 May 2016 at 11:00 (Finnish time) at the company’s
headquarters at Insinöörinkatu 5, 50100 Mikkeli, Finland. The reception of
persons who have registered for the meeting and the distribution of voting
tickets will commence at 10:30 (Finnish time).
A. Matters on the agenda of the General Meeting
At the General Meeting, the following matters will be considered:
1. Opening of the meeting
2. Calling the meeting to order
3. Election of persons to scrutinize the minutes and to
supervise the counting of votes
4. Recording the legality of the meeting
5. Recording the attendance at the meeting and adoption
of the list of votes
6. Presentation of financial statements, group
financial statements, the report of the Board of Directors and the auditor’s
report for the year 2015 and the review by the CEO
7. Adoption of the financial statements and group
financial statements
8. Resolution on the use of the profit shown on the
balance sheet and the payment of dividend
The Board of Directors proposes to the General Meeting that the loss for the
financial year ended on 31 December 2015 is entered in retained earnings and
that no dividend will be distributed.
9. Resolution on the discharge of the members of the
Board of Directors and the CEO from liability
10. Resolution on the number of members of the Board of
Directors
11. Resolution on the remuneration and principles for
travelling cost payments of the members of the Board of Directors
12. Election of members of the Board of Directors
13. Resolution on the remuneration of the auditor
The Board of Directors proposes to the General Meeting that the auditor is paid
auditor's fee and compensation of the costs against a reasonable invoice
accepted by Valoe Corporation.
14. Election of auditor
The Board of Directors proposes to the General Meeting that the firm of
independent accountants KPMG Oy Ab be re-elected as the company's auditor for a
period ending in the first Annual General Meeting following the Annual General
Meeting, in which it was elected. KMPG Oy Ab has informed that the principal
auditor would be Petri Rekonen, Authorised Public Accountant.
15. Authorization of the Board of Directors to decide on
a share issue as well as other option rights and other special rights entitling
to shares in the company
The Board of Directors proposes to the General Meeting, that the General
Meeting authorizes 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. It is proposed that 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. It is proposed that the authorization is in force
until 30 June 2017.
16. Closing of the meeting
10 MAY 2016: VALOE SOLD ITS CHINEASE SUBSIDIARY AND RELATED LIABILITIES TO
SAVCOR TEMPO OY
Valoe Corporation has concluded its negotiations with a Savisalo family related
company for selling Valoe’s subsidiary in Beijing, China. In the arrangement
Valoe sold 100 percent of the shares in Savcor Pacific Ltd, a Hong Kong
subsidiary of Valoe, to Savcor Tempo Oy. Savcor Pacific owns 100 percent of the
shares in the Chinese subsidiary, Savcor Face (Beijing) Co., Ltd. Both
companies as well as the debts and liabilities related to their operations were
transferred to Savcor Tempo Oy. 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. An annual interest rate of 12 percent will be paid on the
debt.
Only a guarantee on lease liability given by Valoe on behalf of the Chinese
factory was excluded from the transaction. The guarantee amounts to EUR 0.65
million at the most if realized. A provision equivalent to the guarantee was
booked in Valoe’s Financial Statements for 2014 where it has been recognized as
an additional expense and the mother company’s liability as announced earlier.
Valoe has contested the guarantee.
Valoe has written down the value of the shares of its subsidiary, Savcor
Pacific Ltd, in the Financial Statements for 2014.
Valoe estimates that the aforesaid arrangement improves its consolidated result
by ca. EUR 7 million. The aforementioned figures are at this point only
estimations. Valoe will report the final result of the arrangement in its
Interim Report for the second quarter that will be released on 3 August 2016.
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.
The Convertible Bond I/2015 enabled the company to stabilize its short-term
financing remarkably. According to the management of the company the EUR 15.8
million order for a module manufacturing plant received from Ethiopia in 2016,
out of which EUR 9.5 million will be paid in cash, turns the company’s cash
flow from operations positive if the order is realized as planned. However,
Valoe has to arrange advance payment guarantee, typical of export business, for
the order and financing of ca. EUR 2.0 – 4.0 million for building period from
its suppliers and financers. The company has received funding commitments of a
total of EUR 1.3 million by the disclosure of this Interim Report. 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 fully 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 execution of the non-binding cooperation agreement signed between Valoe and
Vikram Solar involves typical business risks. Arrangements pursuant to the
non-binding cooperation agreement are subject to several terms and conditions,
especially to Valoe’s financing.
The execution of the non-binding Memorandum of Understanding signed with a
Chinese photovoltaic module manufacturer involves significant risks. The final
terms of an agreement are still under negotiations, thus execution of the
agreement is not yet guaranteed. Additionally, the agreement is subject to
Valoe's financing.
The module manufacturing plant order from Ethiopia involves business, financial
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 1.5 – 2.0
million (2015: EUR-2.1 million). The financial year 2016 is estimated to be
profitable (2015: EUR –3.9 million). All comparison figures concern the
continuing operations.
In Mikkeli, 19 May 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
Consolidated statement of comprehensive income
(unaudited)
1 000 EUR 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing operations
Net sales 1 645 126 699
Cost of sales -796 -165 -937
--------------------------------------------------------------------------------
Gross profit 848 -39 -237
Other operating income 0 751 150
Product development expenses -233 -330 -1 078
Sales and marketing expenses -199 -161 -686
Administrative expenses -207 -239 -982
Other operating expenses -349 -2 -705
Operating profit -141 -20 -3 540
Financial income 5 121 306
Financial expenses -507 -275 -1 497
Profit before taxes from continuing -643 -175 -4 731
operations
Income taxes 0 1 0
Profit/loss for the period from -643 -174 -4 731
continuing operations
Discontinued operations
Profit/loss after tax for the period -29 20 -91
from discontinued operations
Profit/loss for the period -672 -154 -4 822
--------------------------------------------------------------------------------
Profit/loss attributable to:
Shareholders of the parent company -672 -154 -4 822
Earnings/share (diluted), eur -0,0008 -0,0002 -0,006
Earnings/share (basic), eur -0,0008 -0,0002 -0,006
Continuing operations:
Earnings/share (diluted), eur -0,0007 -0,0002 -0,005
Earnings/share (basic), eur -0,0007 -0,0002 -0,005
Profit/loss for the period -672 -154 -4 822
Other comprehensive income
Translation difference 166 -464 -468
Net other comprehensive income to be
reclassified to
profit or loss in subsequent periods 166 -464 -468
Total comprehensive income for the -505 -618 -5 290
period
--------------------------------------------------------------------------------
Total comprehensive income attributable
to:
Shareholders of the parent company -505 -618 -5 290
Consolidated statement of financial position
(unaudited)
1 000 EUR 31.3.2016 31.3.2015 31.12.2015
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 12 8 64
Consolidated goodwill 441 441 441
Other intangible assets 3 696 3 907 3 737
Available-for-sale investment 9 9 9
Deferred tax assets 0 0 0
Total non-current assets 4 159 4 365 4 251
--------------------------------------------------------------------------------
Current assets
Inventories 276 49 254
Trade and other non-interest-bearing 10 342 1 913 799
receivables
Cash and cash equivalents 22 225 31
Total current assets 10 639 2 188 1 084
--------------------------------------------------------------------------------
Assets classified as held for sale 0 564 0
Total assets 14 798 7 117 5 336
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to shareholders of the
parent company
Share capital 80 3 425 80
Other reserves 0 49 460 0
Translation difference -583 -745 -750
Retained earnings -12 581 -62 654 -11 910
-13 084 -10 515 -12 579
--------------------------------------------------------------------------------
Non-controlling interests 0 9 9
Total equity -13 084 -10 506 -12 570
--------------------------------------------------------------------------------
Non-current liabilities
Non-current loans 8 278 1 699 7 222
Other non-current liabilities 335 0 0
Deferred tax liabilities 0 -1 0
Total non-current liabilities 8 613 1 698 7 222
--------------------------------------------------------------------------------
Current liabilities
Current interest-bearing liabilities 3 116 7 405 3 131
Trande and other payables 15 602 7 454 7 030
Current provisions 0 0 0
Total current liabilities 18 718 14 860 10 162
--------------------------------------------------------------------------------
Liabilities directly associated with assets 551 1 065 522
classified as held for sale
Total liabilities 27 882 17 623 17 906
--------------------------------------------------------------------------------
Equity and liabilities total 14 798 7 117 5 336
--------------------------------------------------------------------------------
Consolidated statement of cash flows
(unaudited)
1 000 EUR 1- 1-3/20 1-12/2
3/201 15 015
6
--------------------------------------------------------------------------------
Cash flow from operating activities
Income statement profit/loss from continuing -643 -175 -4 731
operations before taxes
Income statement profit/loss from discontinued -29 20 -91
operations before taxes
Income statement profit/loss before taxes -672 -155 -4 822
-----------------------
Non-monetary items adjusted on income statement
--------------------------------------------------------------------------------
Depreciation and + 175 224 696
impairment
Gains/losses on disposals +/- 63 0 0
of non-current assets
Unrealized exchange rate +/- 8 -118 -311
gains (-) and losses (+)
Other non-cash +/- 282 -739 684
transactions
Change in provisions +/- -9 -11 -86
Financial income and + 494 273 1 502
expense
Total cash flow before change in working capital 342 -526 -2 337
--------------------------------------------------------------------------------
Change in working capital
Increase (-) / decrease -22 46 -159
(+) in inventories
Increase (-) / decrease -9 566 338 1 076
(+) in trade and other
receivables
Increase (+) / decrease 8 642 -523 -1 358
(-) in trade and other
payables
Change in working capital -945 -139 -441
--------------------------------------------------------------------------------
Adjustment of financial items and taxes to cash-based
accounting
Interest paid - 41 56 294
Interest received + 0 1 1
Other financial items - -1 28 68
Taxes paid - 0 0 3
Financial items and taxes -41 -82 -364
--------------------------------------------------------------------------------
NET CASH FLOW FROM BUSINESS OPERATIONS -644 -748 -3 142
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible and intangible assets - 150 51 396
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 -173 726 381
--------------------------------------------------------------------------------
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 + 110 106 265
Repayment of current borrowings - 126 149 1 004
NET CASH FLOW FROM FINANCING ACTIVITIES 804 71 2 634
--------------------------------------------------------------------------------
INCREASE (+) OR DECREASE (-) IN CASH FLOW -13 48 -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 - - - - -672 -672 0 -672
s for the
period
Translatio - - 166 - 0 166 -9 157
n
differenc
e,
comprehen
sive
income
31.3.2016 80 0 -583 0 -12 581 -13 084 0 -13 084
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 0 0 0 0 -154 -154 0 -154
s for the
period
Translatio 0 0 -464 0 0 -464 1 -463
n
differenc
e,
comprehen
sive
income
31.3.2015 3 425 4 908 -745 44 552 -62 654 -10 516 9 -10 506
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 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Net sales
Cencorp Clean 1 645 126 699
Energy -
continuing
operations
Discontinued 0 132 113
operations
Total 1 645 258 812
Operating profit
Cencorp Clean -141 -20 -3 540
Energy -
continuing
operations
Discontinued -29 20 -91
operations
Total -170 -1 -3 631
EBITDA
Cencorp Clean 34 204 -2 844
Energy -
continuing
operations
Discontinued -29 20 -91
operations
Total 5 224 -2 935
Depreciation
Cencorp Clean 175 224 696
Energy -
continuing
operations
Discontinued 0 0 0
operations
Total 175 224 696
Impairment
Cencorp Clean 0 0 0
Energy -
continuing
operations
Discontinued 0 0 0
operations
Total 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 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Revenue 0 132 113
Expenses -29 -113 -204
Operating -29 20 -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 0 564 0
non-interest-bea
ring receivables
Cash and cash 0 0 0
equivalents
Assets classified 0 564 0
as held for sale
--------------------------------------------------------------
Liabilities
Trande and other 502 931 463
payables
Provisions 50 134 59
Liabilities 551 1 065 522
directly
associated with
assets
classified as
held for sale
--------------------------------------------------------------
Net assets -551 -501 -522
directly
associated with
disposal group
--------------------------------------------------------------
Cumulative
translation
difference
Net cash flow of
Cencorp's
electronics
automation
business:
1 000 EUR 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Operating 1 -392 -536
Investing 0 103 96
Earnings/share -0,00003 0,00002 -0,0001
(basic), from
discontinued
operations
Earnings/share -0,00003 0,00002 -0,0001
(diluted) from
discontinued
operations
Key figures
(unaudited)
1 000 EUR 1-3/2016 1-3/2015 1-12/201
5
--------------------------------------------------------------------------------
Net sales 1 645 126 699
Operating profit -141 -20 -3 540
% of net sales -8,6 % -16,0 % -506,4 %
EBITDA 34 204 -2 844
% of net sales 2,1 % 162,1 % -406,8 %
Profit before taxes -643 -175 -4 731
% of net sales -39,1 % -138,6 % -676,8 %
Balance Sheet value 14 798 7 117 5 336
Equity ratio, % -88,4 % -148,7 % -235,7 %
Net gearing, % neg. neg. neg.
Gross investments 133 41 395
(continuing operations)
% of net sales 8,1 % 32,6 % 56,5 %
Research and development 233 330 1 078
costs (continuing oper.)
% of net sales 14,2 % 262,3 % 154,2 %
Order book 7 995 122 0,05
Personnel on average 21 26 22
Personnel at the end of the 21 26 20
period
Non-interest-bearing 16 103 8 386 7 493
liabilities
Interest-bearing liabilities 11 394 9 104 10 354
Share key indicators
Earnings/share (basic) -0,0008 -0,0002 -0,006
Earnings/share (diluted) -0,0008 -0,0002 -0,006
Earnings/share (basic), from -0,0007 -0,0002 -0,005
continuing operations
Earnings/share (diluted) -0,0007 -0,0002 -0,005
from continuing operations
Equity/share -0,015 -0,012 -0,015
P/E ratio -37,25 -44,70 -3,40
Highest price 0,049 0,010 0,020
Lowest price 0,019 0,007 0,007
Average price 0,034 0,009 0,013
Closing price 0,029 0,008 0,019
Market capitalisation, at 25,0 6,9 16,4
the 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 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Continuing
operations
Sales of goods and
services
Savcor companies - 14 17 92
financial
management and
production
services
Cencorp Automation 0 1 0
Oy - financial
management
services
Savcor Face Ltd - 0 0 36
solar modules /
production
services
Others 0 1 0
Total 14 19 128
Purchases of goods
and services
Savcor companies - 41 55 227
financial
management, legal
and IT services
Savcor Face Ltd - 8 8 51
marketing services
SCI-Finance Oy - 24 19 98
marketing and
administration
services
Others - legal 19 -1 30
service
Total 92 81 405
Interest income
Savcor companies 0 1 1
Interest expenses
and other
financial expenses
Savcor companies 38 36 162
SCI Invest Oy 17 15 57
SCI-Finance Oy - 18 0 0
funding
Muut 21 0 58
Total 94 51 277
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 0 0 1
Total 3 0 18
Non-current 1 951 0 1 882
convertible
subordinated loan
from related
parties
Non-current 119 0 0
interest payable
to related parties
Current convertible 364 1 195 364
subordinated loan
from related
parties
Other current 685 1 355 705
liabilities to
related parties
Current interest 111 264 156
payable to related
parties
Trade payables and 255 986 197
other
non-interest-beari
ng liabilities to
related parties
Trade and other 30 163 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 .
1 000 EUR 1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Wages and
remuneration
Salaries of the 182 179 856
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 Q1 2015.
Fair values
(unaudited)
Carrying Fair value
amount
1 000 EUR 31.3.2016 31.3.2016
--------------------------------------------------------------------------------
Financial assets
Available-for-sale investments 9 9
Trade and other receivables 10 342 10 342
Cash and cash equivalents 22 22
The fair value of trade and other receivables is expected to correspond to the
carrying amount due to their short maturity.
Financial liabilities
R&D loan, non-current 2 747 2 747
Non-current convertible subordinated loan 5 531 5 531
Loans from financial institutions, current 1 402 1 402
Current convertible subordinated loan 364 364
Other liabilities, current 1 350 1 350
Trade payables and other non-interest-bearing 6 503 6 503
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 5.9 million out of trade payables and other current liabilites was overdue
at the end of the reporting period. That included EUR 4.0 million of Savcor
Face Bejing's overdue liabilities. . In addition, an interest-bearing loan of
EUR 0,5 million to Savcor Group Limited / The Savcor Creditors' Trust and an
export credit limit of EUR 0,4 million to Danske Bank were overdue.
Change in intangible and tangible assets
(unaudited)
1 000 EUR 31.3.2016 31.3.2015 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 -175 -224 -696
Additions 133 41 395
Disposals -47 -38 -34
Discontinued operations 0 0 0
Exchange rate difference -4 0 0
Carrying amount, end of period 4 149 4 356 4 242
Commitments and contingent liabilities
(unaudited)
1 000 EUR 31.3.2016 31.3.2015 31.12.2015
-------------------------------------------------------------------------------
Loans from financial institutions 954 950 950
Promissory notes secured by pledge 12 691 12 691 12 691
Factoring loan and export credit limit 448 1 172 448
Trade receivables 0 73 0
Promissory notes secured by pledge 12 691 12 691 12 691
Collaterals given from other short-term loans
Deposits 489 539 509
Commitments - continuing operations
Payable within one year 61 83 61
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