EUROTECH: THE BOARD OF DIRECTORS APPROVES THE INTERIM MANAGEMENT
REPORT AT 31/03/12.
Amaro (Italy), 14 May 2012 - - - - - - - - Consolidated revenues:
from EUR 20.72 million to EUR 20.40 million Consolidated gross
profit: from EUR 10.69 million to EUR 10.55 million Consolidated
EBITDA: from EUR 178 thousand to EUR 199 thousand Consolidated
EBIT: from EUR -1.77 million to EUR -1.71 million Consolidated
pre-tax profit (loss): from EUR -2.11 million to EUR -1.49 million
Group net profit (loss): from EUR -2.29 million to EUR -1.52
million Net financial debt: EUR 18.34 million Group shareholders'
equity: EUR 123.41 million
Today, the Board of Directors of Eurotech S.p.A. reviewed and
approved the results for the first quarter of 2012. In the first
three months of the year, consolidated revenues totalled EUR 20.40
million versus EUR 20.72 million in the first three months of 2011.
The result reflects the course of orders intake in the fourth
quarter of 2011 and, in view of the low historic rate in the first
quarter on annual revenue, it allows management to continue to look
positively at the year underway. The company continues to carefully
monitor the economic trends of the geographic areas in which it is
most present: the first months of 2012 have confirmed the scenario
described also in the letter to shareholders, where Japan and the
United States are showing some positive signs, while Europe is
displaying an uncertain situation with poor visibility on future
developments. The company is continuing its efforts to streamline
costs: similar to what happened in 2011, all necessary steps are
being taken to lower the breakeven point, without sacrificing
investments aimed at maintaining and developing the Group's
competitive edge. Gross profit came to 51.8%, a value slightly
higher than the data in 2011 and the level of 50% set by
Management. This confirms the soundness of the business model
implemented with target profitability under control. Due to the
different exchange rate used to convert the financial statements of
the foreign companies, the operating costs gross of adjustments
remained constant, coming to EUR 11.0 million in the first quarter
versus EUR 11.1 million in the first quarter 2011. Considering the
amounts in foreign currency from one period to the next, savings
due to the actions undertaken in 2011 and which are providing their
benefits in 2012 would be visible.
EUROTECH spa Via F. Solari, 3/A 33020 Amaro (UD) - ITALY Tel. +39
0433 485411 Fax. +39 0433 485499 ir@eurotech.com
www.eurotech.com
In the early months of 2012, additional actions were taken to make
the structure more streamlined and lower the threshold of
activation of the operating leverage: the number of employees of
the Group experienced a decrease of 25 members at year-end 2011,
shrinking from 463 to 438. The effects of these actions will be
visible in the form of lower costs largely from the second half of
the year and will continue to yield benefits after the current
financial year. Management expects to see a decrease in the
operating costs, gross of adjustments, of EUR 2.1 million on an
annual basis, compared to the 2011 figures and at equivalent
exchange rates. Limiting fixed cost and streamlining the existing
resources are a Group priority, which aims to obtain a considerable
increase in profitability. Earnings before interest, taxes,
depreciation and amortization amounted to a positive EUR 199
thousand in the first three months of 2011, in line with the EUR
178 thousand in 2011. The proportion of EBITDA on revenue was
essentially unchanged, increasing from 0.9% in the three months of
2011 to 1.0% in the same months in 2012. EBIT in the first quarter
2011 came to EUR -1.71 million, substantially unchanged with
respect to the first quarter 2011 value, when it was EUR -1.77
million. The proportion of EBIT on revenue was also steady: -8.4%
compared to -8.5% in the first quarter 2011. This performance was
impacted by the EBITDA result, as well as depreciation and
amortisation posted to the income statement in the first quarter of
2012, arising both from operating assets that became subject to
amortisation as at 31 March 2012 and from PPA effects relating to
the acquisitions of Eurotech Inc. (formerly Applied Data Systems
Inc.), Dynatem Inc. and the Advanet Group. The effect on EBIT of
the higher values attributed as a result of price allocation was
EUR 0.93 million between January and March 2012, compared with EUR
0.86 million in the same period in 2011. The Group posted a pre-tax
loss in the first quarter 2012 of EUR 1.49 million (compared to a
loss of EUR 2.11 million in the same period 2011) and was affected
by the factors illustrated above as well as by positive financial
management due to the differentials on exchange rates. The effects
of price allocation on the pre-tax result amounted to EUR 0.93
million in the first quarter 2012, compared with EUR 0.86 million
in the same period in 2011. In terms of the consolidated result
after taxes, the loss decreased from a loss of EUR 2.29 million in
the first quarter 2011 to EUR 1.52 million in 2012. The dynamic
reflects the result before taxes as described above. As at 31 March
2012, the Group featured net financial debt of EUR 18.34 million
vs. EUR 14.33 million at 2011 year-end due largely to two factors:
the exchange rate effect during currency conversion of cash and
cash equivalents at the American and Japanese companies for EUR
1.79 million and use of cash to support company management for EUR
1.54 million.
We advise the public that, as required by the CONSOB (Italian
securities & exchange commission), the Consolidated Interim
Management Report at 31 March 2012 is available to anyone who
requests it at the Company's registered office as well as the
headquarters of Borsa Italiana S.p.A. The Report is also available
on Eurotech's website, www.eurotech.com Pursuant to
Article1542-bis, Paragraph 2, of the Italian Consolidated Finance
Act, the Financial Reporting Manager of Eurotech SpA, Sandro
Barazza, hereby declares that the financial disclosure contained in
this press release corresponds to the Company's documentary
evidence, corporate books, and accounting records.
THE EUROTECH GROUP Eurotech (ETH.MI) is a global company based in
Italy and with offices and subsidiaries in Europe, North America
and Asia. The Eurotech group develops and markets miniaturised
computers for special use (NanoPCs) and computers featuring
elevated computing capacity (HPCs High-Performance Computers).
With these two product categories, Eurotech aims to become a leader
in the implementation of the pervasive computing scenario, which,
leveraging on the Cloud IT infrastructure, is capable of enabling
an entire range of businesses and value-added services in the
transport, defence, industrial, medical and scientific-research
sectors.
Company contacts: Investor relations Andrea Barbaro Tel. +39 0433
485411 e-mail: andrea.barbaro@eurotech.com
Corporate Press Office Cristiana della Zonca Tel. +39 0433 485411
e-mail: cristiana.dellazonca@eurotech.com
International Press Office Citysavvy Jana Sanchez Tel. +44 207395
1000 jana@citysavvy.com
ANNEXES FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT ( '000) Sales revenue Cos t of
material Gr o s s profit Ser v ic es costs Leas e & hire costs
Pay r oll costs Other provisions and costs Other revenues EBITDA
Depr ec iation & Amortization A s s et impairment EBIT Shar e
of associates' profit at equity Financ e expense Financ e income Pr
of it before tax Inc ome tax Ne t profit before m ino r it y
interest M in or it y interest Gr o up net profit (loss) Bas e
earnings per share Dilu t e d earnings per share 3 months 2012 (b)
% 3 months 2011 (a) 20,718 ( 10,026) 10,692 ( 3,903) ( 599) (
6,270) ( 342) 600 178 ( 1,944) 0 ( 1,766) 0 ( 959) 619 ( 220) (
2,326) ( 34) ( 2,292) ( 0.065) ( 0.065) ch an g e (b-a) % am o u n
t ( 324) ( 186) ( 138) ( 166) ( 31) 230 ( 96) 96 21 ( 39) 0 60 ( 9)
179 728 618 ( 184) 802 34 768 %
-16% .
20,394 100.0% ( 9,840) -48.2% 10,554 5 1. 8 % ( 3,737) ( 568) (
6,500) ( 246) 696 199 ( 1,905) 0
-1 .3% 8 -2.8% -319% . -12% . 3.4%
1 0.0% 0
-48.4% 5 1. 6 % -1 .8% 8 -2.9% -30.3% -17% . 2.9%
19% . - 1. 3 % -4.3% 5.2% 3.7% 28.1 % 1 .0% 6
1. 0 % -9.3% 0.0%
0 .9 % -9.4% 0.0% - 8 .5 %
11. 8 % -2.0% n/ a 3 .4 %
( 1,706) - 8 . 4 % 9 ( 1,138) 1,347 ( 36) 0
0.0% -5.6% 6.6%
0.0% -4.6% 3.0%
n/ a -1 .7% 8 1 7.6% 1 2 9 .3 % -83.6% 3 4 .5 % 10 0 . 0 % 3 3 .5
%
( 1,488) - 7 . 3 %
-0.2%
( 2,106) - 10 . 2 %
-11 .% - 11. 2 % - 0 .2 % - 11. 1%
( 1,524) - 7 . 5 %
0 .0 %
( 1,524) - 7 . 5 % ( 0.043) ( 0.043)
CONSOLIDATED BALANCE SHEET & STATEMENT OF FINANCIAL
POSITION
('000) at March 31, 2012 at December 31, 2011
ASSETS Intangible assets Pr oper ty , Plant and equipment Inv es
tments in affiliate companies Inv es tments in other companies Def
er r ed tax assets Other non current financial assets Other
non-current assets T ot al non-current assets Inv entor ies Contr
ac ts in progress Tr ade receivables Inc ome tax receivables Other
current assets Rec eiv ables from affiliates companies Short term
borrow ing allow ed to affiliates companies and other Group
companies Cas h & cash equivalents T ot al current assets T ot
al assets 118,165 5,299 269 264 1,574 186 781 126,538 22,249 1,374
23,556 501 2,860 71 81 10,248 60,940 187,478 125,922 5,897 278 270
1,439 226 843 134,875 23,734 2,356 26,724 938 2,569 1,163 178
13,596 71,258 206,133
L IABILIT IES AND EQUITY Share capital Share premium reserve Other
reserves Gr o up shareholders' equity Eq u it y attributable to m
in o r it y interest T ot al shareholders' equity Medium- /long-
ter m borrow ing Employ ee benefit obligations Def er r ed tax
liabilities Other non-current liabilities T ot al non-current
liabilities Tr ade payables Short- ter m borrow ing Der iv ativ e
instruments Inc ome tax liabilities Other current liabilities Bus
ines s combination liabilities T ot al current liabilities T ot al
liabilities T ot al liabilities and equity 8,879 136,400 ( 21,865)
123,414 0 123,414 10,430 1,624 11,342 1,576 24,972 13,327 17,808
405 959 6,383 210 39,092 64,064 187,478 8,879 136,400 ( 10,236)
135,043 0 135,043 10,482 1,718 12,111 1,586 25,897 18,388 17,253
376 1,731 7,229 216 45,193 71,090 206,133
STATEMENT OF CHANGES IN EQUITY
Sh ar e capital ('000) B al an ce as at December 31, 2011 8,879
L eg al reserve
Sh ar e premium reserve
C o n ver si o n reserve
Oth er reserves
C ash flow hedge reserve
Exch an g e rate differences reserve ( 124) ( 1,340) ( 7,246) Tr
easu r y shares Pr o fi t (loss) for period
Gr o u p shareholders' equity
Eq u i ty attributable to Minority interest -
To tal shareholders' equity
39
136,400
34,514
( 35,703)
( 376)
135,043
135,043
2011 Result allocation Profit (loss) as at Marzo 31, 2012
Comprehens i ve other profit (loss) - Hedge transactions - Foreign
balance sheets conversion difference - Exchange differences on
equity investments in foreign companies Compr ehens iv e result
-
-
-
-
( 7,246) -
-
-
-
7,246 ( 1,524)
( 1,524)
-
( 1,524)
-
-
-
( 9,432) ( 9,432)
-
( 29)
-
-
( 1,524)
( 29) ( 9,432) ( 644) ( 11,629)
-
( 29) ( 9,432) ( 644) ( 11,629)
( 29)
( 644) ( 644)
B al an ce as at March 31, 2012
8,879
39
136,400
25,082
( 42,949)
( 405)
( 768)
( 1,340)
( 1,524)
123,414
-
123,414
ABRIDGED CASH FLOW STATEMENT
at March 31, ('000) 2012
at December 31, 2011 1,063 ( 8,420) ( 4,123) 1,325 ( 10,155) 23,751
13,596
at March 31, 2011
Cas h flow generated (used) in operations Cas h flow generated
(used) in investment activities Cas h flow generated (used) in
financial activities Change in the conversion difference Inc r eas
e (decrease) in cash & cash equivalents Opening amount in cash
& cash equivalents End of period in cash & cash
equivalents
( 1,544) ( 515) 503 ( 1,792) ( 3,348) 13,596 10,248
( 2,504) ( 2,073) ( 2,221) ( 1,424) ( 8,222) 23,751 15,529
NET FINANCIAL POSITION
at March 31, ('000) Cas h & cash equivalents Cas h equivalent
Other current financial assets Der iv ativ e instruments Shor t-
ter m borrow ing Bus ines s aggregation liabilities Sho r t - t e r
m financial position Sho r t - t e r m net financial position
Medium/long term borrow ing allow ed to affiliates companies Bus
ines s aggregation liabilities Other non current financial assets
Medium/long term borrow ing M e d iu m - /lo n g - t e r m net
financial position A B=A C D E F G=C+D+E+F H=B+G I J K L M =I+J+K+L
2012 ( 10,248) ( 10,248) ( 81) 405 17,808 210 18,342 8,094 0 0 (
186) 10,430 10,244
at Decem b er 31, 2011 ( 13,596) ( 13,596) ( 178) 376 17,253 216
17,667 4,071 0 0 ( 226) 10,482 10,256
at March 31, 2011 ( 15,529) ( 15,529) 0 253 7,574 0 7,827 ( 7,702)
( 940) 0 ( 236) 22,063 20,887
( NET FINANCIAL POSITION) NET DEBT
N=H+M
18,338
14,327
13,185
NET WORKING CAPITAL
at March 31, ('000) 2012 (b )
at December 31, 2011 (a)
at March 31, 2011 C h an g es (b -a)
Inventories Contr ac ts in progress Tr ade receivables Rec eiv
ables from affiliates companies Inc ome tax receivables Other
current assets Cur r ent assets Tr ade payables Inc ome tax
liabilities Other current liabilities Cur r ent liabilities Ne t w
o r k in g capital
22,249 1,374 23,556 71 501 2,860 50,611 ( 13,327) ( 959) ( 6,383) (
20,669) 29,942
23,734 2,356 26,724 1,163 938 2,569 57,484 ( 18,388) ( 1,731) (
7,229) ( 27,348) 30,136
23,714 2,733 22,400 0 2,492 2,759 54,098 ( 16,912) ( 462) ( 5,372)
( 22,746) 31,352
( 1,485) ( 982) ( 3,168) ( 1,092) ( 437) 291 ( 6,873) 5,061 772 846
6,679 ( 194)
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