Xinhua Finance Reports Strong Results for Q1 and Revises the Full Year Forecasts Upward
May 15 2007 - 10:00AM
PR Newswire (US)
SHANGHAI, China, May 15 /Xinhua-PRNewswire/ -- Xinhua Finance (TSE
Mothers: 9399; OTC ADR: XHFNY), China's premier financial
information and media provider, today reported total revenue for
the three months ended March 31, 2007, under International
Financial Reporting Standards ("IFRS"), of US$46.6 million, a 25%
increase over the first quarter of 2006. Net income was US$94.5
million for the first quarter of 2007, compared to US$3.6 million
for the first quarter 2006. Fully diluted earnings-per-share (EPS)
reached US$95.68, up from US$4.33 in 2006. Proforma EBITDA,
adjusted to exclude non-cash ESOP expenses and one-time items, was
US$10.8 million, an increase of 64% over US$6.6 million in the same
period last year. Proforma Net Income was US$4.8 million, adjusted
to exclude a one-time gain of $97.5 million from the initial public
offering of its consolidated subsidiary, Xinhua Finance Media
(NASDAQ:XFML), on the NASDAQ Global Market in March 2007 and other
non-cash expenses. Xinhua Finance provides proforma results to help
investors better understand the Company's underlying operating and
financial trends. Based on the Company's strong performance in the
first quarter, the IPO of Xinhua Finance Media (XFMedia), and the
improved business prospects across services lines, management is
revising its full year revenue and EBITDA forecasts upward. Fredy
Bush, CEO of Xinhua Finance, commented, "We continued to invest in
our business during the quarter as a long term growth strategy of
the Company. While the content business of the four core services
lines continued to achieve their expected milestones, the IPO of
XFMedia, our media distribution subsidiary, has unlocked value for
the Company and significantly enhanced our brand awareness and
reputation. XFMedia makes a positive contribution to the Company,
adding significant value for our shareholders, and its listing
provides additional resources to support the Company's future
acquisitions and business development." The market cap of XFMedia
was US$984 million at its IPO of which Xinhua Finance's
shareholding was valued at US$325 million. Ms. Bush added, "The
Company is further enhanced by the progress of our media
distribution business, which enables us to gain greater value from
our unique and proprietary content offerings that we create within
our core service lines. Through distribution across various China
media channels, we are able to leverage our content, brand name,
and client base to capture additional revenue streams, such as
advertising income." CFO Gordon Lau added, "We continue to
capitalize on the synergies and cross-selling opportunities across
our business lines. At the same time we continue to explore new
opportunities to add value to the Company and our footprint in the
Chinese market which is the strongest it has ever been. With our
upwardly revised forecast for full year 2007, we continue to
maintain a strict focus on cost control, and are confident in our
ability to continue our trend of profitable growth." First Quarter
2007(1) vs. First Quarter 2006(1) -- unit: million USD Q1 2007 Q1
2006 Variance Revenue 46.6 37.4 25% Proforma EBITDA(2) 10.8 6.6 64%
EBITDA(3) 3.0 5.8 -47% Proforma Net Income(4) 4.8 4.1 16% Net
Income 94.5 3.6 2,614% Full Year 2007 previous forecast(5) vs.
reforecast -- unit: million USD Previous forecast Reforecast
Variance Revenue 228.7 260.0 14% Proforma EBITDA(2) 45.7 60.5 33%
EBITDA 37.4 46.6 24% Net Income 53.3 57.3 8% First Quarter 2007
results (Japan GAAP(6)) -- unit: million USD Q1 2007 Q1 2006 %
change Revenue 46.6 37.4 25% Proforma EBITDA(2) 10.8 6.7 61% EBITDA
(3) 2.2 5.6 -61% Proforma Net Income(4) 0.3 0.2 63% Net Income 82.4
0.9 9,478% (1) For three months period-to-date ended March 31, 2007
results and three months ended March 31, 2006 results at current
Japanese yen exchange rate, the amounts in Japanese yen are
calculated by the foreign currency exchange rate (middle rate),
being US$1.00=Yen 118.05, from the Tokyo Foreign Exchange Market as
of March 30, 2007. (2) Proforma EBITDA under IFRS is EBITDA plus
non-cash ESOP expenses and excluding one time items. Proforma
EBITDA under JGAAP is EBITDA plus non-cash ESOP expenses and
recurring non operating income and excluding one time items. (3)
Under IFRS, EBITDA for the quarter ended March 31, 2007 includes
non- cash one time charge of US$5.7m from the revaluation of a
convertible loan and non-cash ESOP expenses of US$2.1m. For the
quarter ended March 31, 2006, EBITDA includes non-cash ESOP
expenses of US$0.9m. Under JGAAP, EBITDA for the quarter ended
March 31, 2007 includes non-cash ESOP expenses of US$1.4m. For the
quarter ended March 31, 2006 there was no ESOP expense. (4) Under
IFRS, Proforma net income for three months period-to-date ended
March 31, 2007 excludes a one-time gain of US$97.5m from the deemed
disposal of a subsidiary, a non-cash one time charge of US$ 5.7m
from the revaluation of a convertible loan and non-cash ESOP
expenses of US$2.1m . Under JGAAP, Proforma Net income for three
months period-to-date ended March 31, 2007 excludes a one-time gain
of US$105.8m from the deemed disposal of a subsidiary and related
share issuance expenses of US$22.4m and non cash ESOP expenses of
US$1.4m. (5) The previous forecast was made on March 15, 2007. (6)
The main reason for the differences between IFRS and Japan GAAP as
applied to us is that Japanese accounting standards take a
different approach to accounting for amortization of goodwill from
acquisitions. (Notes) A. We define EBITDA in relation to our IFRS
financial statements as profit (loss) before interest, tax,
depreciation and amortization. B. We define EBITDA in relation to
our JGAAP financial statements as operating income or loss plus
depreciation, amortization and amortization of goodwill. C.
Forecasts for fiscal 2007 are management estimates only; figures
have not been audited or reviewed. D. Performance estimates are
determined based on information currently available. Due to
unforeseen factors, actual performance may differ from estimates.
About Xinhua Finance Limited Xinhua Finance Limited is China's
premier financial information and media service provider and is
listed on the Mothers Board of the Tokyo Stock Exchange (symbol:
9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the
world, Xinhua Finance serves financial institutions, corporations
and re-distributors through five focused and complementary service
lines: Indices, Ratings, Financial News, Investor Relations, and
Distribution. Founded in November 1999, the Company is
headquartered in Shanghai, with offices and news bureaus spanning
14 countries worldwide. For more information, please visit
http://www.xinhuafinance.com/ . For further information Xinhua
Finance Japan Mr. Sun Jiong Tel: +81-3-3321-9500 Email: China Ms
Joy Tsang Tel: +8621-6113-5999 / +86-136-2179-1577 Email: Taylor
Rafferty (IR Contact) Japan Mr. James Hawrylak Tel: +81-3-5444-2730
Email: United States Mr. John P. Dudzinsky Tel: +1-212-889-4350
Email: DATASOURCE: Xinhua Finance Limited CONTACT: China, Ms. Joy
Tsang, +86-21-6113-5999, or ; or Japan, Mr. Sun Jiong,
+81-3-3321-9500, or , both of Xinhua Finance; or United States, Mr.
John P. Dudzinsky, +1-212-889-4350, or , or Japan, Mr. James
Hawrylak, +81-3-5444-2730, , both of Taylor Rafferty Web Site:
http://www.xinhuafinance.com/
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