United Power Technology improves 9 months results in spite of challenging market conditions
Interim Report 9-months 2012
- Total revenues increased by 8.6% to EUR 83.6 million
- EBIT grew by 19.4% to EUR 13.6 million
- Sales of commercial generators segment advanced to EUR 44.5 million
United Power Technology Group, one of the leading manufacturers of engine-driven power equipment in China, has improved its results in the first nine months 2012, in spite of the challenging market conditions in Europe and China. Due to a strengthened sales effort and increased orders from the US market both revenues and earnings before interest and taxes (EBIT) advanced compared to the period of the previous year. Also, the enhanced sales activities led to a significant increase in the commercial generators segment, which advanced by 26.6% from EUR 35.1 million to EUR 44.5 million. Group revenues grew by 8.6% to EUR 83.6 million (9M 2011: EUR 77.0 million) while EBIT increased by 19.4% to EUR 13.6 million (9M 2011: EUR 11.4 million).
Gross profit slightly decreased from EUR 17.7 million by 3.1% to EUR 17.2 million, primarily due to the RMB currency appreciation against Euro throughout 2011 and higher fixed asset depreciation costs. This led to a lower gross profit margin of 20.5% (9M 2011: 23.0%).
In the first nine months 2012 the EBIT margin improved to 16.2% compared to an EBIT margin of 14.8% for the same period last year. Adjusted for IPO expenses, the EBIT margin decreased from 17.8% for nine months 2011 to 16.2% for the current reporting period. The lower adjusted EBIT margin is mainly associated with the decrease in the gross margin as well as the higher expenses associated with being a listed company.
The company's cash and cash equivalents increased by 24.9% from EUR 27.0 million as of 31 December 2011 to EUR 33.7 million as of 30 September 2012. This is mainly due to cash generated from operating activities of EUR 17.4 million in the reporting period.
Total equity increased by 12.0% from EUR 91.5 million at the end of 2011 to EUR 102.5 million as of 30 September 2012. On the balance sheet date the equity ratio remained on a high level of 81.6%.
The company believes that it has demonstrated the resilience of the business in the current financial year despite a difficult environment. Several factors may have a positive impact on the future revenues and earnings: for example the effects of the recent Superstorm 'Sandy' on the US economy and electricity grid may lead to increased orders from the US customers.
Despite the fact, that revenues in the fourth quarter historically have been lower than in the second and third quarter, the management reconfirms the outlook for the full year 2012, expecting a revenue growth of 10.0% with an EBIT margin somewhat below the adjusted EBIT margin of 2011 (16.6%). This implies no further material changes in the EUR:RMB exchange rate and an improving economic environment with stabilization in the Eurozone as well as in China in the fourth quarter of 2012.
"Our strategy of geographical diversification will enhance the company's performance, making us less vulnerable to temporary weaknesses. We are confident that further positive operational results will enable us to extend our strong footprint. We will work hard to continue our performance in the future and accomplish a successful year-end", says Mr. Xu Wu, Chairman and Co-CEO of United Power Technology.
Disclaimer concerning prognoses
This communication contains forward-looking statements. Forward-looking statements are statements that are not historical facts instead they reflect United Power's current views and expectations and the assumptions underlying them about future events. Forwardlooking statements are subject to many risks and uncertainties. If any of such risks and uncertainties materialise or if the assumptions underlying any of United Power's forward-looking statements are proving to be incorrect, United Power's actual results may be materially different from those expressed or implied by such forward-looking statements. United Power does not intend or assume any obligation to update these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made.
United Power Technology AG
United Power Technology Group designs, develops, manufactures and sells engines and an extensive range of engine-driven power equipment, including generators, outdoor power equipment, as well as components.
Its major products comprise residential as well as commercial generators, which are currently delivered to more than 50 countries in the world. The operational companies of United Power Technology Group are incorporated under the laws of the People's Republic of China and located in Fuzhou and Shanghai, China.