DANSK INDUSTRI INVEST A/S 'Overall, Dantherm's operating results for Q1-Q3 2015 were unsatisfactory due to the loss- making Telecom business segment. In Q3 2015, the HVAC business segment posted an operating profit, and continues to develop more positively in 2015 than in 2014, primarily as a result of cost cuts cutbacks implemented. The development in operations and the delayed closing of the divestment of the Telecom business segment mean that intense efforts are still going into initiatives aimed at strengthening the company's capital structure.'
Agreement on divestment of the Telecom business segment
As reported in company announcement no. 3 of 24 March 2014, Dantherm has entered into an agreement on the divestment of the Telecom business segment to China Technologies Holdings Group. Contrary to expectations, the buyer has not yet been able to complete the transaction, and it has thus been assessed that the criteria for classifying the activities in the Telecom business segment as discontinuing operations have not been satisfied. Dantherm maintains a close dialogue with the buyer on the completion of the transaction and is working on a clarification.
The value of the Telecom business segment, including goodwill, is, as in the 2014 annual report and the Q1 and Q2 2015 interim reports, based on the share transfer agreement concerning the divestment of Telecom. If closing contrary to expectations is not completed, the valuation of the Telecom business segment will have to be assessed on the basis of an updated business plan, and write-downs including impairment losses of goodwill will have to be recognised, by a considerable amount, which in these circumstances may result in capital losses for the company under the rules set out in the Danish Companies Act (Selskabsloven).
Financing and capital structure
As reported in company announcement no. 2 of 27 March 2015, in March Dantherm renegotiated the agreement on committed facilities with its primary credit institutions. The credit institutions have undertaken to extend the facilities until January 2016, subject to certain conditions. Dantherm's liquidity is negatively impacted by the delayed divestment of the Telecom business and by the current operating situation within this segment, and a number of liquidity-enhancing initiatives are still being implemented with a view to maintaining operating activities at current levels going forward.
Due to the postponed closing of the divestment of the Telecom business and the group's general financing situation, the Dantherm management is continually stepping up its efforts to further strengthen the group's capital base.
Developments in Q3 2015
Revenue amounted to DKK 107m against DKK 116m in Q3 2014.
An operating loss (EBIT) of DKK 5.1m was posted against a profit of DKK 2.9m in Q3 2014.
An operating profit (EBIT) of DKK 4.2m was posted for the HVAC business segment (2014: DKK 5.5m), while the operating profit (EBIT) was negatively impacted by DKK 7.5m (Q3 2014: DKK 0.6m) from the Telecom segment.
Developments in Q1-Q3 2015
Revenue amounted to DKK 303m against DKK 321m in the prior-year period.
An operating loss (EBIT) of DKK 17.7m was posted against a loss of DKK 18.3m in the prior- year period.
An operating profit (EBIT) of DKK 7.9m was posted for the HVAC business segment (2014: DKK 2.1m), while the operating profit (EBIT) was negatively impacted by DKK 20.3m (Q1-Q3 2014: DKK 14.4m) from the Telecom segment.
Outlook for 2015
Dantherm maintains the outlook for 2015 of an improved operating profit (EBIT) of DKK 5-10m and revenue on a par with 2014. The outlook for 2015 is based on the divestment of the Telecom business segment being completed and thus on the results of the Telecom business segment being classified as profit/loss from discontinued operations.
If, contrary to expectations, the divestment is not completed, the valuation of the Telecom business segment will have to be based on an updated business plan, and the operating results (EBIT) will be negatively affected by write-downs including impairment losses of goodwill, of a considerable amount.
Any enquiries concerning this announcement can be directed to President & CEO Torben Duer on tel. +45 99 14 90 14.
Management's review 5
Developments in business areas 7
Outlook for 2015 7
Statement by the Board of Directors and the Board of Executives 8
Income statement 9
Statement of comprehensive income 10
Balance sheet 11
Cash flow statement 12
Statement of changes in equity 13
Notes 14
About Dantherm
Dantherm was founded in 1958 by Ejlert Olsen, the company's first product being a warm air heater for heating workshops and industrial buildings.
In the course of the following years, the product portfolio was extended to include dehumidifiers, ventilation products, mobile heating and cooling units (the HVAC segment) and climate control solutions for the telecom industry (the Telecom segment).
Today, Dantherm is divided into two business segments: HVAC (Heating, Ventilation, Air Conditioning) and Telecom.
Within the HVAC business segment, Dantherm is an important European provider of products and solutions based on more than 50 years of experience within the heating, ventilation, cooling and dehumidification of air.
Within the Telecom business segment, Dantherm is a leading supplier of climate control products for radio base stations in telecom networks. In March 2014, Dantherm entered into an agreement on the divestment of the Telecom business segment, but the transaction has not yet been completed.
Dantherm's special competencies comprise extensive know-how within climate control, product development expertise and state-of- the-art production and test facilities in Europe, Asia and North America.
Dantherm's markets are driven by an increased focus on indoor climate and energy efficiency, which supports the ambition to enhance the company's value through growth in revenue and earnings.
Dantherm is domiciled in Skive, Denmark, and has been listed on NASDAQ OMX since 2002.
Read more at www.dantherm.com
DKKm | Q3 | Q1-Q3 | FY | |||
2015 | 2014 | 2015 | 2014 | 2014 | ||
Income statement: | ||||||
Revenue | 107.0 | 115.7 | 303.3 | 320.5 | 441.0 | |
Earnings before depreciation, amortisation etc. (EBITDA) | -0.4 | 8.5 | -3.4 | 8.8 | 13.0 | |
Earnings before impairment of goodwill (EBITA) | -5.0 | 3.3 | -3.9 | -3.0 | -7.8 | |
Goodwill impairment | -0.1 | -0.4 | -0.5 | -11.8 | -11.0 | |
Operating profit/loss (EBIT) | -5.1 | 2.9 | -17.7 | -18.3 | -18.8 | |
Net financials | -4.6 | -3.3 | -11.5 | -11.2 | -14.8 | |
Earnings before tax (EBT) | -9.7 | -0.4 | -29.2 | -29.5 | -33.6 | |
Net loss for the period | -9.0 | -0.4 | -28.5 | -29.5 | -28.5 | |
Balance sheet, end of period: | ||||||
Working capital | 47.1 | 60.4 | 47.1 | 60.4 | 61.4 | |
Net interest-bearing debt | 213.9 | 209.5 | 213.9 | 209.5 | 209.1 | |
Balance sheet total | 386.8 | 394.9 | 386.8 | 394.9 | 387.5 | |
Equity | 37.2 | 58.7 | 37.2 | 58.7 | 59.6 | |
Invested capital | 251.1 | 268.3 | 251.1 | 268.3 | 268.7 | |
Cash flows: | ||||||
Cash flow from operating activities | 1.4 | 6.3 | 3.3 | 3.6 | 10.2 | |
Cash flow from investing activities | -2.1 | -0.5 | -8.1 | -9.6 | -16.3 | |
Cash flow from financing activities | -0.3 | -2.8 | -3.4 | -4.3 | -6.1 | |
Cash flow for the period | -1.0 | 3.0 | -8.2 | -10.3 | -12.2 | |
RATIOS | ||||||
Financial ratios: | ||||||
Growth rate (growth in revenue) | -7.5% | -0.8% | -5.4% | -9.9% | -8.4% | |
Profit margin (EBIT %) | -4.8% | 2.5% | -5.8% | -5.7% | -4.3% | |
Equity interest | 9.6% | 14.9% | 9.6% | 14.9% | 15.4% | |
Average number of employees | 420 | 463 | 418 | 468 | 460 | |
Share-related ratios: | ||||||
Earnings per share (continuing operations) (EPS), DKK | -1.3 | -0.1 | -4.0 | -4.1 | -4.0 | |
Diluted earnings per share (continuing operations) (EPS-D), DKK | -1.3 | -0.1 | -4.0 | -4.1 | -4.0 | |
Cash flow per share, DKK | 0.2 | 0.9 | 0.5 | 0.5 | 1.4 | |
Equity value, end of period, DKK | 5.2 | 8.2 | 5.2 | 8.2 | 8.3 | |
Share price, end of period, DKK | 8.3 | 11.1 | 8.3 | 11.1 | 9.2 | |
Price/equity value | 1.6 | 1.4 | 1.6 | 1.4 | 1.1 | |
Number of shares of DKK 10 each, end of period ('000) | 7,191 | 7,191 | 7,191 | 7,191 | 7,191 | |
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