Record quarterly series production of 1.70 million Engine
Equivalents
First Quarter 2014
-
Revenue for Period: SEK
14.6 million (SEK 11.7 million)
-
Operating Result: SEK 2.9
million (SEK 1.5 million)
-
Earnings per Share: SEK
0.45 per share (SEK 0.33 per share)
-
Cashflow from Operations:
SEK -2.1 million (SEK 0.2 million)
-
New System 3000 Plus
installation shipped to world's first purpose-built CGI foundry, in
China
-
100% year-on-year Engine Equivalent growth for
commercial vehicles
-
Ram diesel pick-up enjoys strong start of sales
in North America
-
Installed Base: 23 fully automated systems and
16 mini-systems in Europe, Asia and the Americas
Series
Production*
See PDF for graph
Series production increased 30%
year-on-year, with the first quarter of 2014 providing a new
quarterly record of 1.70 million Engine Equivalents. The outlook
for series production remains positive as commercial vehicle and
pick-up volumes continue to grow.
* Annualised average production of Engine
Equivalents during the quarter (1 Engine Equivalent = 50 kg)
CEO Comments
Commercial vehicles and pick-ups
lead the increase in series production
Annualised series production during the quarter increased to 1.70
million Engine Equivalents, providing a new quarterly record and
30% growth compared to the first quarter of 2013. Production
in March totalled 1.75 million Engine Equivalents, SinterCast's
second highest month ever.
The increase in series production
was primarily driven by a 100% year-on-year increase in commercial
vehicle volume, benefitting from new engine launches and the
introduction of Euro 6 emissions legislation on 1 January
2014. All commercial vehicles produced for sale in Western
Europe must now comply with the Euro 6 standard. Series
production also benefitted from increased pick-up volume in North
America, with the Ram 1500 becoming the second best-selling vehicle
in North America during March 2014, due in part to the start of
diesel sales in February. The three best-selling vehicles in
North America throughout the first quarter were all pick-ups.
SinterCast's links to the important pick-up sector were further
reinforced during the first quarter, following Ford's introduction
of the first-ever high volume CGI petrol engine. Announced at
the North American International Auto Show on 13 January, the 2.7
litre V6 petrol engine will be available later this year in the
Ford F150. Nissan has also announced the introduction of a
SinterCast-CGI V8 diesel engine in the next generation Titan, which
has been confirmed for launch at the North American International
Auto Show in January 2015. This progress provides SinterCast
with a presence in three of the five full-size pick-up entries, in
a market of approximately two million vehicles per year.
The first quarter also marked the
start of series production of industrial power components at the
Tupy foundry in Brazil, with the production of a CGI cylinder head
for an upgrade of the MTU Series 2000 engine. The use of
SinterCast-CGI was specified to enable increased power while
ensuring durability in the demanding duty cycles experienced by
marine, mining, construction and stationary power generating
applications. The MTU cylinder head establishes CGI
series production at Tupy across the complete spectrum of passenger
vehicle petrol and diesel cylinder blocks, commercial vehicle
cylinder blocks and heads, and industrial power engine components.
The entry into industrial power applications is a part of Tupy's
announced strategy to increase the CGI share in its cylinder block
and head production from the current 16% to 25%.
Intensified installation
activity
Following record installation revenue in 2013, the Technical Team
is particularly busy supporting new installations and upgrades in
Europe, Asia and the Americas. During January, SinterCast
secured a new order for a System 3000 Plus
from one of China's largest automotive component conglomerates, to
be installed at a purpose-built CGI foundry in China. The
equipment was shipped during the first quarter and is planned to be
installed during summer 2014. SinterCast will also supply the
mechanical infrastructure for the cored-wire base treatment and
correction operations and will provide technical support during the
installation and start of production. New installation
discussions are ongoing, providing opportunities to further expand
the production base.
SinterCast continues to provide
technical support for product development programmes for passenger
vehicle, commercial vehicle and industrial power applications in
Europe, Asia and the Americas. It is estimated that the
combined potential of the current series production programmes and
the programmes currently under development represents a market
opportunity of approximately 4.7 million Engine Equivalents per
year within SinterCast's five year planning horizon. It is further
estimated that the programmes that are currently in series
production have the potential to provide more than 2.5 million
Engine Equivalents when they reach mature volume.
Ductile Iron
technology
The recent development of the ductile iron technology has been
affected by the increased intensity in CGI activities and the need
to allocate resources to the core business. However, the
technical development is continuing and market opportunities
remain. The R&D function was reinforced during the first
quarter with the recruitment of a specialist engineer with a PhD in
cast iron solidification and extensive cast iron research
experience in Swedish academia. The new Senior Research
Engineer began employment at the Technical Centre in Katrineholm on
14 April and will provide additional resources to expand and
accelerate SinterCast's development activities. The
SinterCast ductile iron technology is expected to provide
additional benefit to customers by reducing magnesium consumption,
improving mould yield and reducing casting defects in the foundry,
and by improving machinability.
Financial Summary
Revenue
The revenue for the SinterCast Group relates primarily to income
from equipment, series production and engineering service.
Revenue Breakdown |
January-March |
January-December |
(Amounts in SEK million if not otherwise stated) |
2014 |
2013 |
2013 |
2012 |
Number of Sampling Cups shipped |
37,100 |
28,900 |
118,500 |
102,400 |
Equipment 1 |
2.5 |
2.3 |
10.1 |
9.0 |
Series Production 2 |
11.6 |
9.0 |
40.2 |
35.8 |
Engineering Service 3 |
0.5 |
0.3 |
1.4 |
1.0 |
Other |
0.0 |
0.1 |
0.2 |
0.1 |
Total |
14.6 |
11.7 |
51.9 |
45.9 |
|
|
|
|
|
Notes: |
1. |
Includes revenue from system sales and leases and sales of
spare parts |
|
|
2. |
Includes revenue from production fees, consumables and
software licence fees |
|
|
3. |
Includes revenue from technical support, on-site trials and
sales of test pieces |
|
The January-March
2014 revenue amounted to SEK 14.6 million (SEK 11.7 million).
The revenue from series production increased by approximately 30%
to SEK 11.6 million (SEK 9.0 million), due to the production of
approximately 1.70 million (1.30 million) annualised Engine
Equivalents and the shipment of 37,100 (28,900) Sampling Cups.
Equipment revenue amounted to SEK 2.5 million (SEK 2.3 million),
following the shipment of a complete System 3000 Plus to one of China's largest automotive component
conglomerates. Engineering Service amounted to SEK 0.5 million (SEK
0.3 million) following support provided to various customers
globally and the sale of test pieces.
Results
The business activities of SinterCast are best reflected by the
Operating Result. This is because the "Result for the period after
tax" and the "Earnings per Share" are influenced by the financial
income and costs and by the revaluation of tax assets.
Results Summary |
January-March |
January-
December |
(Amounts in SEK million if not otherwise stated) |
2014 |
2013 |
2013 |
2012 |
Operating Result |
2.9 |
1.5 |
7.3 |
1.0 |
Result for the period after
tax |
3.2 |
2.4 |
8.1 |
-3.7 |
Earnings per Share (SEK) |
0.5 |
0.3 |
1.2 |
-0.5 |
|
|
|
|
|
The January-March
2014 Operating Result of SEK 2.9 million (SEK 1.5 million)
increased by SEK 1.4 million, as a result of higher gross results
of SEK 1.5 million derived from higher revenue, higher operational
expenses of SEK 0.3 million, and higher exchange gains from
operating receivables and liabilities of SEK 0.2 million.
The Result for the period after
tax amounted to SEK 3.2 million (SEK 2.4 million), primarily
related to an increase in the Operating Result of SEK 1.4 million,
the increased financial net of SEK 0.2 million and decreased tax
net of SEK 0.8 million.
Deferred Tax
Asset
Tax amounted to SEK -0.1 million (SEK 0.7 million). The
difference is explained by the increase of the deferred tax asset
that was made during the first quarter 2013. The estimated future
taxable profit and deferred tax asset calculation is reassessed
every quarter. As of 31 March 2014, SEK 128.5 million (SEK 128.5
million) of SinterCast's total carried-forward tax losses have been
used as the basis of the updated calculation, resulting in SEK 28.3
million (SEK 28.3 million) being capitalised as a deferred tax
asset.
Cashflow, Liquidity and
Investments
Cashflow Summary |
January-March |
January-
December |
(Amounts in SEK million if not otherwise stated) |
2014 |
2013 |
2013 |
2012 |
Cashflow from operations, before change in working
capital |
3.4 |
1.9 |
8.1 |
3.5 |
Change in working capital |
-5.5 |
-1.7 |
6.3 |
-2.2 |
Cashflow from operations, after change in working
capital |
-2.1 |
0.2 |
14.4 |
1.3 |
Cashflow from investment activities
Cashflow from financing activities |
-0.1
- |
0.0
- |
-0.6
-1.4 |
-1.6
-11.9 |
Cashflow total |
-2.2 |
0.2 |
12.4 |
-12.2 |
Liquidity |
45.6 |
35.6 |
47.8 |
35.4 |
|
The January-March
2014 cashflow from operations before change in working capital
was SEK 3.4 million (SEK 1.9 million). The cashflow after changes
in working capital amounted to SEK -2.1 (SEK 0.2 million) primarily
related to increased receivables (SEK 3.7 million), decreased stock
(SEK 0.4 million) and decreased operating liabilities (SEK 2.2
million). The total cashflow result amounted to SEK -2.2 million
(SEK 0.2 million), after investments of SEK 0.1 million (SEK 0.0
million).
Risks and Uncertainty
Factors
The main uncertainty factor for SinterCast continues to be the
timing of the CGI market ramp-up. This primarily depends on
OEM decisions for new CGI products, the global economy for new
vehicle sales, and the individual sales success of vehicles
equipped with SinterCast-CGI components. The European and Asian
economies continue to be uncertain and this may impact passenger
vehicle and commercial vehicle sales. SinterCast's diversification
between V-diesel engines for passenger vehicles, commercial vehicle
engines, exhaust components, industrial power engines and most
recently, the first high volume CGI petrol engine launch, combined
with its presence in Europe, Asia and the Americas, reduces the
dependence on individual product applications and geographical
regions.
SinterCast enjoys global brand
recognition and respect as the CGI technology leader and is
welcomed by the industry as a reliable and trustworthy partner.
However, virtually every company encounters competition, and
SinterCast is no exception. SinterCast judges that its
technology and engineering know-how provides the most reliable and
cost-effective solution for series production of high quality
CGI.
New powertrain technologies, such
as vehicle electrification (hybrid and plug-in vehicles) and fuel
cells attract significant media attention; however, the development
and implementation of these technologies remain a long-term
prospect and SinterCast does not expect these technologies to have
a significant effect on the Company's competitive position for the
foreseeable future.
For full risk and
uncertainty factor information, please see note 26 on p.46 in
SinterCast's Annual Report 2013
Organisation
With successful high volume CGI production in foundries located in
Europe, Asia and the Americas, SinterCast has established a global
organisation with employees and offices in Sweden, the United
Kingdom, the United States, China and Korea. As of 31 March 2014,
the Group had 17 (19) employees, following the reassignment of two
individuals from employees to retained consultants. Three
(three) of the employees are female. A new Senior Research Engineer
was recruited during the period, with start of employment at the
Technical Centre in Katrineholm on 14 April. The Company is
well positioned to support global market activities and to drive
SinterCast's future growth.
Parent Company
SinterCast AB (publ) is the Parent Company of the SinterCast Group,
with its registered office located in Stockholm, Sweden. The Parent
Company has 12 (13) employees. The majority of the operations are
managed by the Parent Company while local operations in the UK,
USA, Korea and China are managed by the local companies. The
information given for the Group in this report corresponds in all
material respects to the Parent Company.
Accounting
Principles
The information provided on behalf of the Group in this interim
report has been prepared in accordance with Sweden's Annual
Accounts Act and IAS 34 Interim Financial Reporting. The reporting
for the Parent Company has been prepared in accordance with
Sweden's Annual Accounts Act and RFR 2. The accounting policies
that have been applied for the Group and the Parent Company are in
agreement with the accounting policies used in preparation of the
Company's latest annual report.
No material transactions have
taken place between SinterCast and the Board or the Management
during the period.
Events after the Balance Sheet
Date
The following press release has been issued:
15 April 2014 - Notice of the Annual General Meeting of SinterCast
AB (publ)
There have been no other
significant events since the balance sheet date of 31 March 2014
that could materially change these financial statements.
Annual Report 2013
The Annual Report 2013 was published on the SinterCast website on 3
April 2014. In consideration of cost efficiency and environmental
concern, the Annual Report 2013 was only issued in electronic
format, as a PDF file.
Annual General
Meeting
The Annual General Meeting 2014 of SinterCast AB (publ) will be
held at 15:00 on Tuesday 20 May 2014, at the Royal Swedish Academy
of Engineering Sciences (IVA), Grev Turegatan 16, Stockholm. The
notice to the Annual General Meeting was published on 15 April 2014
and is available on the SinterCast website.
Proposed Dividend
The Board's intention is to continue to provide an ordinary
dividend to the shareholders, based primarily on the cashflow from
operations. In the event that the Board considers that the
liquidity exceeds the amount needed to support the operational
requirements and strategic objectives, the Board has the option to
propose an extraordinary dividend or a share buy-back to further
adjust the liquidity.
The Board of Directors
propose an ordinary dividend of SEK 1.2 per share (SEK 1.0),
representing a transfer of SEK 8.5 million (SEK 7.0 million) to the
shareholders of SinterCast AB (publ). The Board proposes 23 May,
2014 as the record date for entitlement to receive dividends. In
deciding the amount of the dividend to be proposed to the AGM 2014,
the Board considered cashflow from operations, the financial
position, investment requirements and other factors, such as market
outlook, growth strategy and the internal financial forecast for
the Company and for the Group.
The Board of Directors propose
the following dates for the Annual General Meeting and for
entitlement to receive dividends:
14 May 2014 |
Shareholders who wish to participate in the AGM, must be recorded
in the share register maintained by Euroclear, in their own names,
and notify SinterCast of their attendance. |
15 May 2014 |
Shares
traded on this date are eligible for dividend |
16 May 2014 |
Shares
traded on this date are not eligible for dividend |
20 May 2014 |
The
Annual General Meeting will be held at 15:00 |
23 May 2014 |
The
record date for entitlement to receive dividends is three bank days
after the AGM. |
28 May 2014 |
Anticipated payment of dividend via Euroclear, three bank days
after the record date for entitlement to receive dividends. |
Information
The Interim Report April-June 2014 will be published on 20 August
2014
The Interim Report July-September 2014 will be published on 5
November 2014
The Interim Report October-December 2014 and Full Year Results 2014
will be published on 11 February 2015
The Interim Report January-March 2015 will be published on 29 April
2015
This report has not been reviewed by the Company's
Auditors.
Stockholm 23 April 2014
For further information please contact:
Dr. Steve Dawson |
President & CEO |
SinterCast AB (publ) |
Office: |
+46 8 660
7750 |
Mobile: |
+44 771
002 6342 |
e-mail: |
steve.dawson@sintercast.com |
website: |
www.sintercast.com |
SinterCast is
the world's leading supplier of process control technology for the
reliable high volume production of Compacted Graphite Iron (CGI).
With at least 75% higher tensile strength, 45% higher stiffness and
approximately double the fatigue strength of conventional grey cast
iron and aluminium, CGI allows engine designers to improve
performance, fuel economy and durability while reducing engine
size, weight, noise and emissions. The SinterCast technology, with
39 installations in 12 countries, is primarily used for the
production of petrol and diesel engine cylinder blocks and exhaust
components for passenger vehicles, medium-duty and heavy-duty
cylinder blocks and heads for commercial vehicles, and industrial
power engine components for marine, rail, off-road and stationary
engine applications. SinterCast's series production components
range from 2 kg to 9 tonnes, all using the same proven process
control technology. The SinterCast share is quoted on the
Small Cap segment of the Stockholm NASDAQ OMX stock exchange
(Stockholmsbörsen: SINT). For more information:
www.sintercast.com
END
Press Release PDF
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: SinterCast via Globenewswire
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