Excluding Q1 FY2011’s ad hoc sales of USD2.1 million worth of SABRE™ 1 BGAN Terminals in meeting the needs of the 10 May 2010 Philippines’ National Elections, Q1 FY2012’s revenue increased 21.7% to USD2.8 million

 

Singapore, 12 August 2011 - Singapore Exchange Mainboard-listed Addvalue Technologies Ltd (“Addvalue” or the “Group”), a leading global developer and manufacturer of mobile satellite terminals supporting coverage provided by premier mobile satellite communication operators such as Inmarsat plc and Thuraya Telecommunications Company, announced its first financial quarter results for the three-month financial period ended 30 June 2011 (“Q1 FY2012”).in respect of the financial year ending 31 March 2012 (“FY2012”).


Q1 FY2012 Results Review

The Group recorded a turnover of US$2.8 million in Q1 FY2012 vis-à-vis that of US$4.4 million achieved in Q1 FY2011, which included the sale of about US$2.1 million worth of SABRETM 1 BGAN Terminals for partially meeting the needs of the10 May 2010 Philippines’ National Elections (the “Election SABRETM 1 Sale”). Excluding the Election SABRETM 1 Sale, the Q1 FY012’s turnover of US$2.8 million would have represented an increase of US$0.5 million or 21.7% over that of Q1 FY2011’s adjusted turnover of US$2.3 million, brought about mainly as a result of sales generated from a wider range of Inmarsat-centric land and maritime products and increased design income in Q1 FY2012.

The sale of SABRETM 1 BGAN Terminals, such as in respect of the Election SABRETM 1 Sale, tends to be ad hoc and lumpy in nature, the occurrence of which is to a large extent dependent on demand prompted by an impromptu event, such as a natural disaster, or a massive project, such as an election. While recurrence of such a revenue stream on an annual basis is anticipated (with the size of the sales of each occurrence varies according to the scale of the event or the size of the project), the recurrence may not occur on a quarterly basis.

Due principally to sales with better mix of higher yielding products, the gross profit margin of the Group also improved significantly from 43.1% in Q1 FY2011 to 53.8% in Q1 FY2012.

Commenting on the performance of the Group, Dr Colin Chan Kum Lok, Chairman and CEO of Addvalue, remarked that “notwithstanding the decrease in the after tax profit of the Group to US$209,000 in Q1 FY2012 from US$1.0 million in Q1 FY2011, a significant amount of which was attributed to the Election SABRETM 1 Sale, the Group not only improved its gross profit margin considerably but, more importantly, also strengthened its balance sheet and reduced its gearing from 28.3% to 21.9%.”

Prospects

“Gauging by the sizable shipment of our SABRETM BGAN Terminals (comprising mainly the SABRETM Ranger and the SABRETM Remote Terminals for SCADA applications) in the past three consecutive quarters ended 30 June 2011 and the strong interests generated when we launched our SAFARITM Vehicular Terminals in June 2011, barring any unforeseen circumstances, the Group expects its Inmarsat-centric land based BGAN products to generate significant sales for the remaining financial quarters of FY2012 and to continue to grow for the next 12 months.

“As regards the sales of our current range of Inmarsat-centric FleetBroadband Maritime Terminals, these are expected to reach steady-state sales in the next few quarters. With endeavour efforts made to expand our OEM FleetBroadband products to grow our sales in this market segment, barring any unforeseen circumstances, we also expect to launch a couple of new OEM FleetBroadband products over the next 12 months.

“The sales for our Seagull 5000i Terminals, which operate on Thuraya’s satellite network, are gaining traction as well since their initial launch in March 2011, particularly in East Asia and South East Asia, and we expect the sales to pick up speed in the second half of FY2012. We also have been contracted by a new customer to customize and supply a low cost Thuraya-centric satellite terminal, which targets the very cost conscious users in South East Asia, and we expect to commence the sale of this new low cost product by the last financial quarter of FY2012,” added Dr Colin Chan.

Barring unforeseen circumstances, the Group is optimistic about its performance for the remaining period of FY2012.

Notes:
1. The function currency and reporting currency of the Company and its subsidiaries have been changed from Singapore dollars (“S$”) to United States dollars (“US$”) with effect from 1 April 2011 as US$ best reflects the current and prospective economic substance of the underlying transactions and circumstances of the Group.

2. This press release should be read in conjunction with Addvalue’s results announcement for the first financial quarter ended 30 June 2011 posted on the Singapore Exchange on 12 August 2011.

 

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