Xinhua Finance Limited (TSE: 9399) Reports Solid 2007 First Half Results
15 August 2007 - 9:15PM
PR Newswire (US)
SHANGHAI, China, Aug. 15 /Xinhua-PRNewswire-FirstCall/ -- Xinhua
Finance Limited ("XFL"; TSE Mothers: 9399; OTC ADRs: XHFNY),
China's premier financial information and media service provider,
today announced business results for the six months ended June 30.
Under International Financial Reporting Standards ("IFRS"), total
revenue was US$109.5 million, representing a 46% increase
year-on-year, and 7% higher than management forecasts. EBITDA was
US$12.9 million, a 15% increase year-on-year and 51% ahead of the
forecast. Net income was US$90.9 million, compared to management
forecast of US$90 million. Fully diluted earnings per share (EPS)
was US$89.8, compared to US$5.6 in 2006. Proforma EBITDA, adjusted
to exclude non-cash ESOP expenses and one-time items, was US$22.6
million, an increase of 72% over US$13.1 million in the same period
last year. Proforma net income was US$6.5 million for the first
half of 2007 compared to US$8.0 million in the first half of 2006.
Proforma net income for first half of 2007 reflects all the
exclusions of proforma EBITDA, and excludes the non-cash one-time
gain from changes in equity interest of $97.5 million, and non-cash
finance costs. The decline in proforma net income from first half
of 2006 was primarily due to an increase in intangible asset
amortization arising from acquisitions in the distribution business
and interest expense. XFL provides proforma results to help
investors better understand the Company's underlying operating and
financial trends. XFL CEO Fredy Bush said, "We are pleased to see
the success of our content and distribution strategy. As is evident
from the results, our plan of leveraging our proprietary content
onto our distribution platforms in China is creating new areas of
revenue and growth for Xinhua Finance. Today, more than 50% of our
revenue and more than 60% of our EBITDA is coming from our China
businesses. We will continue to build on our unique position in
both content and distribution in China to maximize the
opportunities in this fast growing financial market." CFO David
Wang said, "XFL has continued to successfully leverage its
proprietary content and distribution platform as displayed by its
first half results exceeding management forecasts. We revised the
half year guidance upward in compliance with the Tokyo Stock
Exchange's requirements. Our prior net income forecast included an
expense provision to take into account possible non-cash
impairments which did not occur in the period. We continue to
provide for possible non-cash impairments in the second half of the
year. Therefore, we maintain our full year net income forecast for
the year at US$57.3 million." "Each of our service lines continues
to display strong growth prospects. We continue to be focused on
effective integration of our businesses worldwide and improving our
operational efficiency to support our business growth. With strong
first half results in line with management forecasts, we are
confident in achieving our full year forecasts and look forward to
robust performance in the second half," added Mr. Wang. First Half
2007 Actual vs. First Half 2007 Forecast (1)- unit: million USD 1H
2007 Actual 1H 2007 Forecast Variance Revenue 109.5 101.9 7%
Proforma EBITDA (2) 22.6 18.4 23% EBITDA (3) 12.9 8.6 51% Net
Income (4) 90.9 90.0 1% First Half 2007 vs. First Half 2006 - unit:
million USD 1H 2007 1H 2006 Variance Revenue 109.5 75.0 46%
Proforma EBITDA (2) 22.6 13.1 72% EBITDA (3) 12.9 11.3 15% Proforma
Net Income (5) 6.5 8.0 -19% Net Income 90.9 4.9 1772% First Half
2007 vs. First Half 2006 (Japan GAAP(6)) - unit: million USD 1H
2007 1H 2006 Variance Revenue 109.5 75.0 46% Proforma EBITDA (2)
22.5 13.4 68% EBITDA (3) 10.0 11.1 -10% Proforma Net Income (5) 0.7
0.4 55% Net Income 89.4 2.0 4345% (1) For six months ended June 30,
2007 results and six months ended June 30, 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 = JPY 123.26, from the Tokyo Foreign Exchange Market
as of June 29, 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 six months ended June 30, 2007 includes
non-cash one time charge of US$5.7m from the revaluation of a
convertible loan, one time legal expenses of US$0.6m and non-cash
ESOP expenses of US$3.3m. Under JGAAP, EBITDA for the six months
ended June 30, 2007 includes non operating income of US$10m, one
time legal expenses of US$0.6m and non-cash ESOP expenses of US$2m.
(4) Reforecast on August 14, 2007 (5) Under IFRS, Proforma net
income for six months ended June 30, 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, non cash finance costs of US$3.5m, one time legal expenses of
US$0.6m and non-cash ESOP expenses of US$3.3m. Under JGAAP,
Proforma net income for the six months ended June 30, 2007 excludes
a one-time gain of US$100.7m from the deemed disposal of a
subsidiary and related share issuance expenses of US$9.4m and non
cash ESOP expenses of US$2m (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 and share issuance
expenses. (Notes) A. We define EBITDA in relation to our IFRS
financial statements as profit or 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 ("XFL") 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's proprietary content
platform, comprising Indices, Ratings, Financial News, and Investor
Relations, serves financial institutions, corporations and
re-distributors worldwide. Through its subsidiary Xinhua Finance
Media Limited (NASDAQ:XFML), XFL leverages its content across
multiple distribution channels in China including television,
radio, newspaper, magazine and outdoor media. Founded in November
1999, XFL is headquartered in Shanghai, with offices and news
bureaus spanning 11 countries worldwide. For more information,
please visit http://www.xinhuafinance.com/ . This is a press
release to the public and should not be relied on as information to
make an investment decision by any investor. Investors should read
the Company's Securities Report filed to the Tokyo Stock Exchange
and consider the risk factors together with other information
contained therein when making an investment decision. This press
release contains some forward- looking statements that involve a
number of risks and uncertainties. A number of factors could cause
actual results, performance, achievements of the Company or
industries in which it operates to differ materially from any
future results, performance or achievements expressed or implied by
these forward-looking statements. More Information: Xinhua Finance
Hong Kong/Shanghai Ms. Joy Tsang Tel: +852-3196-3983,
+852-9486-4364, +86-21-6113-5999 Email: Taylor Rafferty (IR
Contact) Japan Mr. James Hawrylak Tel: +81-3-5444-2730 Email:
United States Mr. John Dudzinsky Tel: +1-212-889-4350 Email:
DATASOURCE: Xinhua Finance Limited CONTACT: Media Contact, Ms. Joy
Tsang of Xinhua Finance Media, +86-21-6113-5999, or ; IR Contacts,
Mr. James Hawrylak in Japan, +81-3-5444-2730, , or Mr. John
Dudzinsky in US, +1-212-889-4350, Web Site:
http://www.xinhuafinance.com/
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