Balda: Increase in turnover – negative result due to high depreciations

The Balda Group (www.balda.de) increased its turnover at 24.0 million euros or 11.2 percent to 238.0 million euros in the financial year 2008 in the continued operations (previous year: 214.0 million euros). The continued operations of the plastic specialist and mobile phone components supplier comprise the turnover of the Infocom-group of companies in the region of Asia and India, inclusive of touch screen-manufacturer TPK with revenues von 71.2 million euros to the end of the third quarter. Despite the positive development of the revenues, the earnings before tax (EBT) and the net earnings slid into minus due to special items. The EBT amounts to minus 9.4 million euros after plus 2.3 million euros in the previous year. In total Balda Group achieved (discontinued and continued operations) a turnover volume of 283.9 million Euros (previous year: 309.2 million euros). Earnings before income taxes 2008 amount to minus 44.5 million euros (previous year: minus 68.3 million euros), earnings after taxes reached minus 49.5 million euros (previous year: 73.3 million euros). The operative cash-flow to the year-end 2008 increased from minus 13.0 million euros in the previous year to 37.1 million euros.

Continued operations
The earnings before interest, tax and depreciations (EBITDA) amount to 25.7 million euros (previous year: 29.5 million euros). Especially the above average high depreciations of 24.4 million euros (previous year: 16.0 million euros) put pressure on the operative result (EBIT) 2008 to only 1.4 million euros (previous year: 13.5 million euros). In the previous year the EBIT was positive influenced by special effects. On the other hand, the EBIT 2008 was negatively influenced by special items amounting to 13.5 million euros. High financial costs of 14.3 million euros (previous year: 11.2 million euros) have burdened the earnings before tax (EBT) of minus 9.4 million euros (previous year: plus 2.3 million euros).

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The Balda Group recorded a net loss of 14.2 million euros (previous year: minus 2.8 million euros) in the continued operations. The earnings per share amounted on the basis of 54.157 million shares in the continued operations of the group to minus 0.263 euros (previous year: minus 0.060 euros).

The short-term liabilities of the group reduced to 161.1 million euros (previous year: 178.6 million euros). Including the reclassified amount of 27.3 million euros from a long-term credit the short-term liabilities opposite financial institutions increased by 7.0 million euros to 100.7 million euros.

The long-term liabilities reduced by more than half from 93.6 million euros to 38.7 million euros, especially due to amortisation and the above mentioned reclassifications. The equity-ratio of the group amounted to 33.5 percent in the year under report after 35.7 percent in the previous year.

A precise numbered prognosis for the operative business 2009 identifies the company as difficult at present. The Group has processed the expenditure of the past years in the balance sheet to the best of their knowledge. In future the earnings of the actual business will influence the balance sheet and the earnings statement. After the end-consolidation of TPK, basis for the turnover planning 2009 are the Group revenues of 2008 of 238.0 million euros less the share of the turnover 2008 of TPK amounting to 71.2 million euros, also around 167.0 million euros.

Given the situation of single customers and the insecurities of the worldwide economy, the group cannot exclude slumps in revenues. After a good financial year 2008 in the Asia region, the Balda Group expects for the year 2009, at a fundamentally unchanged turnover level and despite reducing expenditure volume, an above average decline of the EBIT for the Asian region. Referring to the group the company plans an improvement of the EBIT compared to 2008. Due to the possible commencing earning share of TPK, the company expects a stronger increase of the earnings before tax than the EBIT.

Goal 2009: At least balanced result
Balda’s objective for 2009 - even in the case of dropping sales - is to achieve balanced results at minimum. In spite of globally shrinking economic activity, the company is confident to gain new customers and projects in 2009.

About Balda
The Balda Group develops and produces highly integrated devices comprising plastic and electronic components, primarily for the telecommunications sector. In addition, the company manufactures high-tech components such as headphones and hands-free sets.

Balda AG, Bad Oeynhausen, Germany

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