Hong Kong Exchanges and Clearing Limited (a company incorporated in Hong Kong with limited liability) and the Exchange take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.
VODATEL NETWORKS HOLDINGS LIMITED ฌ ༺ л ၣ ഖ છ ٰ Ϟ ࠢ ʮ ̡ *
(Incorporated in Bermuda with limited liability)
Stock Code: 8033
BUSINESS AND FINANCIAL HIGHLIGHTS FOR THE THREE-MONTH PERIOD AND NINE-MONTH PERIOD
h Due to a stronger third quarter in 2018, the Group reported revenue of HK$108,050,000 and HK$287,562,000 for the Three-Month Period and Nine-Month Period, representing a growth of 4.58% and 13.83% respectively
h As a result of the mix of sales comprising a relatively higher percentage of the lower-margin hardware sales, the Group reported net loss of HK$2,800,000 for the Three-Month Period, whereas attributable to two consecutive stronger quarters in 2018 as compared to 2017, net loss for the Nine-Month Period narrowed from HK$13,105,000 to HK$7,987,000
h Although "Vodatel" brand of companies in Macao, Hong Kong and Mainland China were only able to add approximately HK$57,000,000 to its order book during the Three-Month Period, new orders in the areas of DWDM infrastructure and SD-WAN infrastructure were recorded
h MDL continued to secure over HK$30,000,000 worth of contracts during the Three-Month Period, however, narrowing margins in different contracts has been observed mainly due to increasing competition from other local system integrators as a result of absence of ample business opportunities in the gaming sector
h TTSA remained positive over the partial recovery of the outstanding receivables that the Government of Timor-Leste owes to TTSA
h Total net cash balances and yield-enhanced financial instruments as at 30th September 2018 totalled HK$136,919,000 or approximately 43.16% of total assets
h The Directors do not recommend payment of an interim dividend for the Nine-Month Period
THIRD QUARTER RESULTS
The Board is pleased to present the unaudited consolidated results of the Group for the Three-Month Period and Nine-Month Period, which was reviewed by the audit committee of the Company, as follows:
Unaudited | |||||
Three months | Nine months | ||||
ended | ended | ||||
Three-Month | 30th September | Nine-Month | 30th September | ||
Period | 2017 | Period | 2017 | ||
Notes | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Revenue | 108,050 | 103,316 | 287,562 | 252,620 | |
Cost of sales of goods | (69,656) | (67,591) | (177,347) | (161,329) | |
Cost of providing services | (18,288) | (13,682) | (45,904) | (34,572) | |
Gross profit | 20,106 | 22,043 | 64,311 | 56,719 | |
Selling, marketing costs and | |||||
administrative expenses | (23,614) | (24,319) | (74,868) | (72,093) | |
Other gains | 63 | 298 | 851 | 714 | |
Operating loss | (3,445) | (1,978) | (9,706) | (14,660) | |
Finance income | 687 | 421 | 1,892 | 1,552 | |
Finance costs | (42) | (1) | (67) | (1) | |
Finance income - net | 645 | 420 | 1,825 | 1,551 | |
Share of profit of an associate | - | 4 | - | 4 | |
Loss before income tax | (2,800) | (1,554) | (7,881) | (13,105) | |
Income tax expense | 1 | - | - | (106) | - |
Loss for the period | (2,800) | (1,554) | (7,987) | (13,105) | |
Loss is attributable to: | |||||
Owners of the Company | (2,418) | (1,678) | (6,940) | (12,213) | |
Non-controlling interests | (382) | 124 | (1,047) | (892) | |
(2,800) | (1,554) | (7,987) | (13,105) | ||
Loss per Share for loss | |||||
attributable to the ordinary | |||||
equity holders of the Company | |||||
(expressed in HK cents per Share) | |||||
Basic and diluted loss | |||||
per Share | 2 | (0.39) | (0.27) | (1.13) | (1.99) |
Dividends | 3 | - | - | - | - |
- 2 - |
Notes to the condensed consolidated income statement
1 Income tax expense
Hong Kong profits tax was provided at the rate of 8.25% for the first HK$2,000,000 of assessable profits of one of the subsidiaries incorporated in Hong Kong and 16.5% on other assessable profits for the Nine-Month Period (nine months ended 30th September 2017: 16.5% for all assessable profits). Taxation on non-Hong Kong profits was calculated on the estimated assessable profits for the Nine-Month Period at the rates of taxation prevailing in the regions in which the Group operated.
2 Loss per Share
(a) Basic loss per Share
Basic loss per Share was calculated by dividing:
• the loss attributable to owners of the Company.
• by the weighted average number of Shares outstanding during the Nine-Month Period.
(b) Loss used in calculating loss per Share
Nine
months ended
Nine-Month
Period HK$'000
30th September 2017 HK$'000
Loss attributable to ordinary equity holders of the Company used in calculating basic loss per Share
(6,940)
(12,213)
(c) Weighted average number of Shares used as the denominator
Weighted average number of Shares used as the denominator in calculating basic loss per Share (thousands)
614,435
614,385
(d)Information concerning the classification of Options
Options granted to Directors, employees and a consultant under the Scheme were considered to be potential Shares. They would have been included in the determination of diluted loss per Share to the extent to which they were dilutive. Options were not included in the determination of basic loss per Share.
The 51,376,000 Options granted on 26th September 2016 were not included in the calculation of diluted loss per Share because they were anti-dilutive for the Nine-Month Period. These Options could potentially dilute basic loss per Share in the future.
3 Dividends
The Directors do not recommend payment of an interim dividend for the Nine-Month Period (nine months ended 30th September 2017: nil).
4 Reserves
2017: Available- | |||||||||
for-sale investments | |||||||||
/ 2018: Fair value | Retained | ||||||||
Capital | through other | Foreign | earnings/ | ||||||
Contributed | Share-based | redemption | comprehensive | Merger | Statutory | currency | Total | (accumulated | |
surplus | payments | reserve | income reserve | reserve | reserve | translation | other reserves | losses) | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
As at 1st January 2017 | 97,676 | 7,442 | 702 | 12,170 | 35,549 | 49 | 2,913 | 156,501 | 21,042 |
Revaluation loss | - | - | - | (37) | - | - | - | (37) | - |
Currency translation differences | - | - | - | - | - | - | (46) | (46) | - |
Dividend relating to 2016 | - | - | - | - | - | - | - | - | (6,144) |
Loss for the nine months | |||||||||
ended 30th September 2017 | - | - | - | - | - | - | - | - | (12,213) |
As at 30th September 2017 | 97,676 | 7,442 | 702 | 12,133 | 35,549 | 49 | 2,867 | 156,418 | 2,685 |
As at 1st January 2018 | 97,676 | 7,442 | 702 | 489 | 35,549 | 49 | 2,914 | 144,821 | 10,071 |
Revaluation loss | - | - | - | (1,847) | - | - | - | (1,847) | - |
Currency translation differences | - | - | - | - | - | - | 150 | 150 | - |
Dividend relating to 2017 | - | - | - | - | - | - | - | - | (6,144) |
Loss for the Nine-Month Period | - | - | - | - | - | - | - | - | (6,940) |
As at 30th September 2018 | 97,676 | 7,442 | 702 | (1,358) | 35,549 | 49 | 3,064 | 143,124 | (3,013) |
- 4 - |
BUSINESS REVIEW
Business in Macao, Hong Kong and Mainland China
In Macao, with gaming remains as a core economic pillar, business generated from different gaming operators continues to be one of the main revenue drivers of the Group. As per the official statistics from the Government of Macao, total gross revenue generated from different gaming activities for the Nine-Month Period reached HK$217,529,000,000. Although total gross revenue represented a year-on-year growth of 15.86%, it trailed behind the year-on-year growth of 18.86% for the initial six months of 2018. While the gaming sector continued to show visible signs of growth potential, given the recent global trade tensions, currency volatility and stock market fluctuations, the Group has witnessed cautions over the near term capital expenditures momentum and spending pattern among its customers, in particular gaming operators and telecommunications service providers.
Due to market uncertainties and limited number of gaming operators still constructing new and mega-sized gaming infrastructure, during the Three-Month Period, the Group witnessed a visibly slowdown in securing new contracts in Macao, Hong Kong and Mainland China. In addition, two other observations were noted, including tougher price negotiations and decline in the higher-margin service contracts (involving installation and system support services) awarded, as customers, especially gaming operators, rearranged their internal human resources to perform such services. Nevertheless, "Vodatel" brand of companies in Macao, Hong Kong and Mainland China were able to add approximately HK$57,000,000 to its order book during the Three-Month Period, though feel short the total value of contracts of HK$85,000,000 and HK$91,000,000 registered for first quarter and second quarter of 2018 respectively. The contracts secured during the Three-Month Period included a handful of work orders from different gaming operators to support their customarily upgrades and renovations of their gaming floors, and expansion works to the data centres of Internet value-added services providers in Mainland China, different telecommunications service providers in Hong Kong and Mainland China and data centre providers in Mainland China. Worth noting was new orders in the areas of DWDM infrastructure and SD-WAN infrastructure which VHL commenced carrying and promotion during the third quarter of 2017. During the Three-Month Period, VHL secured over HK$2,500,000 worth of contract from a regional telecommunications service provider in Mainland China to deploy DWDM infrastructure and secured multiple contracts, worth HK$4,000,000, from a leading provider of content delivery services in the Asia Pacific Region to deploy SD-WAN infrastructure.
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Vodatel Networks Holdings Limited published this content on 12 November 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 12 November 2018 11:18:07 UTC