Mass Financial Corp. Reports Results for the First Half 2009


    
    - Net asset value per share exceeds $9 -





    
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<p><location>HONG KONG</location>, <chron>Sept. 30</chron> /CNW/ -- Mass Financial Corp. ("MFC") (<location>Vienna</location> Stock Exchange symbol: MASS) today reported its financial results for the six months ended <chron>June 30, 2009</chron>.  All figures are in U.S. dollars and earnings per share amounts are on a diluted basis.</p>
<p/>
<p>For the six months ended <chron>June 30, 2009</chron>, MFC reported total revenues of <money>$212.5 million</money> with net income of <money>$60.5 million</money> or <money>$2.42</money> per share, compared to total revenues of <money>$305.9 million</money> with net income of <money>$28.2 million</money> or <money>$1.12</money> per share for the first six months of 2008.</p>
<p/>
<p>At <chron>June 30, 2009</chron>, MFC had <money>$257.2 million</money> in cash and securities, our current ratio was 2.10, and the long-term debt-to-shareholders' equity ratio was 0.25.   Equity per common share increased to <money>$9.63</money>, a 263 percent increase in three years.</p>
<p/>
<p>Revenue for the six months ended <chron>June 30, 2009</chron> declined from the six months ended <chron>December 31, 2008</chron> by 27 percent.  This was primarily due to the withdrawal of our commodities and trade finance services from certain countries because of their high counter-party risks which were caused by the global economic crises.  In addition, we have also cancelled certain product lines and ended relations with some of our customers.</p>
<p/>
<p>MFC's current goal is to preserve capital and liquidity for the future.  Looking back, we may be criticized for cutting back too much by this decision to withdraw from certain markets and cancel some product lines. However, MFC is healthier, as we are not operating with any belief that our markets are returning to levels prior to the economic crisis in the short-term.</p>
<p/>
<p>On a positive note, since April our commodity and finance related business revenues have increased 41 percent.  Overall this business will be less in 2009 but margins should increase as we are focusing on products with better margins and less counter-party risks.</p>
<p/>
<p><person>President Michael Smith</person> commented, "We have completed the restructuring of our debt to our former parent company. Our medical business is growing, and our production and refining of various nonferrous metals will see satisfactory earnings in 2009.</p>
<p/>
<p>"We cannot predict how we will do for the full year 2009. But we believe we can increase our net asset value per share.   Net asset value is the way we value our company.  We do not believe a price earning multiple is relevant.</p>
<p/>
<p>"With a weakened global economy, valuations of several projects, what look to be complementary have become closer to more sensible levels and start to be at a real discount to net tangible asset value. We will, however, maintain our level of discipline in assessing the related risks."</p>
<p/>
<p><person>Mr. Smith</person> continued, "With this second half of 2009, MFC is now in its fourth year since becoming an independent company. In trying to create market awareness and liquidity for our shareholders, we took steps to complete the process of listing our common shares on the <location>Vienna</location> Stock Exchange. Unfortunately, this has not been successful in enhancing shareholder value.  We are now working on another listing and methods of creating greater market value for our shareholders.</p>
<p/>
<p>"The effectiveness of our strategy demands constant review and attention in order for MFC to reflect our commitment to developing wealth for our shareholders."</p>
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    About the Company:

    
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<p>Mass Financial Corp's merchant banking business encompasses a broad spectrum of activities related to the integrated combination of banking, trading of commodities and natural resources, financing of commercial trade, and proprietary investing.  To obtain further information, please visit our website at <a href="http://www.massfinancialcorp.com">http://www.massfinancialcorp.com</a>.</p>
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    North America Contact: Rene Randall
    Telephone: 1 (604) 408 8538 Email: rrandall@bmgmt.com
    
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                               MASS FINANCIAL CORP.
                          CONSOLIDATED BALANCE SHEETS
                      June 30, 2009 and December 31, 2008
                           (U.S. Dollars in Thousands)
                                    (unaudited)
                                                             2009       2008
                                                             ----       ----
    ASSETS
    
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<p> </p>
<p>Current Assets</p>
<p> </p>
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       Cash and cash equivalents                           $244,752   $201,622
       Securities                                            12,448      4,493
       Restricted cash                                          334     16,054
       Loans                                                  8,040      1,357
       Trade and other receivables                           15,218     30,315
       Inventories                                            6,584     20,075
       Properties for sale                                   13,470     13,374
       Tax receivables                                        4,930      2,237
       Prepaid and other                                     16,379      6,934
                                                             ------      -----
             Total current assets                           322,155    296,461
    
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<p> </p>
<p>Non-current Assets</p>
<p> </p>
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       Restricted cash                                           28         28
       Securities                                             9,141      9,150
       Securities, restricted                                 9,357      9,357
       Loans                                                  5,371          -
       Receivables                                              302        286
       Property, plant and equipment                          3,670      2,806
       Investment property                                   40,245     39,744
       Goodwill                                               4,548      4,513
       Deferred tax assets                                    2,155      2,149
       Equity method investments                              4,950      5,421
                                                              -----      -----
             Total non-current assets                        79,767     73,454
                                                             ------     ------
    
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                                                           $401,922   $369,915
                                                           ========   ========
    
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                                   MASS FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET (con't)
                          June 30, 2009 and December 31, 2008
                              (U.S. Dollars in Thousands)
                                      (unaudited)
    
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                                                             2009      2008
                                                             ----      ----
    
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<p> </p>
<p>LIABILITIES</p>
<p> </p>
<p>Current Liabilities</p>
<p> </p>
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       Financial liabilities, short-term bank loans        $107,066   $65,067
       Trade and other payables and accrued expenses         32,624    39,040
       Accrued dividend on preferred shares                       -     9,265
       Provisions                                               497       487
       Income tax liabilities                                   673     1,134
       Long-term debt, current portion                       12,621     2,770
                                                             ------     -----
             Total current liabilities                      153,481   117,763
    
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<p>Long-term liabilities</p>
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       Long-term debt, less current portion                  45,233    52,634
       Financial liabilities                                  9,357     9,357
       Deferred tax liabilities                               1,164     1,030
       Due to former parent company and former
        subsidiaries                                              -    71,506
       Notes payable                                         11,265         -
       Other non-current liabilities                            120        91
                                                                ---        --
             Total long-term liabilities                     67,139   134,618
                                                             ------   -------
    
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<p> </p>
<p>                Total Liabilities                       220,620   252,381</p>
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<p> </p>
<p>EQUITY</p>
<p> </p>
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    Shareholders' equity
       Common stock, net                                     18,090    18,090
       Equity component of convertible debt                   1,000     1,000
       Other reserves                                        (8,417)  (11,656)
       Retained earnings                                    168,907   108,576
                                                            -------   -------
       Total shareholders' equity                           179,580   116,010
    
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    Minority interests                                        1,722     1,524
                                                              -----     -----
       Total Equity                                         181,302   117,534
                                                            -------   -------
                                                           $401,922  $369,915
                                                           ========  ========
    
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                             MASS FINANCIAL CORP.
                     CONSOLIDATED STATEMENTS OF INCOME
                For Six Months Ended June 30, 2009 and 2008
             (U.S. Dollars in Thousands, Except per Share Amounts)
                                 (unaudited)
                                                           2009        2008
                                                           ----        ----
    
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    Revenues from sales, services and other              $210,599    $303,699
    Share of the results of associates and joint
     ventures                                               1,898       2,181
                                                            -----       -----
       Total revenues                                     212,497     305,880
    
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<p> </p>
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    Expenses
       Cost of sales                                      124,577     250,438
       General and administrative                          14,884      14,230
       Interest                                             4,920       9,075
       Other                                                3,278       3,278
                                                            -----       -----
                                                          147,659     277,021
                                                          -------     -------
    
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<p> </p>
<p>Operating profit                                       64,838      28,859</p>
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    Other items:
       Currency transaction gain (loss)                    (3,836)      1,550
       Goodwill impairment                                      -      (1,121)
                                                              ---      ------
    
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    Profit before income taxes                             61,002      29,288
    Provision for income taxes                               (482)     (1,057)
                                                             ----      ------
    
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    Profit after taxes                                    $60,520     $28,231
                                                          =======     =======
    
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    Attributable to:
    Shareholders of Mass Financial Corp.                  $60,331     $25,644
    Minority interests                                        189       2,587
                                                              ---       -----
    
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                                                          $60,520     $28,231
                                                          =======     =======
    
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    Earnings per share
       - basic                                              $3.24       $1.50
                                                            =====       =====
       - diluted                                            $2.42       $1.12
                                                            =====       =====
    
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    Number of weighted average shares
     outstanding, basic                                18,639,221  17,044,229
    Number of weighted average shares
     outstanding, diluted                              24,992,231  23,010,816





    
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<p> </p>
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                              MASS FINANCIAL CORP.
                              FINANCIAL HIGHLIGHTS
           (U.S. Dollars in Thousands except per Share Data and Ratios)
                                   (unaudited)
    
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                          June 30,          December 31,
                            2009      2008      2007      2006      2005
                          -------     ----      ----      ----      ----
    
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<p> </p>
<p>Cash                 <money>$244,752</money>  <money>$201,622</money>  <money>$183,903</money>   <money>$99,078</money>     <money>$26,185</money></p>
<p> </p>
<p>Securities             12,448     4,493    45,984    36,787       2,880</p>
<p> </p>
<p>Current Assets        322,155   296,461   315,256   195,462      82,599</p>
<p> </p>
<p>Total Assets          401,922   369,915   355,576   230,437     109,255</p>
<p> </p>
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    Current
     Liabilities          153,481   117,763   143,324    91,280      39,421
    
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<p>Working Capital       168,674   178,698   171,932   104,182      43,178</p>
<p> </p>
<p>Current Ratio            2.10      2.52      2.20      2.14        2.10</p>
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    Long-Term Debt,
     less current
     portion               45,233    52,634    28,068     4,710         869
    
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    Long-Term
     Debt-to-Equity
     Ratio                   0.25      0.45      0.34      0.10           -(3)
    
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    Debt - Preferred
     Shares                     -    71,506    91,956    77,976      67,058(1)
    
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<p>Total Liabilities     220,620   252,381   272,859   183,491     107,348</p>
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    Shareholders'
     Equity               179,580   116,010    81,583    45,131           1(2)
    
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    Return on
     Shareholders'
     Equity                    -(4)    28.5%    107.4%        -(3)        -(3)
    
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    Equity Per Common
     Share                   9.63      6.22      4.79      2.65           -(3)
    
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    (1) Opening balance of 2005, preferred shares are denominated in
        Canadian dollars
    
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    (2) The net assets or value purchased in 2005 was with the total issuance
        of the debt - preferred shares.  An independent valuation of the
        common shares at the time of our spin-off was in the range of $0.50
        to $0.76 per share, approximately US$9 million.  At that time
        valuation treated the common shares as a warrant value on the capital
        that may be made on the preferred shares in the future in excess of
        the stated dividend.
    
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<p> </p>
<p>(3) Not  applicable</p>
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    (4) 6-month period, not comparable









    

For further information: For further information: Rene Randall, +1-604-408-8538, rrandall@bmgmt.com, for Mass Financial Corp. Web Site: http://www.massfinancialcorp.com

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MASS FINANCIAL CORP.

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