Mass Financial Corp. Reports Results for the Year 2008



    
    - Return on Shareholders' Equity 28.5% -

    
    HONG KONG, May 22 /CNW/ -- Mass Financial Corp. ("MFC") (Vienna Stock
Exchange Symbol: MASS) (Pink Sheets:   MFCAF) today reported its financial
results for the year ended December 31, 2008.  All figures are in U.S.
dollars.

    For the year ended December 31, 2008, MFC reported total revenues of
$598.8 million with net income attributable to shareholders of $23.3 million
or $0.99 per diluted share, compared to total revenues of $543.9 million with
net income attributable to shareholders of $48.5 million or $2.09 per diluted
share for the year 2007.

    At December 31, 2008, the Company had $206.1 million in cash and
securities, our working capital ratio was 2.52, and the long-term
debt-to-shareholders' equity ratio was 0.45.  Return on shareholders' equity
was 28.5 percent.  In comparison, the S&P 500 returned negative 38 percent in
this period.

    President Michael Smith, commented, "Our commodities business provided a
solid foundation that we used to effectively pursue international
opportunities and enhanced the value of our assets.

    Proprietary investing is an integral part of our financial services
business.  Through such investments, we are able to more accurately quantify
potential intrinsic value and fine-tune our strategies for realizing value.

    With the downturn in the global economy, opportunities are becoming more
visible.  Valuations of several complementary projects have been coming closer
to more sensible levels.
    

    In 2008, we made several mistakes that affected our performance.

    --  We incurred losses in currencies relative to the US dollar in the
        amount of $18.2 million.  These losses primarily began in early
        October. Failing to react quickly enough in the face of the market's
        turmoil, we did not move our currency positions to US dollars until
the
        first week of November. After analyzing this event we have concluded
        that our risk management system and general level of efficiency with
        regards to our investment portfolio must be improved. Our basket of
        currencies suffered in the midst of record-high volatility; our
        allocation has now been adjusted.

    --  We wrote off goodwill and investments in the amount of $10.2 million.
        To be prudent, we have made an impairment to cover write-offs.  In
        these changing times, it is important that we look very carefully at
        every asset.


    I would like to update you on what MFC has completed in 2009.

    --  In an effort to increase awareness of our shares, we have in 2009
        obtained a listing for our common shares on the Vienna Stock Exchange.
        In the future we will seek additional ways to create awareness and
        market liquidity.
    --  During 2009 we have entered into a partnership to acquire and expand a
        manufacturer of specialty medical vehicles located in Europe whose
        products are sold on a global basis.  In the future, we will look to
        finance and rent these vehicles to cities and towns.
    --  Since the 2008 year-end we have also purchased the assets of 4-D
        Neuroimaging. This complements our medical sales and services business
        and should now substantially increase our magnetoencephalography (MEG)
        brain imaging systems business. Clients for this business operate
        specialized epilepsy surgery centers, neurosurgical hospitals and
        neuroscience research centers.  The current markets for this business
        are North America, Europe and China.  Medical applications of this
        technology include the localization of epileptic spikes prior to
        epilepsy surgery and brain mapping prior to tumor surgery.

    --  Under long-term liabilities on our 2008 balance sheet, there is a debt
        of US$71.5 million (face value in Canadian dollars).  Subsequent to
        December 31, 2008, we settled this debt through a series of
        transactions, and will report a satisfactory gain in US dollars.


    
    We are, however, pleased that we increased our shareholders value per
share by 30 percent to $6.22. The continuing effectiveness of our strategy
demands constant review and attention in order for it to reflect our
commitment to developing wealth for our shareholders. Shareholders are
encouraged to read the entire Annual Report for a greater understanding of
Mass. The Annual Report is also available on the Company's website."
    

    About the Company:

    
    Mass Financial Corp.'s merchant banking business encompasses a broad
spectrum of activities related to the integrated combination of banking,
commodities, financing of commercial trade, and proprietary investing.  To
obtain further information, please visit our website at
http://www.massfinancialcorp.com


    
    North America Contact: Rene Randall
    Telephone: 1 (604) 408 8538 Email: rrandall@bmgmt.com
    


    - AUDITED FINANCIAL TABLES FOLLOW -



    
                              MASS FINANCIAL CORP.
                          CONSOLIDATED BALANCE SHEETS
                          December 31, 2008 and 2007
                          (U.S. Dollars in Thousands)
    

    
                                                        2008      2007
                                                        ----      ----
    ASSETS
    

    Current Assets

    
       Cash and cash equivalents                      $201,622  $183,903
       Securities                                        4,493    45,984
       Restricted cash                                  16,054         0
       Loans                                             1,357     1,992
       Trade and other receivables                      30,315    37,053
       Inventories                                      20,075    43,907
       Properties for sale                              13,374         0
       Tax receivables                                   2,237     1,051
       Prepaid and other                                 6,934     1,366
             Total current assets                      296,461   315,256
    

    Non-current Assets

    
       Restricted cash                                      28         0
       Securities                                        9,150     5,989
       Securities, restricted                            9,357     9,357
       Loans                                                 0    11,869
       Receivables                                         286       972
       Property, plant and equipment                     2,806       992
       Investment property                              39,744         0
       Goodwill                                          4,513     4,754
       Deferred tax assets                               2,149       368
       Equity method investments                         5,421     6,019
             Total non-current assets                   73,454    40,320
    

    
                                                      $369,915  $355,576

    


    
                              MASS FINANCIAL CORP.
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 2008 and 2007
                          (U.S. Dollars in Thousands)
    

    
                                                          2008      2007
                                                          ----      ----
    

    LIABILITIES

    Current Liabilities

    
       Financial liabilities, note payable               $1,112         $0
       Financial liabilities, short-term bank loans      65,067     76,204
       Trade and other payables and accrued expenses     37,928     52,636
       Accrued dividend on preferred shares               9,265      4,080
       Provisions                                           487          0
       Income tax liabilities                             1,134      1,423
       Long-term debt, current portion                    2,770      8,981
             Total current liabilities                  117,763    143,324
    

    Long-term liabilities

    
       Long-term debt, less current portion              52,634     28,068
       Financial liabilities                              9,357      9,357
       Deferred tax liabilities                           1,030        154
       Due to former parent company and former
        subsidiaries                                     71,506     91,956
       Other non-current liabilities                         91          0
             Total long-term liabilities                134,618    129,535
    

    Total Liabilities                   252,381    272,859


    EQUITY

    
    Shareholders' equity
       Common stock, net                                 18,090      2,591
       Equity component of convertible debt               1,000      1,000
       Other reserves                                   (11,656)   (11,592)
       Retained earnings                                108,576     89,584
       Total shareholders' equity                       116,010     81,583
    Minority interests                                    1,524      1,134
       Total Equity                                     117,534     82,717
    

    
                                                       $369,915   $355,576

    


    
                              MASS FINANCIAL CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                For the Years Ended December 31, 2008 and 2007
              (U.S. Dollars in Thousands, Except per Share Data)
    

    
                                                        2008        2007
                                                        ----        ----
    


    
    Revenues from sales, services and other           $594,545    $540,483
    Share of the results of associates and joint
     ventures                                            4,263       3,465
       Total revenues                                  598,808     543,948
    

    
    Expenses
       Cost of sales                                   494,391     454,051
       General and administrative                       28,216      21,554
       Interest                                         15,464      12,034
       Dividend on preferred shares classified as
        liabilities                                      3,744       3,853
       Other                                             8,267       2,880
                                                       550,082     494,372
    

    Operating profit                                    48,726      49,576

    
    Other items:
       Currency transaction gain (loss)                (18,151)      2,212
       Goodwill impairment                              (5,235)     (1,930)
    

    
    Profit before income taxes                          25,340      49,858
    Recovery of (provision for) income taxes             1,272        (824)
    

    Profit after taxes                                 $26,612     $49,034


    
    Profit attributable to:
    Shareholders of Mass Financial Corp.               $23,288     $48,492
    Minority interests                                   3,324         542
    

    $26,612     $49,034

    
    Earnings per share
       - basic                                           $1.30       $2.85
       - diluted                                         $0.99       $2.09
    


    
    Number of weighted average shares outstanding,
     basic                                          17,846,083  17,044,229
    Number of weighted average shares outstanding,
     diluted                                        23,812,670  23,309,893

    

    
    MASS FINANCIAL CORP.
    Financial Highlights December 31, 2008
    (U.S. Dollars in Thousands except per Share Data and Ratios)
    

    
                                   2008      2007        2006         2005
                                                                   (Unaudited)
    

    Cash                         $201,622  $183,903     $99,078     $26,185

    Securities                      4,493    45,984      36,787       2,880

    
    Current
     Assets                       296,461   315,256     195,462      82,599
    

    Total Assets                  369,915   355,576     230,437     109,255

    Current Liabilities           117,763   143,324      91,280      39,421

    Working Capital               178,698   171,932     104,182      43,178

    Current Ratio                    2.52      2.20        2.14        2.10

    
    Long-Term Debt, less
     Current portion               52,634    28,068       4,710         869
    

    
    Long-Term
     Debt-to-Shareholders'
     Equity                          0.45      0.34        0.10          - (3)
    

    
    Debt - Due to former
     parent company and
     former subsidiaries           71,506    91,956      77,976      67,058(1)
    

    Total Liabilities             252,381   272,859     183,491     107,348

    Shareholders' Equity          116,010    81,583      45,131          
1(2)

    
    Return on
     Shareholders' Equity           28.5%    107.4%         - (3)        - (3)
    

    Equity Per Common Share          6.22      4.79        2.65          -
(3)

    (1) Opening balance of 2005, amounts are denominated in Canadian dollars

    
    (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.
    

    
    (3) Not available

    

    
    MASS FINANCIAL CORP.
    The Group's total revenues comprised:
    (U.S. Dollars in Thousands except Percentages)
    

    
                                           2008                2007
                                           ----                ----
                                    Amount       %      Amount      %
    

    Commodities                    $294,404    49.2    $206,726    38.0

    Trade and financial services    229,410    38.3     274,867    50.5

    Interest and dividends           19,443     3.2      14,579     2.7

    
    Securities and investment
     property                        37,863     6.3      37,223     6.8
    

    Equity income                     4,263     0.7       3,465     0.6

    Other                            13,425     2.3       7,088     1.4

    
                                   $598,808  100.0%    $543,948  100.0%




    




For further information:

For further information: North America, 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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