Mass Financial Corp. Reports Results for the Year Ended 2009


    
    - Book Value Increases to $9.72 Per Common Share -






    
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<p><span class="xn-location">HONG KONG</span>, <span class="xn-chron">June 1</span> /CNW/ -- Mass Financial Corp. ("MFC") (<span class="xn-location">Vienna</span> Stock Exchange symbol: MASS) today reported its financial results for the year ended <span class="xn-chron">December 31, 2009</span>.  All figures are in U.S. dollars and earnings per share amounts are on a diluted basis.</p>
<p/>
<p>For the year ended <span class="xn-chron">December 31, 2009</span>, MFC reported total revenues of <span class="xn-money">$406.4 million</span> with net income attributable to our shareholders of <span class="xn-money">$75.2 million</span> or <span class="xn-money">$2.70</span> per share, compared to total revenues of <span class="xn-money">$598.8 million</span> with net income of <span class="xn-money">$23.3 million</span> or <span class="xn-money">$0.91</span> per share for the year of 2008.</p>
<p/>
<p>At <span class="xn-chron">December 31, 2009</span>, MFC had <span class="xn-money">$346.8 million</span> in cash and securities, its current ratio was 2.14, and the long-term debt-to-shareholders' equity ratio was 0.28. Equity per common share increased to <span class="xn-money">$9.72</span> (<span class="xn-money">$10.55</span> a share before our adjustment for our stock dividend paid in December 2009). For 2009 MFC's net income represented a 65% return on equity as compared to S&P 500's return of 26%.</p>
<p/>
<p>MFC's book value per share as of <span class="xn-chron">December 31, 2009</span> has increased by 300% from our first full year in 2006. We believe this is the best measurement of our results and performance and that a price earnings multiple is not relevant measurement of MFC's performance.</p>
<p> </p>
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           MFC's book value per share as of December 31, for the dates
                            indicted is set out below
     2009                 2008            2007            2006            2005
     ----                 ----            ----            ----            ----
         $9.72           $5.71           $4.39           $2.43        Nil
    
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             Note: 2006 to 2008 amounts are adjusted for the effect of our
              stock dividend paid in December 2009





    
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<p>Our revenues for the year ended <span class="xn-chron">December 31, 2009</span> declined from 2008, primarily due to reducing our risk exposure by scaling back our commodity and trade finance business in countries we deemed higher-risk. We also reduced our product lines and customer base to reflect global macro economic conditions.</p>
<p/>
<p><span class="xn-person">President Michael Smith</span> commented, "We are not pleased with our overall performance in 2009.  Progress on certain projects proved elusive and we believe we are capable of better execution. We remain focused on preserving our capital and liquidity. MFC is healthier, as we are not currently operating with a belief that our markets will return to prior levels in the short-term.</p>
<p/>
<p>In <span class="xn-chron">December 2009</span> we issued a stock dividend to shareholders of one new common share for each 11 shares owned."</p>
<p/>
<p><span class="xn-person">Mr. Smith</span> continued, "Our strategy demands constant review and attention to ensure MFC reflects our commitment to building shareholder value. This year, we are determined to:</p>
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    --  Become more disciplined and focused more specific business lines
    --  Create value in areas where we have specialized knowledge
    --  Direct more energy and effort to the Asian markets
    --  Seek greater asset exposure in Asia
    --  Complete another listing for our common shares
    --  Increase the number and industry experience of our directors."

    
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<p><span class="xn-person">Mr. Smith</span> concluded, "Our main objective remains simply to do good business. Our liquidity allows us to take advantage of emerging opportunities. These are interesting times for business opportunity, but we must maintain our financial discipline. Now is the time to focus on projects in our areas of our special knowledge while carefully assessing the risks.</p>
<p/>
<p>Our goal for 2010 and 2011 will be to leverage our foundation of resources and strategic network of operating businesses to pursue international growth opportunities. We will continue to manage our business for the long term."</p>
<p/>
<p>Shareholders are encouraged to read the entire Annual Report, which is available on the Company's website for a greater understanding of MFC.</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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    Disclaimer for Forward-Looking Information

    
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<p>Certain statements in this news release are forward-looking statements, which reflect our management's expectations regarding our future growth, results of operations, performance, and business prospects and opportunities.  Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future.  Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements.  No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits we will obtain from them.  These forward-looking statements reflect management's current views, are based on certain assumptions, and speak only as of <span class="xn-chron">December 31, 2009</span>.  These assumptions, which include management's current expectations, estimates and assumptions about certain projects and the markets we operate in, the global economic environment, interest rates, exchange rates and our ability to attract and retain customers and to manage the company's assets and operating costs, may prove to be incorrect. Important factors and risks that might cause our actual results to differ materially from the results contemplated by these forward-looking statements, including those that are contained in the section titled "Risk Factors," are included in our annual report for 2009 and investors are urged to read them in there entirety.  Investors are also cautioned not to place undue reliance on these forward-looking statements.  No forward-looking statement is a guarantee of future results.  We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.</p>
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    North America Contact: Rene Randall
    Telephone: 1 (604) 408 8538 Email: rrandall@bmgmt.com


    -FINANCIAL TABLES FOLLOW-



    
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<p> </p>
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                MASS FINANCIAL CORP.
             CONSOLIDATED BALANCE SHEETS
             December 31, 2009 and 2008
             (U.S. Dollars in Thousands)
    
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                                           2009                 2008
                                           ----                 ----
    
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<p> </p>
<p>ASSETS</p>
<p> </p>
<p>Current Assets</p>
<p> </p>
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       Cash and cash
        equivalents                    $329,554             $201,622
       Securities                        17,196                4,493
       Restricted cash                    2,466               16,054
       Loan receivables                     111                1,357
       Trade and other
        receivables                      19,778               30,315
       Inventories                       46,197               20,075
       Properties for sale               13,616               13,374
       Tax receivables                    3,138                2,237
       Prepaid and other                  5,211                6,934
                                          -----                -----
             Total current assets       437,267              296,461
    
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<p> </p>
<p>Non-current Assets</p>
<p> </p>
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       Restricted cash                       29                   28
       Securities                         5,880                9,150
       Securities,
        restricted                        9,357                9,357
       Receivables                            -                  286
       Property, plant and
        equipment                         5,460                2,806
       Investment property               41,290               39,744
       Goodwill                           5,657                4,513
       Deferred tax assets                3,317                2,149
       Equity method
        investments                       4,074                5,421
                                          -----                -----
             Total non-current
              assets                     75,064               73,454
                                         ------               ------
    
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<p> </p>
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                                       $512,331             $369,915
                                       ========             ========




    
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<p> </p>
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                       MASS FINANCIAL CORP.
               CONSOLIDATED BALANCE SHEETS (cont'd)
                    December 31, 2009 and 2008
                   (U.S. Dollars in Thousands)
    
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<p> </p>
<p> </p>
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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                         $141,016              $65,067
       Trade and other payables and
        accrued expenses                          45,714               39,040
       Accrued dividend on preferred
        shares                                         -                9,265
       Provisions                                    959                  487
       Income tax liabilities                        933                1,134
       Long-term debt, current portion            16,071                2,770
                                                  ------                -----
             Total current liabilities           204,693              117,763
    
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<p> </p>
<p>Long-term liabilities</p>
<p> </p>
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       Long-term debt, less current
        portion                                   58,097               52,634
       Financial liabilities                       9,357                9,357
       Deferred tax liabilities                    1,367                1,030
       Due to prior owner and former
        subsidiaries                                   -               71,506
       Note payable                                1,672                    -
       Other non-current liabilities              25,829                   91
                                                  ------                  ---
             Total long-term liabilities          96,322              134,618
                                                  ------              -------
    
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<p> </p>
<p>                Total Liabilities            301,015              252,381</p>
<p> </p>
<p> </p>
<p>EQUITY</p>
<p> </p>
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    Shareholders' equity
       Common stock, net                          46,132               18,090
       Equity component of convertible
        debt                                         800                1,000
       Other reserves                             (3,073)             (11,656)
       Retained earnings                         166,461              108,576
                                                 -------              -------
             Total shareholders' equity          210,320              116,010
    
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<p> </p>
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    Non-controlling interests                        996                1,524
                                                     ---                -----
                    Total Equity                 211,316              117,534
                                                 -------              -------
                                                $512,331             $369,915
                                                ========             ========







    
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<p> </p>
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                         MASS FINANCIAL CORP.
                  CONSOLIDATED STATEMENTS OF INCOME
            For the Years Ended December 31, 2009 and 2008
        (U.S. Dollars in Thousands, Except per Share Amounts)
    
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<p> </p>
<p> </p>
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                                                   2009                2008
                                                   ----                ----
    
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<p> </p>
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    Revenues from sales, services and
     other                                     $402,786            $594,545
    Share of the results of associates
     and joint ventures                           3,619               4,263
                                                  -----               -----
       Total revenues                           406,405             598,808
    Expenses
       Cost of sales                            273,793             494,391
       General and administrative                30,631              28,216
       Interest                                  13,350              15,464
       Dividend on preferred shares
        classified as liabilities                     -               3,744
      Other                                       7,108               8,267
                                                  -----               -----
                                                324,882             550,082
                                                -------             -------
    
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<p> </p>
<p>Operating profit                             81,523              48,726</p>
<p> </p>
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    Other items:
       Currency transaction loss                 (6,148)            (18,151)
       Goodwill impairment                            -              (5,235)
                                                    ---              ------
    
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<p> </p>
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    Profit before income taxes                   75,375              25,340
    Recovery of income taxes                         43               1,272
                                                    ---               -----
    
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    Net income
                                                $75,418             $26,612
                                                =======             =======
    
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<p> </p>
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    Attributable to:
    Shareholders of Mass Financial Corp.        $75,179             $23,288
    Non-controlling interests                       239               3,324
                                                    ---               -----
    
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                                                $75,418             $26,612
                                                =======             =======
    
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<p> </p>
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    Earnings per share
       - basic                                    $3.69               $1.20
                                                  =====               =====
       - diluted                                  $2.70               $0.91
                                                  =====               =====
    
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<p> </p>
<p> </p>
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    Number of weighted average shares
     outstanding, basic                      20,353,302          19,468,454
    Number of weighted average shares
     outstanding, diluted                    28,089,650          25,977,458



    
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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)
    
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<p> </p>
<p> </p>
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                                                December 31,
                                2009      2008        2007      2006   2005(5)
                                ----      ----        ----      ----    ------
    Cash                    $329,554  $201,622    $183,903   $99,078   $26,185
    Securities                17,196     4,493      45,984    36,787     2,880
    Current Assets           437,267   296,461     315,256   195,462    82,599
    Total Assets             512,331   369,915     355,576   230,437   109,255
    Current Liabilities      204,693   117,763     143,324    91,280    39,421
    Working Capital          232,574   178,698     171,932   104,182    43,178
    Current Ratio               2.14      2.52        2.20      2.14      2.10
    Long-Term Debt,  less
     current portion          58,097    52,634      28,068     4,710       869
    Long-Term Debt-to-
     Equity Ratio               0.28      0.45        0.34   0.10(3)     - (3)
    Debt - Preferred Shares        -    71,506      91,956    77,976 67,058(1)
    Total Liabilities        301,015   252,381     272,859   183,491   107,348
    Shareholders' Equity     210,320   116,010      81,583    45,131      1(2)
    Return on Shareholders'
     Equity                       65%       29%      107.4%    - (3)     - (3)
    Equity Per Common Share     9.72   5.71(4)     4.39(4)   2.43(4)     - (3)
    Dividend (in stock)            9%        -           -         -         -
    
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    (1) Opening balance of 2005, preferred shares are denominated in
    Canadian dollars.
    
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<p> </p>
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    (2) The net assets acquired in 2005 were wholly paid for through the
    issuance of debt in the form of 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, or approximately US$9 million
    in aggregate.  At that time the valuation treated the common shares
    as having a warrant value on the future capital that may be made
    earned on the preferred shares in excess of their stated dividend.
    
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<p> </p>
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    (3) 2006 was the first year of common shareholders' equity as there
    was no equity attributable to such shares as of December 31, 2005.
    
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<p> </p>
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    (4) Adjusted for the effect of the stock dividend declared in
    December 2009.
    
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<p> </p>
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    (5) Unaudited.







    

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

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