Weak First Quarter Expected to be Offset by Strong Orders for Balance of Year
Listing: TSX Venture Exchange
LINCOLN, England, Feb. 20, 2013 /CNW/ - Dynex Power Inc., a leading, high power semiconductor company, today issued guidance on its outlook for 2013 and also announced that it has received significant new orders from a major customer.
In the President's Letter and the Management Discussion and Analysis issued with the Financial Statements for the quarter ended September 30th, 2012, management indicated that they expected revenue to be slightly higher in the fourth quarter of 2012 with net profit in the fourth quarter at a similar level to that reported in the third quarter. These forecasts remain unaltered.
In a press release dated November 12th, 2012, management indicated that it was cautious about the outlook for the first quarter of 2013 but remained confident that there would be annual growth in revenue in 2013 compared to 2012.
Management now believes that revenue in the first quarter of 2013 will be significantly lower than in recent quarters. As a result, the Company may operate below break-even. The revenue reduction reflects the slow recovery in global markets, a temporary decline in orders from China and a delay to orders for major contracts in Europe. Nevertheless, management continues to be confident that the Company will achieve revenue growth in 2013 compared to 2012 and that net profit will be similar to or slightly ahead of the figure reported in 2012. This confidence is supported by recent orders received.
The Company has received a series of orders from Alstom Grid UK Ltd covering the supply of semiconductor devices and power assemblies for the South West High Voltage Direct Current (HVDC) converter stations project in Sweden. Deliveries will commence in the second quarter of 2013 and last for nearly 12 months. Taken together, the orders cover the supply of bipolar discrete devices, IGBT modules and power assemblies for a total value of $7.4 million (£4.6 million).
Dr. Paul Taylor, President and Chief Executive Officer commented, "We are delighted to be able to assist Alstom in their fulfilment of these important orders. Our pricing has had to be very tight to win these contracts and we had hoped that deliveries could have commenced in the first quarter of 2013, but nevertheless we are delighted to be able to demonstrate our expertise to an important customer like Alstom Grid. The successful execution of orders such as these positions Dynex well for future global business."
Bob Lockwood, Chief Financial Officer commented, "World markets for Dynex products have been weak for some time, however we believe that a turnaround is now beginning. We believe the recent orders are tangible evidence of that change and they should help ensure that we generate revenue growth in 2013. As Paul indicated, we have had to be very competitive to win this business, and to help Alstom Grid be sufficiently competitive to win the underlying contract that provided us the business opportunity. Consequently, although these orders allow us to forecast revenue growth in 2013, we cannot, at this stage, forecast any significant growth in net profit for 2013 compared to 2012."
About the Company
Dynex designs and manufactures high power bipolar semiconductors, high power insulated gate bipolar transistor (IGBT) modules, high power electronic assemblies and radiation hard silicon-on-sapphire integrated circuits (SOS IC's). The company's power products are used worldwide in power electronic applications including electric power transmission and distribution, renewable and distributed energy, marine and rail traction motor drives, aerospace, electric vehicles, industrial automation and controls and power supplies. Our IC products are used in demanding applications in the aerospace industry. Dynex Semiconductor Ltd is its only operating business and is based in Lincoln, England in a facility housing the fully integrated silicon fabrication, assembly and test, sales, design and development operations. Dynex is majority owned by Zhuzhou CSR Times Electric Co., Ltd.
Zhuzhou CSR Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China. It is listed on the Hong Kong stock exchange. CSR Times Electric is mainly engaged in the research, development, manufacture and sales of locomotive train power converters, control systems and other train-borne electrical systems, as well as the development, manufacturing and sales of urban railway train electrical systems. In addition, CSR Times Electric is also engaged in the design, manufacturing and sales of electric components including power semiconductor devices for the railway industry, urban railway industry and non-railway purposes.
Press announcements and other information about Dynex are available at www.dynexsemi.com.
Further information on CSR Times Electric can be found at www.timeselectric.cn/en
All monetary values expressed in this release are in Canadian Dollars unless stated otherwise.
The TSX Venture Exchange has neither approved nor disapproved of the information in this press release.
SOURCE: DYNEX POWER INC.
For further information:
Dr. Paul Taylor
President and Chief Executive Officer
Finance Director and Chief Financial Officer
Dynex Power Inc.
Tel: +44 1522 500 500