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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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: [email protected]
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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
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ASSETS
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<p>Current Assets</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
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Total current assets 322,155 296,461
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<p>Non-current Assets</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
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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>LIABILITIES</p>
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<p>Current Liabilities</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
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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
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Total long-term liabilities 67,139 134,618
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<p> Total Liabilities 220,620 252,381</p>
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<p>EQUITY</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
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Total shareholders' equity 179,580 116,010
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Minority interests 1,722 1,524
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Total Equity 181,302 117,534
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$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
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Total revenues 212,497 305,880
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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
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147,659 277,021
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<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
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- 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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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>Cash <money>$244,752</money> <money>$201,622</money> <money>$183,903</money> <money>$99,078</money> <money>$26,185</money></p>
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<p>Securities 12,448 4,493 45,984 36,787 2,880</p>
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<p>Current Assets 322,155 296,461 315,256 195,462 82,599</p>
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<p>Total Assets 401,922 369,915 355,576 230,437 109,255</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>
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<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>(3) Not applicable</p>
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(4) 6-month period, not comparable
For further information: Rene Randall, +1-604-408-8538, [email protected], for Mass Financial Corp. Web Site: http://www.massfinancialcorp.com
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