Xinhua Finance Limited ("XFL", TSE Mothers: 9399 and OTC: XHFNY), China's premier financial information and media service provider, today announced consolidated business results for the fiscal year ended December 31, 2007. Under International Financial Reporting Standards ("IFRS"), XFL's consolidated revenue increased to US$257.7 million, up 47% from US$175.0 million a year ago; EBITDA was US$39.0 million, representing a year-on-year growth of 67% from US$23.3 million; and net income grew 201% to US$56.5 million from US$18.7 million in 2006. Fully diluted earnings-per-share (EPS) reached US$51.68, up from US$20.14 in 2006.
Proforma EBITDA, adjusted to exclude non-cash ESOP expenses and one-time items, was US$54.3 million, representing an operating margin of 21% and an increase of 68% over US$32.4 million in the previous year. XFL provides proforma results to help investors better understand the Company's underlying operating and financial trends.
During the year, XFL divested or discontinued certain businesses in order to align its growth strategy with the opportunities in China and the areas where the company has a significant competitive edge. Revenue from continuing operations was US$247.5 million, exceeding the 2007 full year forecast of continuing operations of US$242.2 million by 2%. Pro Forma EBITDA from continuing operations was US$57.2 million vs. full year forecast from continuing operations of US$58.4 million.
XFL CEO Fredy Bush said that the company was pleased to report another year of strong growth propelled by the achievements across all service lines and the dynamic market environment in China.
"Our solid financial performance in 2007 demonstrates the continued success of our China-focused strategy. For fiscal year 2007, over 55% of revenue and 70% of our employees came from our China businesses. We have successfully developed significant market leadership in each of our service lines over the last 8 years since we started this company. We believe we are well poised for seizing further opportunities for growth as China continues to evolve. In 2008, we will invest in the business strategically to strengthen our unrivaled position," said Ms. Bush.
In 2007, XFL continued to successfully leverage its content and distribution businesses to benefit from the vigorous development of China's markets. In XFL's content business, the company's China indices were benchmarked by more funds worldwide, with total assets under management rising to around US$122 billion at the end of 2007 from US$108 billion at the third quarter of 2007 and US$54 billion a year ago. The financial news service signed a contract with the Singapore Stock Exchange to offer customized Chinese news products. For the IR service line, the corporate announcement distribution services, Xinhua PR Newswire, increased its distribution volume by 48% from 2006 and the number of journalists in China on its network grew from 6,500 to 9,000 at the end of 2007.
In March 2007, the Company completed the initial public offering of Xinhua Finance Media ("XFMedia", Nasdaq: XFML), a subsidiary under the Distribution service line, raising net proceeds of about $200 million, to help accelerate the expansion of this business line. During the year, XFMedia grew robustly given the booming advertising market in China. XFMedia built its leading position as a media group in China and strengthened its unique platform which provides clients with nationwide access to the large and growing upwardly mobile demographic.
CFO David Wang said, "XFL turned in a strong performance in 2007 with substantial growth in both top and bottom lines. As the Company further expands, we will continue our integration efforts between the content and distribution businesses in order to improve the profitability, cost controls and operational efficiency of the entire group."
2007 vs. 2006 and vs. 2007 Forecast (IFRS) -- unit: USD million
2007 2006 Variance 2007F Variance
Revenue 257.7 175.0 47 % 260.0 -1%
Proforma EBITDA (1) 54.3 32.4 68 % 60.5 -10%
EBITDA (2) 39.0 23.3 67 % 46.6 -16%
Net Income 56.5 18.7 201 % 57.3 -1%
Continuing Operations (3)
2007 vs. 2006 (IFRS) -- unit: USD million
2007 2006 Variance
Revenue 247.5 161.2 54%
Proforma EBITDA (1) 57.2 26.2 119%
EBITDA (2) 42.2 17.1 147%
2008 Forecasts (IFRS) -- unit: USD million
2008 Forecasts
Revenue 327.2
Proforma EBITDA (1) 63.0
EBITDA (2) 45.9
Proforma Net Income (4) 7.3
Net Income -9.2
(1) Proforma EBITDA is EBITDA excluding non-cash ESOP expense and
excluding one time items.
(2) EBITDA for the year ended December 31, 2007 includes non-cash one time
charge of US$5.7m from the revaluation of a convertible loan, one time
legal expenses of US$0.6m and non-cash ESOP expenses of US$9.1m.
(3) Due to changes in the composition of our business as a result of the
divestiture or discontinuation of certain subsidiaries, we also
present results from continuing operations.
(4) Proforma Net Income is calculated by taking net income and excluding
non cash depreciation and amortization charges, share based
compensation expenses and one time non recurrent items.
(Notes)
A. We define EBITDA in relation to our IFRS financial statements as profit
or loss before interest, tax, depreciation and amortization.
B. Forecasts for fiscal 2008 are management estimates only; figures have
not been audited or reviewed.
C. Performance estimates are determined based on information currently
available. Due to unforeseen factors, actual performance may differ
from estimates.
About Xinhua Finance Limited
Xinhua Finance Limited ("XFL") is China's premier financial information and media service provider and is listed on the Mothers Board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the world, Xinhua Finance's proprietary content platform, comprising Indices, Ratings, Financial News, and Investor Relations, serves financial institutions, corporations and re-distributors worldwide. Through its subsidiary Xinhua Finance Media Limited (NASDAQ:XFML) , XFL leverages its content across multiple distribution channels in China including television, radio, newspaper, magazine and outdoor media. Founded in November 1999, XFL is headquartered in Shanghai, with offices and news bureaus spanning 11 countries worldwide.
For more information, please visit http://www.xinhuafinance.com/ .
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