DGAP-Adhoc: Asian Bamboo announces Q1 2013 results

Asian Bamboo AG / Key word(s): Quarter Results

14.05.2013 06:49

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Hamburg, 14 May 2013 - Asian Bamboo AG ('Asian Bamboo', 'the Company',
ISIN: DE000A0M6M79, ticker symbol: '5AB', ADR ticker symbol 'ASIBY'), an
integrated company in the bamboo industry, regrets that the conditions for
running an agriculture business in Fujian province remained very
challenging in Q1 2013.

The results for the period were as follows (percentage numbers are
year-on-year comparisons):

* Revenue decreased 79% to EUR 5.2 million (Q1 2012: EUR 24.8 million)
* Gross profit including FVBA-changes* decreased 69% to EUR 2.9 million (Q1
2012: EUR 9.1 million), equivalent to a gross profit margin including
FVBA-changes of 55% (Q1 2012: 37%)
* Net loss was kEUR 12 (Q1 2012: net profit EUR 7.2 million)
* Operating cash flow before changes in working capital was EUR 0.6 million
(Q1 2012: EUR 10.6 million)
* Net cash from operating activities was negative EUR 3.2 million (Q1 2012:
positive EUR 7.6 million)

At the end of Q1, the Company's balance sheet remained strong (comparable
numbers are 2012 year-end numbers):

* Biological assets were EUR 89.3 million (2012: EUR 83.9 million)
* Lease prepayments were EUR 202 million (2012: EUR 193.4 million)
* Cash and cash equivalents were EUR 37.2 million (2012: EUR 38.6 million)
* Total assets were EUR 364.1 million (2012: EUR 348.4 million)
* Total bank borrowings were EUR 48.1 million (2012: EUR 46.5 million)
* Total equity was EUR 303.3 million (2012: EUR 288 million)
* Total liabilities and equity were EUR 364.1 million (2012: EUR 348.4
million)

* FVBA is an abbreviation for gains/(losses) arising from changes in the
fair value less estimated costs to sell of biological assets

Strategic review

Over the last two years the Management Board has tried various initiatives
to improve the harvesting yields. However none has proved successful.
Therefore the Management Board has decided to implement a turnaround plan,
which involves fundamental changes to the Company's business model.

In summary the Company is decentralising decision making and aligning the
remuneration paid to employees involved in plantation management with the
profitability of the plantation management centres, which are the main
source of revenue for the Group.

The turnaround plan consists of the following key components:

* Organisational restructuring
* New incentive scheme
* Year-end review of the Company's operations
Organisational restructuring

The Company's business will be split into three areas which will be managed
independently. The three areas are - plantation management (including
harvesting and sales of bamboo shoots and bamboo trees), bamboo shoot
processing (including production and sales of processed bamboo shoots) and
bamboo fibre processing (including production and sales of bamboo fibre).
The plantations will continue to be managed by the subsidiaries
('plantation management centres') operating where the plantations are
located (Shaowu, Longyan, Shunchang, Wuyishan and Sanming). However,
instead of reporting directly to the Company's CEO they will now report to
the plantation management centre in Shaowu ('Shaowu'), which will have the
overall responsibility for decisions for and co-ordination of the Company's
plantation management activities, including the recruitment of farm labour
and reclamation work. Shaowu currently manages the Company's largest
plantation management centres and also has the longest and most successful
track record in plantation management within the Group.

Due to the Company's large plantation size and the complexities of running
a plantation business, the Management Board believes that this structure
will simplify and speed up decision making, generate synergies and increase
the plantation yield, particularly from the most recently leased
plantations. It will also allow the Company's CEO to focus on the bamboo
fibre processing business, which he will manage directly, and on other
matters of strategic importance.

The bamboo shoot processing business, which is a stable and well
established business, will be managed by the team at Fuzhou Xinrixian Food
Development Co., Ltd.

New incentive scheme

Complementing the decentralised decision-making process described above,
the plantation management centres ('the centres') will take part in an
incentive scheme, which will align employee remuneration more closely with
the profitability of each centre. In practice it means that all employees
working for the centres will receive a fixed yearly salary and a variable
bonus, paid at the end of the year, if certain profitability targets are
achieved. When calculating the profitability all costs related to
plantation management will be included and group overhead costs excluded.
The Management Board believes that this incentive scheme will motivate
these employees to look for creative and cost efficient solutions, which
will in turn improve revenues and net profits of the centres, which are the
main source of revenue and profits for the Group.

Year-end review of the Company's operations

At the end of the year the Management Board and the Supervisory Board will
review all aspects of the Company's operations. In this context the
Management Board wishes to emphasise that the structural issues, such as
increasingly unpredictable weather patterns and the decreasing supply of
farm labour, will not go away as a result of this turnaround plan. However,
the Management Board believes that decentralised decision making and
stronger and clearer incentives for the employees involved in plantation
management will yield positive results. In the unlikely event that the
situation does not improve by the end of the year, the Management Board and
the Supervisory Board will consider selling assets. Such an asset sales
programme could go on for a longer period of time and the worst performing
assets would be sold first. The company's key assets are of course the
plantation leases.

Financial situation

The financial situation remains stable. The Management Board forecasts
close to positive operating cash flows this year and should the situation
not improve before the end of the year, the Company will then initiate an
asset sales program which would further improve the financial situation of
the Group.

Guidance

The Management Board expects the overall operating situation to remain
challenging for the rest of the year. Therefore, the Management Board
forecasts revenues of at least EUR 50 million and close to positive
operating cash flows in FY 2013.

For enquiries, please contact:

Asian Bamboo AG:

Peter Sjovall +852-9385 3868
Chief Financial Officer peter.sjovall@asian-bamboo.com

Anja Holst +49-(0)40 37644 798
Investor Relations Director anja.holst@asian-bamboo.com

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Language: English
Company: Asian Bamboo AG
Stadthausbrücke 1-3
20355 Hamburg
Germany
Phone: +49 40 37644 798
Fax: +49 40 37644 500
E-mail: info@asian-bamboo.de
Internet: www.asian-bamboo.de
ISIN: DE000A0M6M79, DE000A0M6M79
WKN: A0M6M7, A0M6M7
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Stuttgart

End of Announcement DGAP News-Service

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