PTA-Adhoc: iQ Power Licensing AG: Annual Results 2017 published

Saturday, 12. May 2018 16:00

Public disclosure of inside information according to article 17 MAR

Zug, May 12, 2018 (pta001/12.05.2018/16:00) - ,

* Revenue from license business increased in the second half of 2017 by 85% compared to the first half of 2017
* Total annual revenue 2017 was CHF 686´000
* Earnings from operating business in the second half of 2017 improved by CHF 0.5 million over first half 2017
* New business models developed to increase revenue and profitability
* Anticipated entry of new majority shareholder in mid-2018 with funding of EUR 14 million at EUR 0,07 per share will create totally new operational environment

iQ Power Licensing AG (ISIN: CH028536338, WKN: A14M1C / Symbol iQL), the developer and marketer of technologies and their licenses for environmentally friendly and technologically leading starter batteries for motor vehicles, publishes the figures for the fiscal year 2017 and gives an overview of the current and future business.

Business Operations
Activities in South Korea in the second half of 2017 was dedicated to further expanding the production capacity and improving the reliability of the production of iQ Power´s Korean licensee iQ Power Asian Inc. In Q4 2017, the strategic Canadian partner of iQ Power Licensing AG, Discover Energy Corporation (DEC), officially took over the factory of the South Korean Licensee and re-named it Discover Mixtech Manufacturing Corporation (DMC). The CEO is the co-owner of DEC, Mr. Steve Nam, a Canadian citizen with roots in South Korea.

During the second half of 2017 the production capacity increased, however DMC failed to achieve the ambitious targets, which iQ Power Licensing had anticipated in the first half of 2017. New equipment is continuing to be installed for a second production line and a large increase in capacity and sales is anticipated for 2018. It should be noted that in addition to batteries with the iQ Power mixing technology, Discover Mixtech Manufacturing also produces products without this special feature to meet customer requirements for budget batteries with limited warranty.

In 2017 a close cooperation was started with a leading German developer of battery production technology for a new battery production machinery. The partnership resulted in a joint patent with iQ Power Licensing for a groundbreaking machine for the production of lead-grids for batteries for automotive and stationary applications.

Developments for other areas of battery production has led to iQ Power Licensing introducing a new concept battery factory called ´battery factory of the future ` . Factories based on this concept will be able to produce batteries in less than half the time of conventional battery factories and save more than 25% of energy costs. This factory will also integrate the electrolyte mixing technology of iQ Power plus other new technologies currently under development at iQ Power and its partners. It will result in battery cycle life being increased by four times or more versus conventional batteries at only a small on-cost. The new concept battery factory with its advanced new production technologies also applies to the production of AGM batteries.

Financial Results
The results of the second half year of 2017 were in line with expectations, with no major unusual expenses.

The net revenue for the second half was CHF 445´000, an increase of 85% versus the first half of 2017. The revenue increase came from the strategic licensee, Discover Mixtech Manufacturing Corporation in South Korea, which was able to increase capacity and sales. Total year sales were CHF 686´000.

The net revenues are a combination of license margin from plastic parts for the mixing devices and license income.

The loss from on-going operations for the second half of 2017 was CHF 451´000, which is a great improvement to the first half of 2017 (CHF -1´110´000). The improvement came from improved revenues and lack of extraordinary expenses, as occurred in the first half of 2017. For the total year, the loss was greatly reduced, from CHF 4.244 million in 2016 to CHF 1.567 million. As noted in earlier reports, the write-down of the participation in the South Korean factory weighed on earnings greatly in 2016.

In the first half of 2017 losses after tax were higher than would normally be anticipated due to non-operational losses. These negative profit events included a non-cash write down attributable to currency losses as the Swiss Franc weakened significantly against the Euro. iQ Power Licensing AG has almost EUR 3 million in financial assets, which must be adjusted for exchange rate differences to the balance sheet currency, the Swiss Franc.

In the first half of 2017, there was also unanticipated non-cash expense of CHF 192´000 from a write-off of the investment in the small industrial battery company in Germany.

The total assets of the company were largely unchanged from the first half of 2017 at CHF 4.5 million. The equity as a percent of total assets was 17%. The cash balance of the company was adequate at CHF 253´000.

Outlook for 2018
The anticipated entry of a new majority shareholder in mid-2018 will create a totally new operational environment for iQ Power Licensing. The funding of at least EUR 14 million will allow rapid expansion and productive implementation of the new business opportunities developed in 2017.

The introduction of new financial resources will allow for quick realization of the new businesses and will lead to a profit for the iQ Power Licensing AG in the second half of 2018. A new era of financial stability and explosive earnings growth is foreseen by the management.

The factory in South Korea will continue to dominate income for the first half of 2018. Following the full implementation of the projected new assembly line in 2018, the sales volume is set to increase and provide stable cash flow to iQ Power Licensing.

The newly created business division for consulting services for consulting and implementation of new battery factories and production facilities will contribute to income in the second half of 2018. Negotiations for a first customer from the Middle East have been recently concluded, as announced separately, and the customer is now waiting for final approval of the expected financing of the new plant by the central authorities, which is assured but takes time in such countries.

About the iQ Power Technology
Batteries with iQ Power technology are designed to generate better performance in Start-Stop applications and to meet the growing demands of electronic usage in vehicles today. It is the first significant innovation to the flooded starter battery in decades. Automatic mixing of electrolyte inside the battery by passive mixing elements ensures uniform acid density for higher sustained performance throughout the entire life of the battery, thus avoiding early loss of capacity (Ah) as usual with ordinary batteries. This prolongs plate life by eliminating acid stratification and thermal gradients, delivering greater material utilization for a lower cost per cycle over conventional batteries. The patented technology was awarded the coveted Automechanika innovation award 1st prize in 2010 and und became a first prize winner of the GreenTec Awards in 2017. - More under:


emitter: iQ Power Licensing AG
address: Metallstrasse 6, 6304 Zug
country: Switzerland
contact person: Dr. Eva Reuter
phone: +49 177 60 58 804

ISIN(s): CH0268536338 (share)
stock exchanges: open market in Berlin

[ source: ]

Related Links: iQ Power Licensing AG