23rd Sep 2015 08:21
LONDON (Alliance News) - Vmoto Ltd on Wednesday said it has sold its electric vehicle controller business Nanjing Haiyong for CNY2 million, about USD313,299.
Shares in Vmoto were trading down 24% at 12.50 pence Wednesday morning, after being suspended pending the announcement.
The electric scooter manufacturer said that it has sold Nanjing Haiying, an electronic technology company producing controllers for electric vehicle driver systems, to Cen Cong, and has already received CNY500,000 of the total consideration. The remaining CNY1.5 million is due to be received by the end of September.
Vmoto said that the business did not deliver the returns expected, and that it will now focus on the company's core business of electric scooters, adding that its pipeline of potential contracts both in China and internationally continues to grow.
The disposal will, however, reduce earnings for 2015 by 1 million dollars, Vmoto said, and will also result in a one-off non-cash impairment charge.
Vmoto now forecasts underlying earnings before interest, tax, depreciation and amortisation of between 5 million and 7 million dollars, and underlying net profit after tax between 4 million and 6 million dollars.
The Perth-based company did not state whether the figures were in Australian or US dollars, and a spokesperson couldn't immediately be reach for confirmation.
"Nanjing Haiyong was instrumental in providing Vmoto with the opportunity to enter into the 3/4 wheel electric vehicle joint venture, and for this we are thankful. However, we strongly believe that exiting this business now via the sale of its assets is in the best interests of Vmoto and its shareholders longer term given the business was not generating the returns expected when it was originally purchased," Managing Director Charles Chen said in a statement.
"Our electric vehicle production and existing and potential customer relationships will not be affected by this decision. It will mean that we can devote all our time, effort and resources to the growth of our electric two-wheel vehicle operations and 3/4 wheel electric vehicle joint venture," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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