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GINSMS Announces Financial Results for the Three and Twelve Months Ended December 31, 2016 and Provides Financial Forecasts for Year 2017

CALGARY, ALBERTA — (Marketwired) — 02/13/17 — GINSMS Inc. (TSX VENTURE: GOK) (“GINSMS” or the “Corporation”) has announced its financial results for the fourth quarter and twelve months ended December 31, 2016.

The annual audited financial statements of the Corporation for the twelve months ended December 31, 2016 are currently under audit and in the process of preparation. As required under Canadian securities law regulations, the Corporation will be disclosing and filing on SEDAR its annual audited financial statements and the related management–s discussion and analysis (“MD&A”) of the Corporation will be ready within 120 days after the end of its year end of December 31, 2016.

This financial disclosure was done in advance of the filing of the audited financial statements of the Corporation to allow GINSMS– ultimate holding company, Xinhua Holdings Limited (“Xinhua”), a public company in Japan, to use certain of GINSMS– financial information in the preparation of Xinhua–s financial statements and announcements.

The Corporation–s financial information for the twelve months ended December 31, 2016 is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Highlights include:

Selected Profit and Loss Information

Cost of Sales

Operating Expenses and Finance Costs

Selected Balance Sheet Information

Total assets of GINSMS including cash, accounts receivable, other receivables, prepayment and deposits, property, plant and equipment and development expenditures as at December 31, 2016 amounted to $2,627,090 compared to $2,614,429 as at December 31, 2015. Bank and cash balances amounted to $139,808 as at December 31,2016 decrease by 55% compared to $310,805 as at December 31, 2015. The decrease was mainly due to operating loss and getting fewer loans from the related parties in the twelve months ended December 31, 2016 as the Corporation relied more on the cash flow from its operations. The cash flow from financing activities is $416,760 for the twelve months ended December 31, 2016 compared to $864,627 for the nine months ended December 31, 2015.

Selected Liquidity and Capital Resources Information

SEGMENTED INFORMATION

a) Revenue by customers

b) Revenue by geographical location (by location of operations)

c) Total assets by geographical location

d) Financial information by business segments

Outlook

The Corporation announces its financial forecasts for the twelve months ending December 31, 2017. The information included in this news release represents management–s guidance as approved on February 13, 2017. The financial outlook was prepared for Xinhua Holdings Limited, the ultimate holding company of the Corporation, for its reporting obligations in Japan.

The material factors and assumptions used to develop the financial outlook include:

In addition, the Corporation expects to record net earnings in the financial year ending December 2020 (instead of 2019 as announced on March 30, 2016) and recover from its current negative net asset position by the end of the 2022 financial year (instead of 2020 as announced on March 30, 2016). This is due to slower growth than originally expected resulting from the loss of a major customer sending A2P messages to China and also the delay in obtaining the necessary financing to grow the business. The purpose of this financial outlook is to allow the Corporation–s ultimate holding company, Xinhua, to make reference and/or to use such outlook in its own financial disclosure. The operation of GINSMS is a major part of the growth strategy of Xinhua. As such, Xinhua believes that disclosing such information would be useful for its shareholders. Consequently readers of this press release are cautioned that the financial outlook of GINSMS concerning its net earnings and net assets positions is forward looking information and may not be appropriate for other purposes.

About GINSMS

GINSMS is a mobile technology and services company focusing on 2 areas namely its A2P Messaging Service and its Software Products and Services. GINSMS operates a cloud-based A2P messaging service that allows the termination of SMS to mobile subscribers of more than 200 mobile operators globally. GINSMS also develops and distribute innovative software products and services for mobile operators and enterprises and have successfully deployed more than 100 solutions worldwide. GINSMS has offices in China, Singapore, Hong Kong, Malaysia and Indonesia.

Forward Looking Statements

Certain information included in this press release may contain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, or “continue” or the negative thereof or variations thereon or similar terminology. These statements are not historical facts, but reflect management–s current beliefs and are based on information currently available to management regarding future results and events. Particularly, these forward-looking statements are based on management–s estimate of future events based on technological advances relating to the Corporation–s services, current market conditions and past experiences of management in relation to how certain contracts will affect revenues. Forward-looking statements, by their very nature, involve significant risks, uncertainties and assumptions.

A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to dependence on major customers, system failures, delays and other problems, increasing competition, security and privacy breaches, dependence on third-party software and equipment, adequacy of network reliance, network diversity and backup systems, loss of significant information, insurance coverage, capacity limits, rapid technology changes, market acceptance, decline in volume of attractions, retention of key members of the management team, success of expansion into Chinese and other Asian markets, credit risk, consolidation of existing customers, dependence on required licenses, economy and politics in countries where the Corporation operates, conflicts of interest and residency of directors and officers. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, the Corporation cannot assure the reader that actual results will be consistent with these forward-looking statements.

In particular, forward-looking statements include the following assumptions:

These forward-looking statements are made as of the date of this press release and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by law. Accordingly, readers should not place undue reliance on the forward-looking statements. Forward looking statements are presented in this news release for the purpose of assisting investors and others in understanding certain key elements of our expected fiscal 2017 financial results, as well as our objectives, strategic priorities and business outlook for fiscal 2017, and in obtaining a better understanding of the Corporation–s anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. All forward-looking statements contained in this press release are qualified by this cautionary statement.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contacts:
GINSMS Inc.
Joel Chin
CEO
+65-6441-1029

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