Mass Financial Corp. Reports Results for the Year Ended 2009

- Book Value Increases to $9.72 Per Common Share -

News provided by

Jun 01, 2010, 07:30 ET

HONG KONG, June 1 /PRNewswire-FirstCall/ -- Mass Financial Corp. ("MFC") (Vienna Stock Exchange symbol: MASS) today reported its financial results for the year ended December 31, 2009. All figures are in U.S. dollars and earnings per share amounts are on a diluted basis.

For the year ended December 31, 2009, MFC reported total revenues of $406.4 million with net income attributable to our shareholders of $75.2 million or $2.70 per share, compared to total revenues of $598.8 million with net income of $23.3 million or $0.91 per share for the year of 2008.

At December 31, 2009, MFC had $346.8 million in cash and securities, its current ratio was 2.14, and the long-term debt-to-shareholders' equity ratio was 0.28. Equity per common share increased to $9.72 ($10.55 a share before our adjustment for our stock dividend paid in December 2009). For 2009 MFC's net income represented a 65% return on equity as compared to S&P 500's return of 26%.

MFC's book value per share as of December 31, 2009 has increased by 300% from our first full year in 2006. We believe this is the best measurement of our results and performance and that a price earnings multiple is not relevant measurement of MFC's performance.


MFC's book value per share as of December 31, for the dates indicted is set out below
2009	2008	2007	2006	2005
$9.72	$5.71	$4.39	$2.43	Nil

Note: 2006 to 2008 amounts are adjusted for the effect of our stock dividend paid in December 2009

Our revenues for the year ended December 31, 2009 declined from 2008, primarily due to reducing our risk exposure by scaling back our commodity and trade finance business in countries we deemed higher-risk. We also reduced our product lines and customer base to reflect global macro economic conditions.

President Michael Smith commented, "We are not pleased with our overall performance in 2009. Progress on certain projects proved elusive and we believe we are capable of better execution. We remain focused on preserving our capital and liquidity. MFC is healthier, as we are not currently operating with a belief that our markets will return to prior levels in the short-term.

In December 2009 we issued a stock dividend to shareholders of one new common share for each 11 shares owned."

Mr. Smith continued, "Our strategy demands constant review and attention to ensure MFC reflects our commitment to building shareholder value. This year, we are determined to:

Become more disciplined and focused more specific business lines
Create value in areas where we have specialized knowledge
Direct more energy and effort to the Asian markets
Seek greater asset exposure in Asia
Complete another listing for our common shares
Increase the number and industry experience of our directors."

Mr. Smith concluded, "Our main objective remains simply to do good business. Our liquidity allows us to take advantage of emerging opportunities. These are interesting times for business opportunity, but we must maintain our financial discipline. Now is the time to focus on projects in our areas of our special knowledge while carefully assessing the risks.

Our goal for 2010 and 2011 will be to leverage our foundation of resources and strategic network of operating businesses to pursue international growth opportunities. We will continue to manage our business for the long term."

Shareholders are encouraged to read the entire Annual Report, which is available on the Company's website for a greater understanding of MFC.

About the Company:

Mass Financial Corp's merchant banking business encompasses a broad spectrum of activities related to the integrated combination of banking, trading of commodities and natural resources, financing of commercial trade, and proprietary investing. To obtain further information, please visit our website at http://www.massfinancialcorp.com

Disclaimer for Forward-Looking Information

Certain statements in this news release are forward-looking statements, which reflect our management's expectations regarding our future growth, results of operations, performance, and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits we will obtain from them. These forward-looking statements reflect management's current views, are based on certain assumptions, and speak only as of December 31, 2009. These assumptions, which include management's current expectations, estimates and assumptions about certain projects and the markets we operate in, the global economic environment, interest rates, exchange rates and our ability to attract and retain customers and to manage the company's assets and operating costs, may prove to be incorrect. Important factors and risks that might cause our actual results to differ materially from the results contemplated by these forward-looking statements, including those that are contained in the section titled "Risk Factors," are included in our annual report for 2009 and investors are urged to read them in there entirety. Investors are also cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

North America Contact: Rene Randall
Telephone: 1 (604) 408 8538 Email: [email protected]

-FINANCIAL TABLES FOLLOW-

MASS FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS December 31, 2009 and 2008 (U.S. Dollars in Thousands)

		2009		2008
ASSETS

Current Assets
Cash and cash equivalents	$	329,554	$	201,622
Securities		17,196		4,493
Restricted cash		2,466		16,054
Loan receivables		111		1,357
Trade and other receivables		19,778		30,315
Inventories		46,197		20,075
Properties for sale		13,616		13,374
Tax receivables		3,138		2,237
Prepaid and other		5,211		6,934
Total current assets		437,267		296,461

Non-current Assets
Restricted cash		29		28
Securities		5,880		9,150
Securities, restricted		9,357		9,357
Receivables		–		286
Property, plant and equipment		5,460		2,806
Investment property		41,290		39,744
Goodwill		5,657		4,513
Deferred tax assets		3,317		2,149
Equity method investments		4,074		5,421
Total non-current assets		75,064		73,454

	$	512,331	$	369,915

MASS FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS (cont'd) December 31, 2009 and 2008 (U.S. Dollars in Thousands)

		2009		2008
LIABILITIES

Current Liabilities
Financial liabilities, short-term bank loans	$	141,016	$	65,067
Trade and other payables and accrued expenses		45,714		39,040
Accrued dividend on preferred shares		–		9,265
Provisions		959		487
Income tax liabilities		933		1,134
Long-term debt, current portion		16,071		2,770
Total current liabilities		204,693		117,763

Long-term liabilities
Long-term debt, less current portion		58,097		52,634
Financial liabilities		9,357		9,357
Deferred tax liabilities		1,367		1,030
Due to prior owner and former subsidiaries		–		71,506
Note payable		1,672		–
Other non-current liabilities		25,829		91
Total long-term liabilities		96,322		134,618

Total Liabilities		301,015		252,381


EQUITY

Shareholders' equity
Common stock, net		46,132		18,090
Equity component of convertible debt		800		1,000
Other reserves		(3,073)		(11,656)
Retained earnings		166,461		108,576
Total shareholders' equity		210,320		116,010

Non-controlling interests		996		1,524
Total Equity		211,316		117,534
	$	512,331	$	369,915

MASS FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 2009 and 2008 (U.S. Dollars in Thousands, Except per Share Amounts)

		2009		2008
Revenues from sales, services and other	$	402,786	$	594,545
Share of the results of associates and joint ventures		3,619		4,263
Total revenues		406,405		598,808
Expenses
Cost of sales		273,793		494,391
General and administrative		30,631		28,216
Interest		13,350		15,464
Dividend on preferred shares classified as liabilities		–		3,744
Other		7,108		8,267
		324,882		550,082
Operating profit		81,523		48,726
Other items:
Currency transaction loss		(6,148)		(18,151)
Goodwill impairment		–		(5,235)
Profit before income taxes		75,375		25,340
Recovery of income taxes		43		1,272
Net income	$	75,418	$	26,612

Attributable to:
Shareholders of Mass Financial Corp.	$	75,179	$	23,288
Non-controlling interests		239		3,324

	$	75,418	$	26,612

Earnings per share
- basic	$	3.69	$	1.20
- diluted	$	2.70	$	0.91


Number of weighted average shares outstanding, basic		20,353,302		19,468,454
Number of weighted average shares outstanding, diluted		28,089,650		25,977,458

MASS FINANCIAL CORP. FINANCIAL HIGHLIGHTS (U.S. Dollars in Thousands except per Share Data and Ratios)

	December 31,
	2009	2008	2007	2006	2005(5)
Cash	$329,554	$201,622	$183,903	$99,078	$26,185
Securities	17,196	4,493	45,984	36,787	2,880
Current Assets	437,267	296,461	315,256	195,462	82,599
Total Assets	512,331	369,915	355,576	230,437	109,255
Current Liabilities	204,693	117,763	143,324	91,280	39,421
Working Capital	232,574	178,698	171,932	104,182	43,178
Current Ratio	2.14	2.52	2.20	2.14	2.10
Long-Term Debt, less current portion	58,097	52,634	28,068	4,710	869
Long-Term Debt-to-Equity Ratio	0.28	0.45	0.34	0.10(3)	– (3)
Debt – Preferred Shares	–	71,506	91,956	77,976	67,058(1)
Total Liabilities	301,015	252,381	272,859	183,491	107,348
Shareholders' Equity	210,320	116,010	81,583	45,131	1(2)
Return on Shareholders' Equity	65%	29%	107.4%	– (3)	– (3)
Equity Per Common Share	9.72	5.71(4)	4.39(4)	2.43(4)	– (3)
Dividend (in stock)	9%	–	–	–	–

(1) Opening balance of 2005, preferred shares are denominated in Canadian dollars. (2) The net assets acquired in 2005 were wholly paid for through the issuance of debt in the form of preferred shares. An independent valuation of the common shares at the time of our spin-off was in the range of $0.50 to $0.76 per share, or approximately US$9 million in aggregate. At that time the valuation treated the common shares as having a warrant value on the future capital that may be made earned on the preferred shares in excess of their stated dividend. (3) 2006 was the first year of common shareholders' equity as there was no equity attributable to such shares as of December 31, 2005. (4) Adjusted for the effect of the stock dividend declared in December 2009. (5) Unaudited.