Mid-Year Report January – June 2011
Technical Development 2011
MindArk's work with developing the technical platform has continued during the first six months of 2011.
The focus has primarily been to further develop the virtual universe to create yet another dimension - Space encompassing all the existing and future planets.
Launching Space
The vision of implementing Space to connect the various planets has always been an important part of the Entropia Universe concept. The development project was initiated during 2010 to prepare for such implementation.
During the first two quarters of 2011major resources were focused towards completing the Space project and in the middle of June MindArk launched Space as part of Entropia Universe.
New Planet Releases
In May 2011, a 4th planet, Planet Arkadia, was released in Entropia Universe. The company behind Planet Arkadia is based in Singapore and is targeting the Southeast Asian market.
A 5th planet, Cyrene, produced by the company Creative Kingdom with headquarter in Los Angeles, is in full production and is estimated to launch during Q4.
Collaboration with Ericsson
MindArk has worked in close
collaboration with Ericsson in a
project for developing an advanced
voice communication system in
Entropia Universe. The technology
enables in-depth social interaction
capability and enhances the
experience for the end users in
Entropia Universe.
Ericsson made a public announcement
about the collaboration in May
2011. Development continues on the
project and the two companies are
discussing future joint efforts in
marketing.
MindBank
In March 2010, MindArk put a
request to the Swedish
Financial Supervisory Authority
(Finansinspektionen) to withdraw
earlier granted approval to conduct
banking activities. During a board
meeting in March 2011 it was
decided to discontinue all activities
related to the bank project.
The Managing Director of MindBank,
however, will continue to work close
with MindArk´s CEO in the process of
contracting more partners. The bank
project is quality assured and
thoroughly documented to prepare
for a future application when the
necessary funds for establishing the
bank can be guaranteed.
Mid-Year Report January – June 2011
Economic Development
Focus on new content to the end
users in Entropia Universe and
release of Space have together led to
an increase of received end user
funds.
End users’ net contribution for the
first six months this year was 23.9
million SEK compared to 20.8 million
SEK the previous year, an increase of
15 %.
A complete organizational review
resulted in an organizational change,
which lead to a reduction in staff
equivalent to nine full-time
employees. That, combined with a
deliberate restraint on costs resulted
in decreased operating costs from
35.7 million SEK from previous year
to 27.3 million SEK this year, a
decrease of 23%.
The profit before taxes for the
MindArk Group amounts to minus 8.2
million SEK compared to minus 13.4
million SEK previous year.
Cash Flow and Liquid Assets
One of the major goals for 2011 is to
re-establish a positive cash flow.
MindArk´s implemented organizational
streamlining were part of this,
resulting in lower operating costs.
Furthermore, MindArk made
investments in new content in
Entropia Universe which increased
net sales.
The cash flow has hence improved
compared to the development during
2010, but it is still negative. The
Group's liquid assets as of June 30
were approximately 6.6 million SEK
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MindArk PE AB (publ) develops, operates and markets Entropia Universe and the Entropia Platform. Entropia Universe is a 3D Internet
virtual universe with a unique integrated economic system and stunning graphics. The client software is free-of-charge and available to
anyone with Internet access. The Entropia Platform is a secure entertainment and business platform, enabling companies and
organizations all over the world to build content on themed planets inside Entropia Universe.
compared to approximately 8 million
SEK the previous year.
Annual Meeting 2011
The annual meeting for 2011 was
held on June 1 in the company’s
offices. In addition to standard
decisions according to the articles of
association, it was by the meeting
decided to submit an authorization to
the Board of Directors to issue new
shares at market conditions. The
increase of the share capital may be
made up of 25 %.
The Board´s current members,
elected at the Annual meeting 2010,
-Fred Rosenthal (Chairman), Jan
Welter Timkrans, Christophe Morvan
and Urban Näsman – were all
reelected. The meeting resolved that
Mid-Year Report January – June 2011
the Board should not have any
alternate.
Forecast for Second Half of 2011
The current operation is expected to
increase in the second half with
higher net deposits than previous
year. Furthermore, costs are
expected to be significantly lower the
second half of 2011 than the same
period last year.
Net profit before tax for the second
half of 2011 is expected to be better
than in the first half of the year with
positive results and cash flow for the
months of September through
December.
Accounting Principles
This semi-annual report has been
compiled according to the laws
concerning annual accounts.
The accounting principles are
unchanged compared to the last
annual report.
Receivables are shown as the value
at which they are expected to be
paid. Other assets and debts are
shown at acquisition value unless
otherwise noted.
Accrual of income and costs are
shown according to accepted
accounting practices.
For further descriptions of accounting
principles, see 2010 Annual Report.
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MindArk PE AB (publ) develops, operates and markets Entropia Universe and the Entropia Platform. Entropia Universe is a 3D Internet
virtual universe with a unique integrated economic system and stunning graphics. The client software is free-of-charge and available to
anyone with Internet access. The Entropia Platform is a secure entertainment and business platform, enabling companies and
organizations all over the world to build content on themed planets inside Entropia Universe.
Mid-Year Report January – June 2011
Financial Information
For further information concerning
the company’s financial results,
standing and cash flow during the
period, see results and balance
reports below, as well as the cash
flow analysis and key figures.
Göteborg, August 2011
The Board of Directors
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MindArk PE AB (publ) develops, operates and markets Entropia Universe and the Entropia Platform. Entropia Universe is a 3D Internet
virtual universe with a unique integrated economic system and stunning graphics. The client software is free-of-charge and available to
anyone with Internet access. The Entropia Platform is a secure entertainment and business platform, enabling companies and
organizations all over the world to build content on themed planets inside Entropia Universe.
Review report
I have reviewed this report for the
period 1 January 2011 to 30 June
2011 for MindArk PE AB (publ). The
board of directors and the CEO are
responsible for the preparation and
presentation of this interim report in
accordance with the Swedish Annual
Accounts Act. My responsibility is to
express a conclusion on this interim
report based on my review.
I conducted my review in accordance
with the Swedish Standard on
Review Engagements SÖG 2410,
Review of Interim Report Performed
by the Independent Auditor of the
Entity. A review consists of making
inquiries, primarily of persons
responsible for financial and
accounting matters, and applying
analytical and other review
Mid-Year Report January – June 2011
procedures. A review is substantially
less in scope than an audit conducted
in accordance with International
Standards on Auditing, ISA, and
other generally accepted auditing
standards in Sweden. The procedures
performed in a review do not enable
me to obtain assurance that I would
become aware of all significant
matters that might be identified in an
audit. Accordingly, I do not express
an audit opinion.
Based on my review, nothing has
come to my attention that causes me
to believe that the interim report is
not prepared, in all material
respects, in accordance with the
Swedish Annual Accounts Act.
Göteborg, 31 August 2011
Magnus Götenfelt
Authorised Public Accountant
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INCOME STATEMENT (kSEK) GROUP PARENT COMPANY
JANUARY–JUNE 2011 JANUARY–JUNE 2010 JANUARY–JUNE 2011 JANUARY–JUNE 2010
Net sales 23 907 20 805 23 028 9 152
Other income 213 6 268 1 514 8 455
Operating expenses -27 356 -35 731 -27 487 -30 343
Depreciation according to plan -4 378 -4 692 -3 511 -3 578
Operating profit -7 614 -13 349 -6 456 -16 314
Financial items -583 -55 -465 5
NET PROFIT BEFORE TAX -8 197 -13 404 -6 921 -16 309
======= ======= ======= ======
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BALANCE SHEET (kSEK) GROUP PARENT COMPANY
JUNE 2011 JUNE 2010 JUNE 2011 JUNE 2010
ASSETS
Intangible assets 17 003 24 466 17 003 22 429
Tangible assets 18 898 20 886 16 956 17 566
Financial assets 2 095 3 018 9 663 10 586
Receivables 39 141 5 113 7 762 3 892
Prepaid expenses 2 104 2 295 1 483 1 632
Cash and bank balances 6 594 8 089 6 008 7 077
TOTAL ASSETS 85 835 63 867 58 875 63 182
EQUITY & LIABILITIES
Equity 40 871 50 302 42 369 38 603
Untaxed reserves 0 0 0 11 717
Provisions for deferred tax 0 3 081 0 0
Short-term liabilities 44 964 10 483 16 506 12 862
TOTAL EQUITY & LIABILITIES 85 835 63 867 58 875 63 182
UNCONSUMED USER HOLDING 61 100 63 700 61 100 63 700
PLEDGED ASSETS 1 104 1 622 1 104 1 622
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CASH FLOW STATEMENT (kSEK) GROUP
JANUARY-JUNE 2011 JANUARY-JUNE 2010
PARENT COMPANY
JANUARY-JUNE 2011 JANUARY-JUNE 2010
OPERATING ACTIVITIES
Cash received from customers 24 151 32 382 23 605 22 965
Cash paid to suppliers and
personnel -26 775 -37 807 -26 180 -29 338
Interest received 65 97 64 97
Interest paid -37 -71 -0 -12
Income tax paid -103 2 395 -58 2 455
Cash flow operating activities -2 699 -3 004 -2 569 -3 833
INVESTING ACTIVITIES
Purchase of property and equipment
-304 -1 169 -64 -1 019
Sale of property and equipment 68 0 68 0
Investments in other financial -64 0 -640
assets
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Amortization financial assets
Increase in long-term receivables
Cash flow from investing
activities
-
687
254
133
FINANCING ACTIVITIES
Other financing / amortization (-) -141
Cash flow for the period -2 707
Ingoing cash and bank balances
Exchange rate differences in cash
and bank balances
9 659
-358
Outgoing cash and bank
balances
6 594
0
-289
-1 458
-544
-5 006
13 122
-26
8 090
687
-167
460
0
-2 109
8 479
-362
6 008
0
-289
-1 308
-5 141
12 298
-80
7 077
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KEY RATIOS – MINDARK GROUP JANUARY-JUNE 2011 JANUARY-JUNE 2010
Net sales (kSEK) 23 907 20 805
Operating profit (kSEK) -7 614 -13 349
Financial items (kSEK) -583 -55
Net profit (kSEK) -8 197 -13 404
Thousand number of shares issued 114 635 114 635
Operating margin -32 % -64 %
Profit per share (SEK) -0.07 -0.11
Liquid funds (kSEK) 6 594 8 089
Adjusted Equity (kSEK) 40 871 50 302
Adjusted Equity per share (SEK) 0.36 0.44
Total assets (kSEK) 85 835 63 867
Equity ratio 48 % 79 %
Number of employees in the MindArk 66 80
Group
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i have a conclution about this post.
ReplyDeleteEntropia Universe is losing veteran players and the company is not doing nothing about that.
Next year Entropia Universe will have a vital year in his fight for continue alive.