News Article

MIFA Faces Multi Million Loss


SANGERHAUSEN, Germany – For 2013 MIFA expects a net loss of around 15 million euro. According to the German bike maker this net loss is mainly attributable to a failure to meet sales revenue expectations in 2013.

MIFA Faces Multi Million Loss
Incorrect bookings of inventory positions results in an unexpected multi million loss for MIFA. – Photo Jo Beckendorff

While preparing the annual financial statements according to German Commercial Code (HGB) accounting standards MIFA also found out the in 2013 inventory positions were incorrectly booked in connection with the launch of a new accounting system in the second quarter 2013. As a result the cost of material was understated in the financial statements for the second and third quarters of 2013. As MIFA does not conduct inventory-taking during the course of the year, the company failed to identify the erroneous bookings until the preparation of the annual financial statements.

“The preliminary loss has no impact on MIFA’s operating performance,” said the newly appointed board member for finance and administration, Hans-Peter Barth. “The order situation in the first quarter of 2014 is very healthy, and we have sufficient liquidity for our current business.”

MIFA expects to break even at the after-tax level in the first quarter of 2014. It will not be possible for the company to issue a reliable guidance concerning the full 2014 financial year until the preparation of the annual financial statements has been completed.

Stock market

The listing on the Frankfurt Stock Exchange (DAX) immediately responded on MIFA’s press release this morning. Since the opening of the DAX MIFA’s shares have lost more than one third of its value. Yesterday, the closing rate was € 6.59. For the most up-to-date rate of MIFA and other listings, check the Bike Europe Industry Stock Chart.


Potential effects on MIFA’s financing will also be investigated as part of auditing the annual financial statements. As far as the corporate bond that was issued in 2013 and existing bank credit facilities are concerned, it cannot be excluded that one or several of the financial covenants included in the bond and credit facility terms cannot be complied with in the 2013 financial year.

This might result in a special right of cancellation for the respective investors. If this were to occur, the company plans to convene a bondholders’ meeting to coordinate a corresponding amendment to the bond terms. The company would also examine other refinancing options in such an instance. “Due to the strong operational situation of MIFA, we do not expect any problems to pay interest on the outstanding bonds in August,” Barth added.

Financial history

In 2012 MIFA sold around 546,000 bicycles. The company generated 111.3 million euro of sales revenue, up 10.7 % compared with the previous year. E-bikes represented 30.0 % of total revenue. On this revenue base, the company achieved operating profit (EBIT) adjusted for acquisition effects of 2.9 million euro, and correspondingly adjusted net income stood at 1.1 million euro.

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