Exhibit
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Description
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TRINITY BIOTECH PLC
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Trinity Biotech plc
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(Registrant)
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By:
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/s/ John Gillard
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John Gillard
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Chief Financial Officer
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Contact:
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Trinity Biotech plc
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Lytham Partners, LLC
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John Gillard
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Joe Diaz
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(353)-1-2769800
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(1)-602-889-9700
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E-mail: investorrelations@trinitybiotech.com
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• |
Total revenue for fiscal Q1, 2023 was $17.2m. Excluding our Covid focused PCR Viral Transport Media (“VTM”) products and Fitzgerald Industries (which was disposed in April 2023), revenue for the quarter of $14m was 2.0% higher than in
Q1, 2022.
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Our performance in the quarter was led by year over year growth of approximately 35%, 15% and 10% respectively for our Autoimmune, Clinical Chemistry and diabetes HbA1c consumable products. Strong demand from key accounts and a focus on
clearing order backlogs drove an increase of over 80% in revenues for US Autoimmune products compared to Q1, 2022 and an approximately 45% increase in deliveries for diabetes consumables in Brazil compared to Q1, 2022. Partly offsetting
these revenue gains are lower revenues from low margin diabetes instrument deliveries, compared to Q1 2022. Diabetes instrument placements were up approximately 17% in Q1, 2023 vs Q4, 2022.
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Gross margin, excluding Fitzgerald Industries, was broadly flat compared to Q1, 2022 but reflected an approximately 4-point improvement over Q4 2022 as we increase prices and stabilize our manufacturing and supply
chain processes.
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We continue to work closely with the FDA to gain clearance of our 510(k) submission for the Premier Resolution Haemoglobin Variants instrument. In addition to a US market introduction in the second half of the year, we expect FDA
approval will drive significant global order activity.
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• |
The development of the next generation of our flagship diabetes HbA1c instrument, the Premier 9210, is on track for an expected roll-out in 2024. The instrument is expected to feature an improved, backward compatible reagent column
system that should feature up to 3 times the injection capacity and stability, limited calibration, improved user interface and lab system integration. This is the first step of a multi-generational product development plan aimed at
expanding the target market, driving lower service downtime and cost, while significantly expanding operating margins.
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China and Brazil are markets of particular focus for both product lines as we assess increasing our footprint in both markets to drive cost competitiveness, streamline regulatory pathways and expand market access.
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The Company is focused on executing on the launch and distribution of its TrinScreen HIV screening test, following the announcement by the Kenyan Ministry of Health of the adoption of the new HIV rapid testing algorithm. This algorithm
establishes Trinity Biotech’s TrinScreen HIV as the standard screening test in Kenya under World Health Organisation (“WHO”) guidelines.
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The Kenyan government is currently addressing legal challenges to the HIV testing algorithm changes and we expect to receive significant orders in the second half of 2023 upon resolution of these legal matters.
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The Kenyan HIV screening program is one of the largest in Africa, with an estimated 7 million to 9 million screening tests annually.
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In April, the Company completed the sale of its Fitzgerald Industries division, generating approximately $30M of proceeds that were partially used to further reduce debt by approximately $10M.
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This exit is the first of several strategic moves aimed at focusing the current portfolio around our core Haemoglobins and HIV franchises, streamlining our cost structure, reducing debt and providing firepower for M&A.
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Our pipeline of attractive M&A opportunities is aimed at disruptive adjacencies with Total Addressable Markets (TAMs) that matter, provide access to next generation diagnostic product platforms and where we can leverage our global
manufacturing and distribution footprint.
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In February, the Company secured a $20 million flexible term-facility specifically to provide the ability to move quickly when opportunistic transactions arise.
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Multiple initiatives are underway to significantly reduce cost of goods sold in our core Haemoglobins and HIV franchises. Instrument and consumables design updates, supply chain optimization and outsourced/localized manufacturing are
initiatives all aimed at driving significantly higher operating margins for these platforms.
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Trinity Biotech will participate in the American Association of Clinical Chemistry (AACC) annual scientific meeting and clinical lab expo which takes place in Anaheim, CA from July 23 -27.
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2023
Quarter 1
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2022
Quarter 1
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Increase/
(decrease)
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US$’000
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US$’000
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%
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Clinical Laboratory
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12,669
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13,511
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(6.2)%
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Point-of-Care
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2,160
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2,164
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(0.2)%
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Total
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14,829
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15,675
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(5.4)%
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A higher IFRS driven non-cash share-based payments accounting charge, which increased by $1.2m in Q1, 2023 compared to Q1, 2022, due to options granted since Q1, 2022.
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An increase in foreign exchange loss largely related to the accounting driven requirement to mark-to-market Euro-denominated lease liabilities for right-of-use assets. In Q1, 2022, the foreign exchange gain on leases was $0.1m while in
Q1, 2023, a foreign exchange loss of $0.2m was recorded, resulting in an unfavourable quarter-on-quarter variance of $0.3m.
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Higher salary costs as a result of senior hires made in late 2022 as part of our continued development of a world class leadership team that can lead the transformation of Trinity Biotech into a high growth, efficient and agile
organisation.
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A continued increase in travel costs post COVID-related travel restrictions, as our sales and marketing teams travel to customers and trade shows as we continue to revitalise our sales activities. Similarly, some key functional leaders
based in Ireland have resumed visits to our overseas facilities as we seek to drive operational efficiencies. All of this has led to an increase in travel costs in Q1, 2023, compared to Q1, 2022, of approximately $0.2m. Management believes
this is a worthwhile and important investment, but we do not expect the level of travel to stay at this level going forward.
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Savings on non-recurring transactional costs incurred in Q1, 2022 of $0.5m were offset by higher legal and professional fees for due diligence, corporate development and corporate finance activities as we continue to assess strategic
opportunities for inorganic growth and balance sheet optimisation.
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Q1, 2023
US$’m
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Q1, 2022
US$’m
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Loss on disposal of Exchangeable Notes
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–
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9.7
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Term loan interest
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2.1
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2.0
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Convertible note interest
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0.3
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–
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Exchangeable note interest
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–
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0.4
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Notional interest on lease liabilities for Right-of-use assets
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0.2
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0.2
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Other
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–
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–
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2.6
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12.2
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$m
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Operating loss
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(3.9)
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Depreciation
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0.3
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Amortisation
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0.3
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Adjusted EBITDA for continuing operations
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(3.3)
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Share option expense
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1.4
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Adjusted EBITDASO for continuing operations
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(2.0)
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(US$000’s except share data)
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Three
Months Ended
March 31, 2023
US$000
(unaudited)
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Three
Months Ended
March 31, 2022
US$000
(unaudited)
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Revenues
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14,829
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15,675
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Cost of sales
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(9,256
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)
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(9,693
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)
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Gross profit
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5,573
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5,982
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Gross margin %
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37.6
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%
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38.2
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%
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Other operating income
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–
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1
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Research & development expenses
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(860
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)
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(965
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)
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Selling, general and administrative expenses
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(8,632
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)
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(6,234
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)
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Operating Loss
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(3,919
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)
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(1,216
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)
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Financial income
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154
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218
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Financial expenses
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(2,551
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)
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(12,222
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)
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Net financial expense
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(2,397
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)
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(12,004
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)
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Loss before tax
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(6,316
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)
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(13,220
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)
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Income tax credit
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11
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150
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Loss for the period on continuing operations
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(6,305
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)
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(13,070
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)
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Profit for the period on discontinued operations
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496
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791
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Loss for the period (all attributable to owners of the parent)
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(5,809
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)
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(12,279
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)
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Loss per ADS (US cents)
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(15.2
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)
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(50.0
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Diluted loss per ADS (US cents)
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(15.2
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)
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(50.0
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Weighted average no. of ADSs used in computing basic earnings per ADS
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38,158,460
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24,575,333
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Weighted average no. of ADSs used in computing diluted earnings per ADS
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38,158,460
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24,575,333
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March 31,
2023
US$ ‘000
(unaudited)
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December 31,
2022
US$ ‘000
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ASSETS
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Non-current assets
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Property, plant and equipment
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5,496
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5,682
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Goodwill and intangible assets
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21,330
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35,269
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Financial asset1
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1,500
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–
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Deferred tax assets
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4,297
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4,218
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Derivative financial asset
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152
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128
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Other assets
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120
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139
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Total non-current assets
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32,895
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45,436
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Current assets
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Assets included in disposal group held for sale
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17,746
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–
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Inventories
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21,532
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22,503
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Trade and other receivables
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13,594
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15,753
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Income tax receivable
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1,858
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1,834
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Cash, cash equivalents and deposits
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3,532
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6,578
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Total current assets
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58,262
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46,668
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TOTAL ASSETS
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91,157
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92,104
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EQUITY AND LIABILITIES
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Equity attributable to the equity holders of the parent
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Share capital
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1,967
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1,963
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Share premium
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46,532
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46,458
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Treasury shares
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(24,922
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)
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(24,922
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)
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Accumulated deficit
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(31,140
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)
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(26,695
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)
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Translation reserve
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(5,787
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)
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(5,775
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)
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Equity component of convertible note
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6,709
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6,709
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Other reserves
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23
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86
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Total deficit
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(6,618
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)
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(2,176
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)
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Current liabilities
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||||||||
Liabilities included in disposal group held for sale
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1,386
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–
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Income tax payable
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33
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28
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Trade and other payables
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12,910
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15,375
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Exchangeable senior note payable
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210
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210
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Provisions
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50
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50
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Lease liabilities
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1,561
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1,676
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Total current liabilities
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16,150
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17,339
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Non-current liabilities
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||||||||
Senior secured term loan
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49,199
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44,301
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Derivative financial liability
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1,517
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1,569
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Convertible note
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13,936
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13,746
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Lease liabilities
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12,026
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12,267
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Deferred tax liabilities
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4,947
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5,058
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Total non-current liabilities
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81,625
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76,941
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TOTAL LIABILITIES
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97,775
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94,280
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TOTAL EQUITY AND LIABILITIES
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91,157
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92,104
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Three
Months
Ended
March 31, 2023
US$000
(unaudited)
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Three
Months
Ended
March 31, 2022
US$000
(unaudited)
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Cash flows from operating activities
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||||||||
Loss for the period
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(5,809
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)
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(12,279
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)
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Adjustments to reconcile loss to cash used in operating activities:
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Depreciation
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351
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432
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Amortisation
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251
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228
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||||||
Income tax credit
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(11
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)
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(150
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)
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Financial income
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(154
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)
|
(218
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)
|
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Financial expense
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2,551
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12,222
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||||||
Share-based payments
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1,364
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197
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||||||
Foreign exchange (gains)/losses on operating cash flows
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(89
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)
|
42
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Other non-cash items
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195
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(691
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)
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Operating cash outflows before changes in working capital
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(1,351
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)
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(217
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)
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Net movement on working capital
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(1,364
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)
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(1,263
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)
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Cash used in operations before income taxes
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(2,715
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)
|
(1,480
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)
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Income taxes paid
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(3
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)
|
(13
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)
|
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Net cash used in operating activities
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(2,718
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)
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(1,493
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)
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Cash flows from investing activities
|
||||||||
Payments to acquire intangible assets
|
(355
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)
|
(1,553
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)
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Payments to acquire financial assets
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(700
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)
|
–
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|||||
Acquisition of property, plant and equipment
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(274
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)
|
(162
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)
|
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|
||||||||
Net cash used in investing activities
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(1,329
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)
|
(1,715
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)
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|
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Cash flows from financing activities
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||||||||
Net proceeds from new senior secured term loan
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4,853
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80,015
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||||||
Expenses paid in connection with debt financing
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-
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(2,316
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)
|
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Purchase of exchangeable notes
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-
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(86,730
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)
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Interest paid on senior secured term loan
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(2,567
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)
|
(1,786
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)
|
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Interest paid on convertible note
|
(75
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)
|
-
|
|||||
Interest payment on exchangeable notes
|
(4
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)
|
(1,285
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)
|
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Payment of lease liabilities
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(599
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)
|
(770
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)
|
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|
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Net cash provided by/(used in) financing activities
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1,608
|
(12,872
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)
|
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|
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Decrease in cash and cash equivalents
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(2,439
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)
|
(16,080
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)
|
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Effects of exchange rate movements on cash held
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14
|
182
|
||||||
Cash and cash equivalents at beginning of period
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6,578
|
25,910
|
||||||
|
||||||||
Cash and cash equivalents at end of period
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4,153
|
10,012
|