TORONTO, Nov. 14, 2018 /CNW/ - Boyuan Construction
Group, Inc. ("Boyuan" or the "Company") (TSX: BOY), an established
China-based construction and
engineering company, today reported strong first quarter financial
results for the three-month period ended September 30, 2018.
All figures are in U.S. dollars unless otherwise stated.
First Quarter 2019 Highlights
- Revenue grew 52.3% to $94.3
million;
- Gross profit increased 26.4% to $7.3
million;
- Earnings significantly improved, with net income increasing
64.3% to $3.9 million;
- Commenced construction on four material projects with an
aggregate contract value of $81.1
million.
Highlights Subsequent to Year End
- As announced on October 29, 2018,
commenced construction on three new residential projects with
combined contract values of $54.9
million.
"Our continued strong financial performance was partially based
on the execution of new residential and commercial contracts
announced during the quarter and demonstrates the strong reputation
that we are developing in our core market of Jiaxing and its
surrounding area," said Mr. Cai Liang
Shou. "The significant project awards announced during the
quarter and another $54.9 million in
new residential projects announced subsequent to quarter end, are
indicative of the strong markets in select smaller centres, which
Boyuan is well-positioned to participate in going forward."
Selected First Quarter Financial Results
In thousands
except share and % data
|
Q1
2019
|
Q1
2018
|
Change
|
Revenue
|
$94,280
|
$61,909
|
52.3%
|
Gross
profit
|
$7,254
|
$5,739
|
26.4%
|
Gross profit
margin
|
7.7%
|
9.3%
|
(17.2%)
|
EBITDA1
|
$7,659
|
$5,100
|
50.2%
|
Net income
|
$3,855
|
$2,347
|
64.3%
|
Earnings per share –
diluted
|
$0.13
|
$0.08
|
62.5%
|
In thousands
except % data
|
Sept. 30,
2018
|
June 30,
2018
|
Change
|
Total
Assets
|
$269,131
|
$272,617
|
(1.3%)
|
Cash, cash
equivalents & restricted cash
|
$15,967
|
$15,783
|
1.2%
|
______________________________
|
1 EBITDA
is defined as earnings before interest, income taxes, depreciation
and amortization. EBITDA is not a defined performance measure under
IFRS.
|
Review of First Quarter 2019 Financial Results
Revenue for the quarter increased 52.3% to $94.3 million compared to $61.9 million for the same period last year.
Revenue continued to benefit from the relatively robust real estate
market in Jiaxing and its surrounding area in Zhejiang province. The Company commenced
construction on four material new projects with an aggregate
contract value of $81 million during
the quarter.
Cost of construction was $87.0
million for the quarter, up 54.8% from $56.2 million in the first quarter of last year.
The increase was primarily a result of higher expenses associated
with larger project volume. Direct material costs were $59.5 million and labour costs were $24.7 million in the quarter, compared with
direct material costs and labour costs of $37.3 million and $15.9
million respectively in the same quarter last year.
Gross profit for the quarter was $7.3
million, or 7.7% of revenue. Gross profit for the same
period last year was $5.7 million, or
9.3% of revenue. The Company is continuing to experience some
downward pressure on its margins.
There was an impairment recovery on deposits of $0.3 million that was included in the G&A
expenses in the first quarter last year. There was no such recovery
in the current quarter. G&A expenses were $1.52 million in the first quarter of this year,
compared to $1.03 million in the
first quarter of last year. The increase was mainly due to the
impairment recovery on deposits recorded in the first quarter of
last year.
Other income was $1.20 million for
the quarter, compared to $1.19
million in the same period last year. Accretion income from
the discount on non-current accounts receivable and unbilled
revenue of $1.09 million and
$1.16 million was recorded in other
income for the periods ended September 30,
2018 and 2017 respectively.
In the first quarter, the Company has reversed an impairment
loss on contract assets and accounts receivable of $0.39 million and 0.08 million respectively on
previously impaired accounts. This is net of additional impairment
loss of $0.24 million as a result of
the application of IFRS 9 in the current period. In comparison, the
Company had an impairment loss of $1.2
million on accounts receivable and reversed an impairment
loss on unbilled revenue of $0.08
million in the same quarter last year.
Interest expense for the quarter was $2.0
million compared to $1.8
million a year ago. The increase was mainly due to the
additional interest paid on the larger amount of bank notes payable
in the period.
Net income of $3.9 million, or
$0.13 per diluted share, for the
quarter compares to $2.3 million, or
$0.08 per diluted share for the same
period the prior year. The increase was principally due to the
increase in revenue as a result of the larger number of new
projects taken up in the past year.
Boyuan had working capital of $49.1
million, including cash, cash equivalents, and restricted
cash totalling $16.0 million as at
September 30, 2018. This compares to
$53.3 million and $15.8 million, respectively at June 30, 2018.
Boyuan's consolidated statements for the three-month period
ended September 30, 2018 and related
management's discussion and analysis (MD&A) will be filed with
securities regulatory authorities within applicable timelines and
will be available via SEDAR at www.sedar.com.
Conference Call Notice
A conference call for analysts and investors will be held at
9:30 A.M. (ET) on Thursday, November 15,
2018, to discuss the quarterly results. All interested
parties can join the conference call by dialing 1-888-231-8191 or
647-427-7450. Please connect approximately 15 minutes prior to the
beginning of the call to ensure participation. The conference call
will be archived for replay until Thursday,
November 22, 2018 at 11:59 P.M.
(ET). To access the archived conference call, dial
1-855-859-2056 or 416-849-0833 and enter the reservation number
4586739#.
About Boyuan Construction Group, Inc.
Backed by a longstanding track record, Boyuan Construction
Group, Inc. ("Boyuan" or the "Company") has the knowledge and
expertise to design and build a wide range of commercial and
residential developments, as well as municipal infrastructure and
engineering projects. Based in Jiaxing City and with a growing
presence in both Zhejiang Province
and Hainan Province, Boyuan
focuses on construction projects in China's fast-growing regions of the Yangtze
River Delta and the Hainan
Province. The Company's current project backlog includes
residential, commercial, industrial and mixed-use developments. For
more information visit www.boyuangroup.com.
Caution Regarding Forward-Looking Information:
Certain information contained in this press release constitutes
forward-looking information, which is information relating to
future events or the Company's future performance and which is
inherently uncertain. All information other than statements of
historical fact may be forward-looking information. Forward-looking
information is often, but not always, identified by the use of
words such as "seek", "anticipate", "budget", "plan", "continue",
"estimate", "expect", "forecast", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar words or phrases (including
negative variations) suggesting future outcomes or statements
regarding an outlook. Forward-looking information contained in this
press release includes, but is not limited to, management's
expectation to comply with the Alternative Information Guidelines.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information. The Company believes the expectations
reflected in the forward-looking information are reasonable but no
assurance can be given that these expectations will prove to be
correct and readers are cautioned not to place undue reliance on
forward-looking information contained in this press release. Some
of the risks and other factors which could cause results to differ
materially from those expressed in the forward-looking information
contained in this press release include, but are not limited to:
risk of a general cease trade order bing issued, risk of risk of
macro-economy cycle, risk from competition, risk from insufficient
marketing to secure new projects, risk in obtaining additional
financing, risk involving permits and licences, reliance on key
management member, risk from supply of raw materials, risk of
financial leverage, risk of bad debts in accounts receivables, risk
involved in real estate development, foreign exchange fluctuations,
political and economic conditions in China and other risks included in the
Company's AIF for the fiscal year ended June
30, 2018 and in the Company's public disclosure documents
filed with certain Canadian securities regulatory authorities and
available at www.sedar.com. The forward-looking information
contained in this press release are made as of the date hereof and
the Company undertakes no obligation to update publicly or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, except as otherwise
required by law.
SOURCE Boyuan Construction Group, Inc.