TORONTO, Feb. 14, 2019 /CNW/ - Boyuan Construction Group,
Inc. ("Boyuan" or the "Company") (TSX: BOY), an established
China-based construction and
engineering company, today reported strong second quarter financial
results for the three month period ended December 31, 2018.
All figures are in U.S. dollars unless otherwise stated.
Second Quarter 2019 Highlights
- Revenue grew 46.2% to $97.2
million;
- Gross profit increased 136.5% to $8.2
million;
- Earnings significantly improved, with net income increasing to
$4.4 million; from $256 thousand in the same period of last
year
- Commenced construction in the quarter on three additional
material projects with an aggregate contract value of $54.9 million.
"Strong revenue growth and a smaller discount amount applied to
non-current unbilled revenue and accounts resulted in a 136.5%
increase in our gross profit, and ultimately contributed to our net
income of $4.4 million for the
quarter," said Mr. Cai Liang Shou,
Chairman and CEO of Boyuan Construction Group. "We remain very
well-positioned in our core market of Jiaxing and its surrounding
area and have benefited from our continued execution on new
residential and commercial contracts in select smaller centres.
During the quarter, we announced that we had commenced construction
on three material new projects with an aggregate contract value of
$54.9 million. These projects
included a 104,967 square meter residential development in Yancheng
City in Jiangsu Province; a 70,404
square meter residential development in Pinghu City in Zhejiang Province; and a 62,886 square meter
residential development in Tongxiang City. "
Selected Second Quarter Financial Results
In thousands
except share and %
data
|
Q2
2019
|
Q2
2018
|
Change
|
Revenue
|
$97,199
|
$66,538
|
46.1%
|
Gross
profit
|
$8,227
|
$3,478
|
136.5%
|
Gross profit
margin
|
8.5%
|
5.2%
|
63.5%
|
EBITDA1
|
$7,028
|
$3,015
|
133.1%
|
Net income
|
$4,392
|
$256
|
1,615.6%
|
Earnings per share –
diluted
|
$0.17
|
$0.01
|
1,600.0%
|
In thousands
except % data
|
Dec. 31,
2018
|
June 30,
2018
|
Change
|
Total
Assets
|
$279,910
|
$272,617
|
2.7%
|
Cash,
cash equivalents & restricted cash
|
$15,898
|
$15,783
|
0.7%
|
____________________________________
|
1
|
EBITDA is defined as
earnings before interest, income taxes, depreciation and
amortization. EBITDA is not a defined performance measure under
IFRS.
|
Review of Second Quarter 2019 Financial Results
Revenue for the second quarter increased 46.1% to $97.2 million compared to $66.5 million for the same period last year. The
company attributes this growth to its continued focus on robust
real estate markets in smaller centres, including Jiaxing,
Zhejiang province and surrounding
area.
Cost of construction for Q2 FY2019 was $89.0 million, an increase of 41.1% from
$63.1 million for Q2 FY2018. The two
major components of the cost of construction are direct material
and labour costs. Direct material costs were $62.2 million and labour costs were $22.2 million in this quarter, compared to
$43.0 million and $16.6 million respectively in the same quarter
last year.
Gross profit for the quarter was $8.2
million, or 8.5% of revenue. Gross profit for the same
period last year was $3.5 million, or
5.2% of revenue. The higher gross margin for this period was due to
the smaller discount amount applied to the non-current unbilled
revenue and accounts receivable compared to the same period last
year.
Other income was $1.1 million for
the quarter, compared to $1.2 million
in the same period last year. Accretion income from the discount on
non-current accounts receivable and unbilled revenue of
$1.1 million and $1.2 million was recorded for the periods ended
December 31, 2018 and 2017
respectively.
G&A expenses were $1.4 million
in the quarter, in line with the same period in the prior year. The
Company had a net impairment loss of $1.2
million for the quarter. The impairment loss recognized in
the quarter was driven by long outstanding account receivable from
a project in Hainan. For the same periods last year, net
impairment loss recognized were $0.6
million.
Interest expense for the quarter was $1.0
million compared to $1.8
million a year ago. The decrease in interest expense was
mainly due to the decrease in the bank notes payable amount and the
decrease in convertible debentures amount.
The after-tax net income for the quarter was $4.4 million, or $0.17 per diluted share, compared to $0.3 million, or $0.01 per diluted share for the same period the
prior year.
Boyuan had working capital of $49
million, including cash, cash equivalents, and restricted
cash totaling $15.9 million as at
December 31, 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 and
six-month period ended December 31,
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 on
Friday, February 15, 2019 at
9 a.m. ET, 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 February 22, 2019 at
11:59 PM (ET). To access the archived
conference call, dial 1-855-859-2056 or 416-849-0833 and enter the
reservation number 6455814.
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.