TORONTO, Feb. 14, 2018 /CNW/ - Boyuan Construction
Group, Inc. (TSX: BOY, BOY.DB.A) ("Boyuan" or the
"Company"), a growing construction company in China of commercial, residential and municipal
infrastructure projects, today reported its financial results
for the three-month period ended December 31, 2017. All
figures are in U.S. dollars unless otherwise stated.
Selected Quarterly Highlights
In thousands
except share and % data
|
Q2'18
|
Q2'17
|
Change
|
Revenue
|
$66,538
|
$60,757
|
9.5%
|
Gross
profit
|
$3,478
|
$4,465
|
(22.1%)
|
Gross profit
margin
|
5.2%
|
7.3%
|
(28.9%)
|
EBITDA1
|
$3,015
|
$4,606
|
(34.5%)
|
Net income
|
$256
|
$1,426
|
(82.0%)
|
Earnings per share -
diluted
|
$0.01
|
$0.06
|
(83.3%)
|
|
December 31,
2017
|
June 30,
2017
|
|
Total
Assets
|
$242,885
|
$216,651
|
12.1%
|
Cash, cash
equivalents and restricted cash
|
$12,737
|
$10,821
|
17.7%
|
"Boyuan remains focused on disciplined execution in our core
markets and being selective in taking on new construction
projects," stated Mr. Cai Liang
Shou, Chairman of Boyuan Construction Group. "In the second
quarter of fiscal 2018 we have initiated construction of two
projects in the city of Jiaxing with an aggregate contract value of
$26.1 million."
Q2 FY2018 Financial and Operational Highlights
- Revenue of $66.5 million, up 9.5%
from $60.8 million for Q2'17
- Gross profit of $3.5 million,
representing a gross margin of 5.2%, down from $4.5 million and 7.3% respectively
- EBITDA of $3.0 million, compared
with $4.6 million in Q2'17
- Net income of $0.3 million,
compared with $1.4 million for
Q2'17
- Initiated construction on two new projects in Jiaxing,
Zhejiang Province, with a total
value of $26.1 million
_________________________
|
1 EBITDA
is defined as earnings before interest, income taxes, depreciation
and amortization. EBITDA is not a defined performance measure under
IFRS.
|
Review of Financial Results
Revenue for the second quarter ended December 31, 2017 was $66.5 million, an increase of $5.7 million or 9.5% from the corresponding
period last year. Revenue is recognized on the
percentage-of-completion method.
Cost of construction for Q2 FY2018 was $63.1 million, up 12.0% from $56.3 million for Q2 FY2017. Cost of construction
includes all direct material, labour, subcontract and other related
costs, such as equipment repairs. The two major components of the
cost of construction are direct material and labour costs. Direct
material costs were $43.0 million and
labour costs were $16.6 million in
this quarter. In comparison, direct material costs and labour costs
were $39.6 million and $13.9 million respectively in the same quarter
last year.
Gross profit for Q2 FY2018 was $3.5
million, representing a margin of 5.2% on revenue. Gross
profit for Q2 FY2017 was $4.5
million, representing a margin of 7.3% on revenue. The lower
gross margin for this period was due to the relatively depressed
state the real estate markets in recent years, as well as due to
the larger discount amount applied to the non-current unbilled
revenue and accounts receivable compared to the same period last
year.
Other income was $1.2 million in
Q2 FY2018, compared to $1.5 million
in Q2 FY2017. The major component of other income is the accretion
income from the discount on non-current accounts receivable and
unbilled revenue. Accretion income was $1.2
million in Q2 FY2018 and $1.5
million in Q2 FY2017.
G&A expenses were $1.4 million
in Q2 FY2018, compared with $1.4
million in Q2 FY2017.
The Company recognized impairment losses on a few long
outstanding accounts receivable in this period. The impairment
losses recognized were partially offset by the recovery of several
unbilled revenue accounts. Net impairment loss for Q2 FY2018 was
$0.6 million, compared with
$0.7 million for Q2 FY2017.
Interest expense was $1.8 million
in Q2 FY2018, up from the interest expense of $1.6 million in the same period last year. The
increase was mainly due to the increase in the bank notes payable
amount.
After-tax net income for Q2 FY2018 was $0.3 million, or $0.01 per diluted share, compared to $1.4 million, or $0.06 per diluted share, for Q2 FY2017.
The Company had working capital of $40.2
million, including cash, cash equivalents, and restricted
cash totalling $12.7 million for the
period ended December 31, 2017. This
compares to $49.5 million and
$10.8 million, respectively, at
June 30, 2017.
Boyuan's consolidated statements for the three-month period
ended December 31, 2017 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
The Company will hold a conference call to discuss its second
quarter 2018 financial results on Wednesday,
February 14, 2018 at 9:30 A.M.
(ET). Mr. Paul Law, Boyuan's
Chief Financial Officer, will host the call.
All interested parties can join the call by dialing 647-427-7450
or 1-888-231-8191. Please dial in 15 minutes prior to the call to
secure a line.
The conference call will be archived for replay until
Wednesday, February 21, 2018 at
midnight. To access the archived conference call, please dial
1-855-859-2056 or 416-849-0833 and enter the reservation number
8898457#.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China,
Boyuan Construction Group, Inc. is in the business of commercial
building and residential construction, municipal infrastructure and
engineering projects. In its last three fiscal years ending
June 30, 2017, Boyuan completed 42
projects for a number of private and public-sector clients.
Boyuan's current project backlog includes residential, commercial,
industrial and mixed-use developments. From its operating bases in
Zhejiang Province and in
Hainan Province, Boyuan focuses on
construction projects in China's
fast-growing regions of the Yangtze River Delta and the
Hainan Province. 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, 2017 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.