SINGAPORE, Aug. 10, 2018 /PRNewswire/ -- China
Yuchai International Limited (NYSE: CYD) ("China Yuchai"
or the "Company"), a leading manufacturer and distributor of
engines for on-road and off-road applications in China through its main operating subsidiary,
Guangxi Yuchai Machinery Company Limited ("GYMCL"), announced today
its unaudited consolidated financial results for the second quarter
and first six months ended June 30, 2018. The financial
information presented herein for the second quarters of 2018 and
2017 is reported using International Financial Reporting Standards
as issued by the International Accounting Standards Board.
The comparative figures for the second quarter and first six
months ended June 30, 2017 were
restated due to the adoption of IFRS 15 from January 1, 2018, on Revenue from
Contracts with Customers by a full retrospective
application. The financial impact on the adoption of IFRS 15
is described and attached at the end of the press release.
Financial Highlights for the Second Quarter of 2018
- Net revenue was RMB 4.2 billion
(US$ 635.5 million) compared with
RMB 4.1 billion in the second quarter
of 2017;
- Gross profit was RMB 769.0
million (US$ 116.2 million),
an 18.3% gross margin compared with RMB
724.0 million and a gross margin of 17.8% in the second
quarter of 2017;
- Operating profit increased by 12.2% to RMB 274.5 million (US$
41.5 million) and the operating margin rose to 6.5% compared
with 6.0% in the same quarter last year;
- Net earnings attributable to China Yuchai's shareholders
decreased by 1.3% to RMB 132.1
million (US$ 20.0 million)
compared with RMB 133.9 million in
the second quarter of 2017;
- Basic and diluted earnings per share were RMB 3.23 (US$ 0.49)
compared with RMB 3.29 for the same
quarter last year;
- Total number of engines sold increased by 11.1% to 100,675
units compared with 90,638 units in the second quarter of
2017.
Net revenue for the second quarter of 2018 increased by 3.2% to
RMB 4.2 billion (US$ 635.5 million) compared to RMB 4.1 billion in the second quarter of
2017.
The total number of engines sold by GYMCL during the second
quarter of 2018 was 100,675 units compared with 90,638 units in the
same quarter last year, an increase of 11.1%. The increase was
mainly due to increased engine sales to the truck and off-road
segments, particularly the agriculture application and was
partially offset by the decrease in the bus segment. In
addition, Company's sales in the power-generation and the
industrial equipment applications increased as compared with the
same quarter last year.
According to data reported by the China Association of
Automobile Manufacturers ("CAAM") (excluding sales of gasoline
powered and electric vehicles), in the second quarter of 2018,
sales of buses decreased by 3.1% while truck sales increased by
12.1%. According to CAAM, in the second quarter of 2018, sales of
commercial vehicles (excluding sales of gasoline powered and
electric vehicles) increased by 10.3% compared to the same quarter
last year.
Gross profit increased by 6.2% to RMB
769.0 million (US$ 116.2
million) compared with RMB
724.0 million in the second quarter of 2017. Gross
margin was 18.3% compared with 17.8% in the same quarter last year.
The increase was mainly attributable to changes in the product
mix.
Other operating income was RMB
33.7 million (US$ 5.1
million), compared with RMB
48.6 million in the second quarter of 2017. The
decrease was mainly due to foreign exchange revaluation losses in
the second quarter of 2018 compared to a gain in the same quarter
last year, and partly offset by higher bank interest income in the
second quarter of 2018.
Research and development ("R&D") expenses increased by 38.4%
to RMB 156.5 million
(US$ 23.6 million) compared with
RMB 113.0 million in the second
quarter of 2017. The increase was primarily due to higher staff
wages, consultancy fees and testing-related expenses for new
engines. In the second quarter of 2018, the Company incurred
higher R&D expenses to further develop engine products
compliant with China's National VI
emission standards for the truck and bus segments, and Tier 4
off-road product offerings. The Company also continued with its
initiatives to improve engine performance and quality especially in
the area of emission controls. As a percentage of revenue, R&D
expenses increased to 3.7% compared with 2.8% in the second quarter
of 2017.
Selling, general and administrative ("SG&A") expenses
decreased by 10.4% to RMB 371.8
million (US$ 56.2 million)
from RMB 414.8 million in the
second quarter of 2017. The decrease primarily resulted from lower
warranty and freight charges, reversal of allowance for doubtful
trade receivables and indirect taxes in the second quarter of 2018.
SG&A expenses represented 8.8% of revenue compared with 10.2%
in the same quarter last year.
Operating profit increased by 12.2% to RMB 274.5 million (US$ 41.5 million) from RMB
244.7 million in the second quarter of 2017. The
operating margin was 6.5% compared with 6.0% in the second quarter
of 2017.
Finance costs increased to RMB
29.6 million (US$ 4.5
million) from RMB
16.5 million in the second quarter of 2017. Higher
finance costs mainly resulted from higher borrowings and bills
discounting compared with the second quarter of 2017.
Net profit attributable to China Yuchai's shareholders was
RMB 132.1 million (US$ 20.0 million), compared with RMB 133.9 million in the same quarter last
year.
Basic and diluted earnings per share were RMB 3.23 (US$
0.49), compared with RMB 3.29
in the same quarter last year.
Basic earnings per share in the second quarter of 2018 was based
on a weighted average of 40,858,290 shares, and diluted earnings
per share was based on a weighted average of 40,872,405 shares
compared with 40,712,100 shares in the same quarter last year.
Financial Highlights for the first Six Months ended
June 30, 2018
- Net revenue was RMB 8.5 billion
(US$ 1.3 billion) compared with
RMB 8.6 billion in the same period
last year;
- Gross profit was RMB 1.6 billion
(US$ 245.2 million), a 19.0% gross
margin, compared with RMB 1.6 billion
and a gross margin of 18.3% in the first six months of 2017;
- Operating profit was RMB 698.7
million (US$ 105.6 million)
compared with RMB 674.9 million in
the same period last year;
- Basic and diluted earnings per share were RMB 9.18 (US$ 1.39)
and RMB 9.17 (US$ 1.39) respectively compared with
RMB 9.39 in the same period last
year;
- Total number of engines sold was 210,788 units compared with
210,648 units in the same period last year.
Net revenue was RMB 8.5 billion
(US$ 1.3 billion) compared with
RMB 8.6 billion in the same period
last year.
The total number of engines sold by GYMCL in the first half of
2018 was 210,788 units compared with 210,648 units in the same
period last year. The increase was mainly due to increased engine
sales in the truck and off-road segments, particularly industrial
engines, and partly offset by the decrease in the bus segment and
agriculture application.
Gross profit was RMB 1.6 billion
(US$ 245.2 million), same as in the
same period last year. Gross margin increased to 19.0% as compared
with 18.3% a year ago. These increases were mainly attributable to
changes in the product mix.
Other operating income was RMB
84.2 million (US$ 12.7
million) compared with RMB 88.2
million in the same period last year.
R&D expenses were RMB
276.4 million (US$ 41.8
million) compared with RMB
237.6 million in the same period in 2017. The Company
continued with its initiatives to develop new engines compliant
with China's next emission
standards, National VI and Tier 4, as well as to improve engine
performance and quality for the current portfolio of engines. As a
percentage of revenue, R&D spending was 3.2% in the first six
months of 2018 compared with 2.8% in the same period last year.
SG&A expenses decreased to RMB
731.7 million (US$ 110.6
million) from RMB
755.7 million in the same period last year. The
decrease was mainly due to lower warranty expenses and freight
charges, and a reversal of allowance for doubtful trade receivables
compared with the same period last year. SG&A expenses
represented 8.6% of the net revenue for the 2018 period and 8.8% in
the same period last year.
Operating profit increased to RMB
698.7 million (US$ 105.6
million) from RMB
674.9 million in the same period in 2017. The increase
was mainly due to higher gross profit and lower SG&A expenses,
partly offset by higher R&D expenses. The operating margin was
8.2% compared with 7.8% in the same period last year.
Finance costs increased to RMB
52.1 million (US$ 7.9
million) from RMB
43.3 million in the same period last year, an increase
of approximately RMB 8.8
million. Higher finance costs mainly resulted from an
increase in borrowings.
Net profit attributable to China Yuchai's shareholders was
RMB 375.0 million (US$ 56.7 million) compared with RMB 382.4 million in the same period last
year.
Basic and diluted earnings per share were RMB 9.18 (US$ 1.39)
and RMB 9.17 (US$ 1.39) respectively, compared with basic and
diluted earnings per share of RMB
9.39 in the same period last year.
Basic earnings per share in the six months of 2018 was based on
a weighted average of 40,858,290 shares, and diluted earnings per
share was based on a weighted average of 40,888,876 shares,
compared with 40,712,100 shares in the same period last year.
Balance Sheet Highlights as at June 30, 2018
- Cash and bank balances were RMB 6.5
billion (US$ 982.4 million)
compared with RMB 6.0 billion at the
end of 2017;
- Trade and bills receivables were RMB 8.3
billion (US$ 1.3 billion)
compared with RMB 7.0 billion at the
end of 2017;
- Inventories were RMB 2.0 billion
(US$ 305.1 million) compared with
RMB 2.6 billion at the end of
2017;
- Trade and bills payables were RMB 5.3
billion (US$ 806.2 million)
compared with RMB 5.2 billion at the
end of 2017;
- Short-term and long-term bank borrowings were RMB 1.8 billion (US$ 275.0
million) compared with RMB 1.6
billion at the end of 2017.
Mr. Weng Ming Hoh, President of China Yuchai, commented,
"In the second quarter of 2018, our engine sales continued to grow
buoyed by faster growth in the off-road markets. We are well
positioned in the off-road segment in China. While we continue
to build our financial strength, we have recently paid a Dividend
of US$0.73 per ordinary share and a
Special Dividend of US$1.48 per
ordinary share for the year ended December
31, 2017."
Exchange Rate Information
The Company's functional currency is the U.S. dollar and its
reporting currency is Renminbi. The translation of amounts from
Renminbi to U.S. dollars is solely for the convenience of the
reader. Translation of amounts from Renminbi to U.S. dollars has
been made at the rate of RMB 6.6166 =
US$1.00, the rate quoted by the
People's Bank of China at the
close of business on June 30, 2018. No representation is made
that the Renminbi amounts could have been, or could be, converted
into U.S. dollars at that rate or at any other certain rate on
June 30, 2018 or at any other date.
Unaudited Second Quarter 2018 Conference Call
A conference call and audio webcast for the investment community
has been scheduled for 8:00 A.M. Eastern
Daylight Time on August 10, 2018. The call will be
hosted by the President and Chief Financial Officer of China
Yuchai, Mr. Weng Ming Hoh and Dr. Thomas Phung respectively, who will present and
discuss the financial results and business outlook of the Company
followed with a Q&A session.
Analysts and institutional investors may participate in the
conference call by dialling +1-866-519-4004 (United States), +800-906-601 (Hong Kong), 400-620-8038 (China) or +65 67135090 (International),
Conference Code: 7155238 approximately five to ten minutes
before the call start time.
For all other interested parties, a simultaneous webcast can be
accessed at the investor relations section of the Company's website
located at http://www.cyilimited.com. Participants are requested to
log into the webcast at least 10 minutes prior to the scheduled
start time. The recorded webcast will be available on the website
shortly after the earnings call.
About China Yuchai International
China Yuchai International Limited, through its subsidiary,
Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the
manufacture, assembly, and sale of a wide variety of light-,
medium- and heavy-duty engines for trucks, buses, passenger
vehicles, construction equipment, marine and agriculture
applications in China. GYMCL also
produces diesel power generators. The engines produced by GYMCL
range from diesel to natural gas and hybrid engines. Through its
regional sales offices and authorized customer service centers, the
Company distributes its engines directly to auto OEMs and retailers
and provides maintenance and retrofitting services throughout
China. Founded in 1951, GYMCL has
established a reputable brand name, strong research and development
team and significant market share in China with high-quality products and reliable
after-sales support. In 2017, GYMCL sold 367,097 engines and is
recognized as a leading manufacturer and distributor of engines in
China. For more information,
please visit http://www.cyilimited.com.
Safe Harbor Statement
This news release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. The words "believe", "expect", "anticipate", "project",
"targets", "optimistic", "confident that", "continue to",
"predict", "intend", "aim", "will" or similar expressions are
intended to identify forward-looking statements. All statements
other than statements of historical fact are statements that may be
deemed forward-looking statements. These forward-looking statements
including, but not limited to, statements concerning the Company's
operations, financial performance and condition are based on
current expectations, beliefs and assumptions which are subject to
change at any time. The Company cautions that these statements by
their nature involve risks and uncertainties, and actual results
may differ materially depending on a variety of important factors
such as government and stock exchange regulations, competition,
political, economic and social conditions around the world and in
China including those discussed in
the Company's Form 20-Fs under the headings "Risk Factors",
"Results of Operations" and "Business Overview" and other reports
filed with the Securities and Exchange Commission from time to
time. All forward-looking statements are applicable only as of the
date it is made and the Company specifically disclaims any
obligation to maintain or update the forward-looking information,
whether of the nature contained in this release or otherwise, in
the future.
For more information, please contact:
Kevin Theiss
Tel: +1-646-726-6511
Email: cyd@bluefocus.com
-- Tables Follow –
CHINA YUCHAI
INTERNATIONAL LIMITED
|
UNAUDITED
CONSOLIDATED INCOME STATEMENTS
|
For the quarters
ended June 30, 2018 and 2017
|
(RMB and US$
amounts expressed in thousands, except per share
data)
|
|
|
June 30,
2018
|
|
June 30,
2017
|
|
RMB
'000
|
|
US$
'000
|
|
RMB
'000
|
|
US$
'000
|
|
|
|
|
|
Restated
|
|
Restated
|
|
|
|
|
|
|
|
|
Revenue
|
4,204,550
|
|
635,455
|
|
4,072,626
|
|
615,516
|
Cost of goods
sold
|
(3,435,522)
|
|
(519,228)
|
|
(3,348,597)
|
|
(506,090)
|
Gross
profit
|
769,028
|
|
116,227
|
|
724,029
|
|
109,426
|
Other operating
income, net
|
33,740
|
|
5,099
|
|
48,588
|
|
7,343
|
Research and
development costs
|
(156,472)
|
|
(23,648)
|
|
(113,041)
|
|
(17,084)
|
Selling, general and
administrative costs
|
(371,811)
|
|
(56,194)
|
|
(414,838)
|
|
(62,699)
|
Operating
profit
|
274,485
|
|
41,484
|
|
244,738
|
|
36,986
|
Finance
costs
|
(29,605)
|
|
(4,474)
|
|
(16,490)
|
|
(2,492)
|
Share of results of
associates and joint
ventures
|
841
|
|
127
|
|
3,062
|
|
463
|
Profit before
tax
|
245,721
|
|
37,137
|
|
231,310
|
|
34,957
|
Income tax
expense
|
(48,994)
|
|
(7,405)
|
|
(46,541)
|
|
(7,034)
|
Profit for the
period
|
196,727
|
|
29,732
|
|
184,769
|
|
27,923
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
Equity holders of the
parent
|
132,129
|
|
19,969
|
|
133,862
|
|
20,231
|
Non-controlling
interests
|
64,598
|
|
9,763
|
|
50,907
|
|
7,692
|
|
196,727
|
|
29,732
|
|
184,769
|
|
27,923
|
|
|
|
|
|
|
|
|
Net earnings per
common share
|
|
|
|
|
|
|
|
- Basic
|
3.23
|
|
0.49
|
|
3.29
|
|
0.50
|
- Diluted
|
3.23
|
|
0.49
|
|
3.29
|
|
0.50
|
|
|
|
|
|
|
|
|
Unit sales
|
100,675
|
|
|
|
90,638
|
|
|
CHINA YUCHAI
INTERNATIONAL LIMITED
UNAUDITED
CONSOLIDATED INCOME STATEMENTS
For the six months
ended June 30, 2018 and 2017
(RMB and US$
amounts expressed in thousands, except per share
data)
|
|
|
June 30,
2018
|
|
June 30,
2017
|
|
RMB
'000
|
US$
'000
|
|
RMB
'000
|
US$
'000
|
|
|
|
|
Restated
|
Restated
|
|
|
|
|
|
|
Revenue
|
8,541,644
|
1,290,942
|
|
8,625,265
|
1,303,580
|
Cost of goods
sold
|
(6,919,136)
|
(1,045,724)
|
|
(7,045,254)
|
(1,064,785)
|
Gross
profit
|
1,622,508
|
245,218
|
|
1,580,011
|
238,795
|
Other operating
income, net
|
84,231
|
12,730
|
|
88,194
|
13,329
|
Research and
development costs
|
(276,381)
|
(41,771)
|
|
(237,624)
|
(35,913)
|
Selling, general and
administrative costs
|
(731,693)
|
(110,584)
|
|
(755,650)
|
(114,206)
|
Operating
profit
|
698,665
|
105,593
|
|
674,931
|
102,005
|
Finance
costs
|
(52,124)
|
(7,878)
|
|
(43,251)
|
(6,537)
|
Share of results of
associates and joint
ventures
|
8,558
|
1,293
|
|
5,164
|
780
|
Profit before
tax
|
655,099
|
99,008
|
|
636,844
|
96,248
|
Income tax
expense
|
(130,153)
|
(19,671)
|
|
(119,599)
|
(18,076)
|
Profit for the
year
|
524,946
|
79,337
|
|
517,245
|
78,172
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
Equity holders of the
parent
|
374,967
|
56,671
|
|
382,365
|
57,787
|
Non-controlling
interests
|
149,979
|
22,666
|
|
134,880
|
20,385
|
|
524,946
|
79,337
|
|
517,245
|
78,172
|
|
|
|
|
|
|
Net earnings per
common share
|
|
|
|
|
|
- Basic
|
9.18
|
1.39
|
|
9.39
|
1.42
|
- Diluted
|
9.17
|
1.39
|
|
9.39
|
1.42
|
|
|
|
|
|
|
Unit sales
|
210,788
|
|
|
210,648
|
|
CHINA YUCHAI
INTERNATIONAL LIMITED
|
SELECTED UNAUDITED
CONSOLIDATED BALANCE SHEET ITEMS
|
For the periods
ended June 30, 2018 and December 31, 2017
|
(RMB and US$
amounts expressed in thousands)
|
|
|
June 30,
2018
(Unaudited)
|
December 31,
2017
(Audited)
|
|
RMB
'000
|
US$
'000
|
RMB
'000
|
|
|
|
Restated
|
|
|
|
|
Cash and bank
balances
|
6,499,896
|
982,362
|
6,029,207
|
Trade and bills
receivables
|
8,289,812
|
1,252,881
|
7,031,544
|
Inventories
|
2,018,783
|
305,109
|
2,572,745
|
Trade and bills
payables
|
5,334,512
|
806,232
|
5,177,123
|
Short-term and
long-term interest-bearing loans and borrowings
|
1,819,840
|
275,042
|
1,626,341
|
Equity attributable
to equity holders of the parent
|
8,071,179
|
1,219,838
|
8,334,289
|
CHINA YUCHAI INTERNATIONAL
LIMITED
Impact on adoption of IFRS 15 Revenue from Contracts with
Customers:
The figures presented below are all expressed in thousands.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers is effective for
the annual periods beginning on or after January 1, 2018. IFRS 15 establishes a five
steps model to account for the revenue arising from the contracts
with customers. Under IFRS 15, revenue is recognized at an
amount that reflects the consideration to which an entity expects
to be entitled in exchange for transferring of goods or services to
a customer.
The Group has applied the changes in accounting policies
retrospectively to each reporting period presented, using the full
retrospective approach. Accordingly, the comparative figures
in the balance sheet at December 31,
2017 and the income statement for the quarter and
year-to-date ended June 30, 2017 have
been restated to reflect the retrospective adjustments upon
adoption of IFRS 15.
Warranty obligations
Under IFRS 15, the Group accounts for a service-type warranty as
a separate performance obligation to which the Group allocates a
portion of the transaction price. The portion of the
consideration allocated to the service-type warranty is initially
recorded as a contract liability and recognized as revenue over the
period which warranty services are provided.
As a result, the Group's income statement for the second quarter
of 2017 was restated as follows:
- Revenue decreased by RMB 20,725
to RMB 4,072,626.
- Cost of sales increased by RMB
7,927 to RMB 3,348,597.
- Selling, general and administrative cost decreased by
RMB 31,759 to RMB 414,838.
- Profit after tax was adjusted from RMB
181,662 to RMB 184,769.
- Profit attributable to the equity holders of the parent was adjusted
from RMB 131,488 to RMB 133,862.
- Basic and Diluted earnings per share was adjusted from
RMB 3.23 to RMB 3.29.
As a result, the Group's income statement for the first six
months ended June 30, 2017 was
restated as follows:
- Revenue decreased by RMB 27,607
to RMB 8,625,265.
- Cost of sales increased by RMB
65,720 to RMB 7,045,254.
- Selling, general and administrative cost decreased by
RMB 95,808 to RMB 755,650.
- Profit after tax was adjusted from RMB
514,764 to RMB 517,245.
- Profit attributable to the equity
holders of the parent was adjusted from RMB 380,469 to RMB
382,365.
- Basic and Diluted earnings per share was adjusted from
RMB 9.35 to RMB 9.39.
The effect of the restatements on the equity attributable to
equity holders of the parent was adjusted from RMB 8,347,562 to RMB
8,334,289.
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SOURCE China Yuchai International Limited