SINGAPORE, Nov. 8, 2018 /PRNewswire/ -- China Yuchai
International Limited (NYSE: CYD) ("China Yuchai" or the
"Company"), a leading manufacturer and distributor of engines for
on- 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 third quarter and nine months ended September
30, 2018. The financial information presented herein for the third
quarter of 2018 and 2017 is reported using International Financial
Reporting Standards as issued by the International Accounting
Standards Board.
The comparative figures for the third quarter and first nine
months ended September 30, 2017 were
restated due to the adoption of IFRS 15 effective on or after
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 Third Quarter of 2018
- Net revenue was RMB 3.2 billion (US$ 463.6 million) compared with RMB 3.8
billion in the third quarter of 2017;
- Gross profit was RMB 607.7 million (US$ 88.3 million), with a gross margin of 19.1%,
compared with RMB 725.5 million and a gross margin of
19.2% in the third quarter of 2017;
- Operating profit was RMB 251.2 million (US$ 36.5 million) compared with RMB 287.8
million in the third quarter of 2017;
- Net earnings attributable to China
Yuchai's shareholders was RMB 128.5
million (US$ 18.7 million)
compared with RMB 157.9 million in
the third quarter of 2017;
- Earnings per share were RMB 3.15 (US$ 0.46) compared
with RMB 3.87 in the third quarter of 2017;
- Total number of engines sold was 71,062 units compared with
82,839 units in the third quarter of 2017.
The net revenue for the third quarter of 2018 decreased by 15.8%
to RMB 3.2 billion (US$ 463.6 million) from RMB 3.8 billion for the same quarter last
year.
The total number of engines sold by GYMCL during the third
quarter of 2018 was 71,062 units, compared with 82,839 units for
the same quarter last year, a decrease of 14.2%. Sales
reflected industry trends with lower engine sales to the truck and
bus segments compared with the same quarter last year. Sales
to the off-road engine market increased in the third quarter of
2018 primarily due to higher sales in the agriculture and power
generation sectors compared with the same quarter last year.
According to data reported by the China Association of
Automobile Manufacturers ("CAAM"), in the third quarter of 2018,
sales of commercial vehicles (excluding gasoline–powered and
electric-powered vehicles) decreased by 15.2% overall compared with
the same quarter in 2017. This included a 15.6% decrease in
the truck segment and a 12.3% drop in the bus segment. During this
period, the sales of heavy-duty and medium-duty trucks dropped by
23.0% and 31.1% respectively.
Gross profit decreased by 16.2% to RMB
607.7 million (US$ 88.3
million) from RMB 725.5
million in the same quarter last year. Gross margin
was 19.1% compared with 19.2% in the same quarter last
year.
Other operating income was RMB 44.1
million (US$ 6.4 million)
compared with RMB 50.6 million in the
same quarter last year. The decrease was mainly due to lower
foreign exchange revaluation gain and lower fair value gain on held
for trading investment, partly offset by higher interest income and
higher fair value gain on foreign exchange forward contract
compared to the same quarter last year.
Research and development ("R&D") expenses decreased by 54.4%
to RMB 63.6 million (US$ 9.2 million) from RMB
139.6 million in the same quarter last year. Lower
R&D expenses were mainly due to the capitalization of
development costs of National VI and Tier 4 engines that had met
the IFRS capitalization criteria. The ongoing R&D program
is focused on new and existing engine products, especially for
engines to meet the next-generation National VI and Tier 4 emission
standards, as well as continued initiatives to improve engine
quality. As a percentage of revenue, R&D expenses
decreased to 2.0% compared with 3.7% in the same quarter last
year.
Selling, general & administrative ("SG&A") expenses
decreased by 3.4% to RMB 337.0
million (US$ 49.0 million)
from RMB 348.8 million in the same
quarter last year. The decrease was mainly due to lower
personnel expenses partially offset by higher warranty expenses.
SG&A expenses represented 10.6% of revenue compared with
9.2% in the same quarter last year.
Operating profit decreased by 12.7% to RMB 251.2 million (US$
36.5 million) from RMB 287.8
million in the same quarter last year. The operating
margin was 7.9% compared with 7.6% in the same quarter last
year.
Finance costs were reduced by 8.5% to RMB
29.9 million (US$ 4.3 million)
compared with RMB 32.7 million in the
same quarter last year. Lower finance costs mainly resulted
from lower bills discounting costs.
For the quarter ended September 30,
2018, total net profit attributable to China Yuchai's
shareholders was RMB 128.5 million
(US$ 18.7 million), or earnings per
share of RMB 3.15 (US$ 0.46), compared with RMB 157.9 million, or earnings per share of
RMB 3.87 in the same quarter last
year.
Earnings per share in the third quarter of 2018 were based on a
weighted average of 40,858,290 shares compared with 40,799,959
shares in the same quarter last year.
Financial Highlights for the Nine Months ended September
30, 2018
- Net revenue was RMB 11.7 billion (US$ 1.7 billion) compared with RMB 12.4 billion a year ago;
- Gross profit was RMB 2.2 billion (US$ 324.2 million), or a gross margin of 19.0%,
compared with RMB 2.3 billion, or a gross margin of 18.6%, a
year ago;
- Operating profit was RMB 949.9 million (US$ 138.1 million) compared with RMB 962.7 million a year ago;
- Basic and diluted earnings per share were RMB 12.32 (US$ 1.79) compared with
RMB 13.26 a year ago;
- Total number of engines sold was 281,850 units compared with
293,487 units a year ago.
For the nine months ended September 30,
2018, net revenue decreased by 5.5% to RMB 11.7 billion (US$ 1.7
billion) from RMB 12.4 billion
in the same period last year.
The total number of engines sold by GYMCL in the first nine
months of 2018 was 281,850 units compared with 293,487 units in the
same period last year, a decrease of 4.0%. The decrease was
due to lower engine sales in the truck and bus segments partially
offsetting higher engine unit sales in the off-road
segment.
According to data reported by CAAM, in the nine months ended
September 30, 2018, sales of
commercial vehicles (excluding gasoline–powered and
electric-powered vehicles) decreased by 0.2%, with an increase of
0.3% in the truck segment offset by a decrease of 4.1% in the bus
segment sales.
Gross profit decreased by 3.3% to RMB 2.2
billion (US$ 324.2 million)
compared with RMB 2.3 billion in the
same period last year. The decrease was mainly attributable
to lower unit sales. Gross margin was 19.0% compared with
18.6% in the same period last year.
Other operating income was RMB 128.3
million (US$ 18.7 million)
compared with RMB 138.8 million in
the same period last year. This decrease was mainly due to a
lower foreign exchange revaluation gain and lower fair value gain
on held for trading investment partially offset by higher interest
income and higher fair value gain on foreign exchange forward
contract.
R&D expenses were RMB 340.0
million (US$ 49.4 million)
compared with RMB 377.2 million in
the same period last year. Lower R&D expenses were mainly
due to the capitalization of development costs of National VI and
Tier 4 engines that had met the IFRS capitalization criteria.
The ongoing R&D program is focused on new and existing
engine products as well as continued initiatives to improve engine
quality. As a percentage of revenue, R&D spending was
2.9% in the first nine months of 2018 compared with 3.0% in the
same period last year.
SG&A expenses were RMB 1.1
billion (US$ 155.3 million)
compared with RMB 1.1 billion in the
same period last year. The higher warranty expenses for the
nine months of 2018 were offset by the lower staff costs compared
with same period last year. SG&A expenses represented 9.1% of
revenue for the first nine months of 2018 compared with 8.9% in the
same period last year.
Operating profit was RMB 949.9
million (US$ 138.1 million)
from RMB 962.7 million in the same
period last year. The decrease was mainly due to lower unit
sales. The operating margin was 8.1% in the first nine months
of 2018 compared with 7.8% in the same period last year.
Finance costs were RMB 82.0
million (US$ 11.9 million)
compared with RMB 75.9 million in the
same period last year. Higher finance costs were mainly due
to higher borrowing costs.
For the nine months ended September 30,
2018, total net profit attributable to China Yuchai's
shareholders was RMB 503.5 million
(US$ 73.2 million), compared with
RMB 540.2 million in the same period
last year.
Basic and diluted earnings per share of RMB 12.32 (US$
1.79) compared with basic and diluted earnings per share of
RMB 13.26 in the same period last
year.
Basic earnings per share in the nine months of 2018 were based
on a weighted average of 40,858,290 shares, and diluted
earnings per share was based on a weighted average of 40,872,254
shares compared with 40,741,708 shares in the same period in
2017.
Balance Sheet Highlights as at September 30,
2018
- Cash and bank balances were RMB 4.8
billion (US$ 699.0 million)
compared with RMB 6.0 billion at the end of
2017;
- Trade and bills receivables were RMB 8.9
billion (US$ 1.3 billion)
compared with RMB 7.0 billion at the
end of 2017;
- Inventories were RMB 2.2 billion (US$ 321.7 million) compared with RMB 2.6
billion at the end of 2017;
- Trade and bills payables were RMB 4.8
billion (US$ 697.4 million)
compared with RMB 5.2 billion at the
end of 2017;
- Short-term and long-term borrowings were RMB 1.7
billion (US$ 250.4 million)
compared with RMB 1.6 billion at the end of 2017.
Mr. Weng Ming Hoh, President of
China Yuchai, commented, "Our engine sales in the third quarter of
2018 reflected the industry trends, with slower sales in trucks and
buses. Our growing presence in off-road markets has partially
mitigated the industry's commercial vehicle slowdown, with higher
sales in the agriculture and power generation segments."
"We took another major step with our new JV, Eberspaecher Yuchai
Exhaust Technology Co. Ltd., which will add new emissions
technology to our manufacturing to produce advanced emission
systems for the next-generation National VI standards," Mr. Hoh
concluded.
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 6.8792 = US$ 1.00, the rate
quoted by the People's Bank of China at the close of
business on September 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 September 30, 2018 or at any other date.
Unaudited Third Quarter 2018
Conference Call
A conference call and audio webcast for the investment community
has been scheduled for 8:00 A.M. Eastern Standard
Time on November 8, 2018. The call will be hosted by Mr.
Weng Ming HOH, President, and Dr. Thomas PHUNG, Chief Financial
Officer, of China Yuchai. They will present on 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: 1859527 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: +1-212-521-4050
Email: cyd@bluefocus.com
- Tables Follow -
UNAUDITED
CONSOLIDATED INCOME STATEMENTS
|
For the quarters
ended September 30, 2018 and 2017
|
(RMB and US$
amounts expressed in thousands, except per share
data)
|
|
|
|
|
|
|
September 30,
2018
|
September 30,
2017
|
|
RMB
'000
|
US$
'000
|
RMB
'000
|
US$
'000
|
|
|
|
Restated
|
Restated
|
Revenue
|
3,189,426
|
463,633
|
3,786,202
|
550,384
|
Cost of goods
sold
|
(2,581,724)
|
(375,294)
|
(3,060,724)
|
(444,924)
|
Gross
profit
|
607,702
|
88,339
|
725,478
|
105,460
|
Other operating
income, net
|
44,090
|
6,409
|
50,642
|
7,362
|
Research and
development costs
|
(63,610)
|
(9,247)
|
(139,573)
|
(20,289)
|
Selling, general and
administrative costs
|
(336,973)
|
(48,984)
|
(348,753)
|
(50,697)
|
Operating
profit
|
251,209
|
36,517
|
287,794
|
41,836
|
Finance
costs
|
(29,874)
|
(4,343)
|
(32,667)
|
(4,749)
|
Share of results of
associates and joint ventures
|
6,075
|
883
|
5,622
|
817
|
Profit before
tax
|
227,410
|
33,057
|
260,749
|
37,904
|
Income tax
expense
|
(48,150)
|
(6,999)
|
(46,420)
|
(6,748)
|
Profit for the
period
|
179,260
|
26,058
|
214,329
|
31,156
|
Attributable
to:
|
|
|
|
|
Equity holders of the
parent
|
128,517
|
18,682
|
157,884
|
22,951
|
Non-controlling
interests
|
50,743
|
7,376
|
56,445
|
8,205
|
|
179,260
|
26,058
|
214,329
|
31,156
|
Net earnings per
common share
|
|
|
|
|
-
Basic
|
3.15
|
0.46
|
3.87
|
0.56
|
-
Diluted
|
3.15
|
0.46
|
3.87
|
0.56
|
Unit sales
|
71,062
|
|
82,839
|
|
CHINA YUCHAI
INTERNATIONAL LIMITED
|
UNAUDITED
CONSOLIDATED INCOME STATEMENTS
|
For the nine
months ended September 30, 2018 and 2017
|
(RMB and US$
amounts expressed in thousands, except per share
data)
|
|
|
September 30,
2018
|
September 30,
2017
|
|
RMB
'000
|
US$
'000
|
RMB'000
|
US$
'000
|
|
|
|
Restated
|
Restated
|
Revenue
|
11,731,070
|
1,705,296
|
12,411,467
|
1,804,202
|
Cost of goods
sold
|
(9,500,860)
|
(1,381,100)
|
(10,105,978)
|
(1,469,063)
|
Gross
profit
|
2,230,210
|
324,196
|
2,305,489
|
335,139
|
Other operating
income, net
|
128,321
|
18,653
|
138,836
|
20,182
|
Research and
development costs
|
(339,991)
|
(49,423)
|
(377,197)
|
(54,832)
|
Selling, general and
administrative costs
|
(1,068,666)
|
(155,347)
|
(1,104,403)
|
(160,542)
|
Operating
profit
|
949,874
|
138,079
|
962,725
|
139,947
|
Finance
costs
|
(81,998)
|
(11,920)
|
(75,918)
|
(11,036)
|
Share of results of
associates and joint ventures
|
14,633
|
2,127
|
10,786
|
1,568
|
Profit before
tax
|
882,509
|
128,286
|
897,593
|
130,479
|
Income tax
expense
|
(178,303)
|
(25,919)
|
(166,019)
|
(24,133)
|
Profit for the
period
|
704,206
|
102,367
|
731,574
|
106,346
|
Attributable
to:
|
|
|
|
|
Equity holders of the
parent
|
503,484
|
73,189
|
540,249
|
78,534
|
Non-controlling
interests
|
200,722
|
29,178
|
191,325
|
27,812
|
|
704,206
|
102,367
|
731,574
|
106,346
|
Net earnings per
common share
|
|
|
|
|
-
Basic
|
12.32
|
1.79
|
13.26
|
1.93
|
-
Diluted
|
12.32
|
1.79
|
13.26
|
1.93
|
Unit sales
|
281,850
|
|
293,487
|
|
CHINA YUCHAI
INTERNATIONAL LIMITED
|
UNAUDITED SELECTED
CONSOLIDATED BALANCE SHEET ITEMS
|
(RMB and US$
amounts expressed in thousands)
|
|
|
As of
September 30, 2018
|
As of
December 31, 2017
|
|
|
|
(Audited)
|
|
|
|
Restated
|
|
RMB
'000
|
US$
'000
|
RMB
'000
|
|
|
|
|
Cash and bank
balances
|
4,808,849
|
699,042
|
6,029,207
|
Trade and bills
receivables
|
8,878,820
|
1,290,676
|
7,031,544
|
Inventories
|
2,213,072
|
321,705
|
2,572,745
|
Trade and bills
payables
|
4,797,290
|
697,362
|
5,177,123
|
Short-term and
long-term interest-bearing loans and borrowings
|
1,722,668
|
250,417
|
1,626,341
|
Equity attributable
to equity holders of the parent
|
8,242,948
|
1,198,242
|
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 September 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 third quarter
of 2017 was restated as follows:
- Revenue decreased by RMB 2,556 to
RMB 3,786,202.
- Cost of sales increased by RMB
33,161 to RMB 3,060,724.
- Selling, general and administrative cost decreased by
RMB 25,622 to RMB 348,753.
- Profit after tax was adjusted from RMB
224,424 to RMB 214,329.
- Profit attributable to the equity holders of the parent was
adjusted from RMB 165,598 to
RMB 157,884.
- Earnings per share was adjusted from RMB
4.06 to RMB 3.87.
As a result, the Group's income statement for the first nine
months ended 2017 was restated as follows:
- Revenue decreased by RMB 30,163
to RMB 12,411,467.
- Cost of sales increased by RMB
98,881 to RMB 10,105,978.
- Selling, general and administrative cost decreased by
RMB 121,430 to RMB 1,104,403.
- Profit after tax was adjusted from RMB
739,188 to RMB 731,574.
- Profit attributable to the equity holders of the parent was
adjusted from RMB 546,067 to
RMB 540,249.
- Earnings per share was adjusted from RMB
13.40 to RMB 13.26.
The effect of the restatements on the equity attributable to
equity holders of the parent as at December
31, 2017 was adjusted from RMB
8,347,562 to RMB
8,334,289.
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SOURCE China Yuchai International Limited