JINJIANG, China, April 30, 2019 /PRNewswire/ -- China
Ceramics Co., Ltd. (NASDAQ Capital Market: CCCL) ("China Ceramics"
or the "Company"), a leading Chinese manufacturer of ceramic tiles
used for exterior siding and for interior flooring and design in
residential and commercial buildings, today announced its financial
results for the second half and fiscal year ended December 31, 2018.
Operating results were affected by the following significant
items:
- Sales in the second half of 2018 sharply decreased due to an
unexpected slowdown in China's
real estate sector. In an effort to bolster sales, in July of 2018,
we decreased the pricing of our ceramic tile products by an average
of 10%. This follows a price increase of 5% that we instituted
in April of 2018 following three price raises beginning in April of
2017.
- Provision for inventory impairment was RMB 56.0 million (US$ 8.2
million) for the six months ended December 31, 2018, as compared to a reversal of
inventory impairment of RMB 2.7
million (US$ 0.4 million) for
the same period of 2017.
- Asset write-down attributable to the impairment of fixed assets
and land use rights was RMB 85.0
million (US$ 12.9 million) for
the six months ended December 31,
2018, as compared to RMB 36.7
million (US$ 5.5 million) for
the same period of 2017.
- Provision for bad debt was RMB 210.1
million (US$ 30.6 million) for
the six months ended December 31,
2018, as compared to RMB 71.6
million (US$ 10.8 million) for
the same period of 2017. Provision for bad debt was RMB 316.4 million (US$
47.9 million) for the twelve months ended December 31, 2018, as compared to RMB 71.6 million (US$ 10.8
million) for the same period of 2017.
Second Half 2018 Summary
- Revenue was RMB 142.6 million
(US$ 20.8 million) for the six months
ended December 31, 2018, as compared
to RMB 485.3 million (US$ 73.2 million) for the same period of
2017.
- Gross loss was RMB 46.0 million
(US$ 6.7 million) for the six months
ended December 31, 2018, as compared
to a gross profit of RMB 57.8 million
(US$ 8.7 million) for the same period
of 2017.
- Net loss was RMB 346.8 million
(US$ 50.6 million) for the six months
ended December 31, 2018, as compared
to a net loss of RMB 82.2 million
(US$ 12.4 million) for the same
period of 2017.
- Loss per share on a basic and fully diluted basis were
RMB 75.95 (US$
11.07) for the six months ended December 31, 2018, as compared to loss per share
on a basic and fully diluted basis of RMB
24.29 (US$ 3.66) for the six
months ended December 31, 2017.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) was RMB 10.2
million (US$ 1.5 million) for
the six months ended December 31,
2018, adjusted for the write-off of fixed assets and land
use rights, the inventory impairment provision, and bad debt
expense, as compared to RMB 51.6
million (US$ 7.8 million),
adjusted for the write-off of fixed assets, slow-moving inventory,
and bad debt expense for the same period of 2017.
Fiscal Year 2018 Summary
- Revenue was RMB 498.2 million
(US$ 75.4 million), as compared to
RMB 821.8 million (US$ 121.7 million) for fiscal year 2017.
- Gross loss was RMB 1.2 million
(US$ 0.2 million), as compared to a
gross profit of RMB 50.4 million
(US$ 7.5 million) for fiscal year
2017.
- Net loss was RMB 418.7 million
(US$ 63.3 million), as compared to a
net loss of RMB 88.0 million
(US$ 13.0 million) for fiscal year
2017.
- Loss per share on a basic and fully diluted basis were
RMB 93.18 (US$
14.10), as compared to basic and fully diluted earnings per
share of RMB 26.36 (US$ 3.90) for fiscal year 2017.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) was RMB 50.5
million (US$ 7.6 million),
adjusted for the write-off of fixed assets and land use rights, the
inventory impairment provision, and bad debt expense, as compared
to RMB 42.9 million (US$ 6.4 million), adjusted for the write-off of
fixed assets, slow-moving inventory, and bad debt expense for
fiscal year 2017.
"During the second half of 2018, we experienced difficult market
conditions as compared to the same period of 2017. Our revenue
decreased 71% for the second half of 2018 due to a 72% decrease in
our sales volume. However, after adjusting for asset write-offs,
our cash flow was modestly positive for the second half of the year
despite the market slowdown, and our cash flow was reasonably
strong for the full year of 2018," said Mr. Jiadong Huang, Chief Executive Officer of China
Ceramics.
"For the fiscal year 2018, we utilized production facilities
capable of producing 16.9 million square meters of ceramic tiles
per year out of the Company's effective total annual production
capacity of 56.5 million square meters of ceramic tiles. Consistent
with our practices in past quarters, we maintained a reduced
utilization of existing plant capacity based on the current market
environment to keep our operating costs low. We intend to bring
additional capacity online as the business environment
improves."
"For the remainder 2019, we believe that market conditions will
continue to be challenging due to government regulations to
stabilize real estate prices and contain real estate
development. However, urban renewal projects and an
improvement in new home prices last month fueled by China's smaller tier cities could represent a
potential turnaround in business conditions. In the
long-term, we believe our building materials sector will continue
to benefit from growth in the real estate sector due to continued
urbanization and its importance to China's domestic growth. We plan to capitalize
on emerging trends in the sector such as affordable housing
initiatives and the Government's promotion of rental properties
that could spur future growth," concluded Mr. Huang.
Six Month Results Ended December 31,
2018
Revenue for the six months ended December 31, 2018 was RMB
142.6 million (US$ 20.8
million), as compared to RMB 485.3
million (US$ 72.7 million) for
the same period of 2017. The 70.6% year-over-year decrease in
revenue was due to the 72.0% decrease in our sales volume for the
six months ended December 31, 2018
compared to the same period of 2017.
Gross loss for the six months ended December 31, 2018 was RMB
46.0 million (US$ 6.7
million), as compared to gross profit of RMB 57.8 million (US$ 8.7
million) for the same period of 2017.
The gross loss margin was 32.3% as compared to an 11.9%
gross profit margin for the same period of 2017. The gross loss
margin for the six months ending December
31, 2018 was due to (i) a 72.1% period-to-period decrease in
sales volume, and (ii) an increase in the provision for inventory
impairment, which was RMB 56.0
million (US$ 8.2 million) for
the six months ended December 31,
2018, as compared to a reversal of inventory impairment of
RMB 2.7 million (US$ 0.4 million) for the same period of 2017.
Other income for the six months ended December 31, 2018 was RMB
7.5 million ($1.1 million), as
compared to RMB 7.3 million
($1.1 million) for the same period of
2017. Other income is primarily comprised of rental income that the
Company received by leasing out one of its production lines from
its Hengdali facility pursuant to an eight-year lease contract.
Selling expenses for the six months ended
December 31, 2018 were RMB 5.3 million (US$ 0.8
million), as compared to RMB 6.1
million (US$ 0.9 million) for
the same period of 2017. The decrease in selling expenses was
mainly due to lower sales during the current period.
Administrative expenses for the six months ended
December 31, 2018 were RMB 7.5 million (US$ 1.1
million), as compared to RMB 8.2
million (US$ 0.7 million) for
the same period of fiscal 2017. The decrease in administrative
expenses was primarily due to an RMB 0.5
million decrease in office expenses and an RMB 0.2 million decrease in travel expenses.
Bad debt expense for the six months ended
December 31, 2018 was RMB 210.1 million (US$
30.6 million), as compared to RMB
71.6 million (US$ 10.8
million) for the same period of 2017, with the increase due
to the write-off of bad debt due to a rise in uncollectible debt
associated with our customers. We recognized a loss allowance for
an expected credit loss on financial assets, primarily on our trade
receivables, which are subject to impairment under International
Financial Reporting Standards (IFRS). We believe that we have
undertaken appropriate measures to resolve the bad debt expense. We
will continue to review each of our customers for credit quality as
well as assiduously test our accounts receivables balances in each
upcoming fiscal period.
Loss from asset devaluation resulting from an impairment
of non-current assets (fixed assets and land use rights) for the
six months ended December 31, 2018
was RMB 85.0 million (US$ 12.9 million) as compared to RMB 36.7 million (US$ 5.5
million) for the same period of 2017. The loss from asset
devaluation resulted from an impairment of non-current assets due
to decelerating growth in China
and an expected contraction in the demand for the Company's
products.
Other expenses for the six months ended December 31, 2018 were RMB $0.2 million (US$ 0.03
million), as compared to RMB 3.6
million (US$ 0.5 million) for
the same period of 2017. The reduction in other expenses is
attributable to a decreased loss on the disposal of fixed
assets.
Net loss for the six months ended December 31, 2018 was RMB
346.8 million (US$ 50.6
million), as compared to a net loss of RMB 82.2 million (US$ 12.4
million) for the same period of 2017. The increase in net
loss was mainly due to lower sales volume, an increase in the
inventory impairment provision, an increase in bad debt expense,
and an increase in the loss from asset devaluation for the six
months ended December 31, 2018 as
compared to the same period of 2017.
Loss per basic share and fully diluted share for the
six months ended December 31, 2018
were RMB 75.95 (US$ 11.07), as compared to loss per basic and
fully diluted share of RMB 24.29
(US$ 3.66) for the same period of
2017.
Adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) was RMB 10.2
million (US$ 1.5 million) for
the six months ended December 31,
2018, adjusted for the write-off of fixed assets and land
use rights, the inventory impairment provision, and bad debt
expense, as compared to RMB 51.6
million (US$ 7.8 million),
adjusted for the write-off of fixed assets, slow-moving inventory
and bad debt expense for the same period of 2017.
Full Year 2018 Financial Results
Revenue for the year ended December 31,
2018 was RMB 498.2 million
(US$ 75.4 million), as compared to
RMB 821.8 million (US$ 121.7 million) for the year ended
December 31, 2017. Gross loss was
RMB 1.2 million (US$ 0.2 million), as compared to gross profit of
RMB 50.4 million (US$ 7.5 million) for the same period of 2017. The
gross loss margin was 0.2%, as compared to a 6.1% gross profit
margin for the same period of 2017. Other income was RMB 14.6 million (US$ 2.2
million), as compared to RMB 14.3
million (US$ 2.1 million) for
the same period of 2017. Selling expenses were RMB 11.0 million (US$ 1.7
million), as compared to RMB 12.0
million (US$ 1.8 million) for
the same period of 2017. Administrative expenses were RMB 18.0 million (US$ 2.7
million), as compared to RMB 17.2
million (US$ 2.6 million) for
the same period of 2017. Bad debt expense was RMB 316.4 million (US$
47.9 million), as compared to RMB
71.6 million ($10.6 million)
for the same period of 2017. Loss from asset
devaluation resulting from an impairment of non-current assets
was RMB 85.0 million (US$ 12.9 million), as compared to RMB 36.7 million (US$ 5.4
million) for the same period of 2017. Other expenses were
RMB 1.5 million (US$ 0.2 million), as compared to RMB 5.2 million (US$ 0.8
million) in the same period of 2017. Net loss for the twelve
months ended December 31, 2018 was
RMB 418.7 million (US$ 63.4 million), as compared to a net loss of
RMB 88.0 million (US$ 13.0 million) for the same period of 2017.
Loss per share on a basic and fully diluted basis were RMB 93.18 (US$
14.10) for the year ended December
31, 2018, as compared to basic and fully diluted earnings
per share of RMB 26.36 (US$ 3.90), for the same period of 2017. Adjusted
EBITDA (earnings before interest, taxes, depreciation and
amortization) was RMB 50.5 million
(US$ 7.6 million), adjusted for the
write-off of fixed assets and land use rights, the inventory
impairment provision, and bad debt expense, as compared to
RMB 42.9 million (US$ 6.4 million), adjusted for the write-off of
fixed assets, slow-moving inventory, and bad debt expense, for the
same period of 2017.
Statements of Selected Financial Position Items for Fiscal
Year End 2018
- Cash and bank balances were RMB 9.0
million (US$ 1.3 million) as
of December 31, 2018, compared with
RMB 2.3 million (US$ 0.4 million) as of December 31, 2017.
- Inventory turnover was 117 days as of December 31, 2018, as compared to 95 days as of
December 31, 2017. We recorded an
inventory impairment provision of RMB 56.0
million (US$ 8.2 million) in
2018 and a reversal of an inventory impairment provision of
RMB 2.7 million (US$ 0.4 million) in 2017. Subsequent to the
inventory impairment for fiscal year 2018, we believe that the
value of our current inventories is realizable.
- Trade receivables turnover, net of value added tax, was
233 days as of December 31, 2018, as
compared with 206 days as of December
31, 2017. This high trade receivables turnover days was
primarily due to a continued difficult economic
environment which has prompted us to offer extended credit terms to
certain customers resulting in a higher trade receivables turnover
figure than normal.
- Trade payables turnover, net of value added tax,
was 26 days as of December 31,
2018 as compared with 43 days as of December 31, 2017. The average turnover days was
within the normal credit period of one to four months granted
by our suppliers.
Liquidity and Capital Resources
Cash flow used in operating activities was
RMB 2.4 million (US$ 0.3 million) for the second six months ended
December 31, 2018, as compared to
cash used in operating activities of RMB 3.6
million (US$ 0.5 million) in
the same period of 2017. The decrease in cash outflow was mainly
due to increased cash inflow from trade receivables.
Cash flow used in investing activities was
RMB 1.7 million (US$ 0.3 million) for the second six months ended
December 31, 2018, as compared to
cash flow used in investing activities of RMB 0.06 million (US$ 0.01
million) in the same period of 2017. The increase in cash
outflow was due to the increase in restricted cash of RMB 1.7 million.
Cash flow generated from financing activities was
RMB 7.5 million (US$ 1.1 million) for the second six months ended
December 31, 2018, as compared to
cash flow generated from financing activities of RMB 5.6 million (US$ 0.8
million) in the same period of 2017. Both events were the
result of the issuance of common shares.
Plant Capacity and Capital Expenditures Update
We utilized plant capacity capable of producing 4.7 million
square meters of ceramic tiles for the six months ended
December 31, 2018 and 16.9 million
square meters of ceramic tiles for fiscal 2018 out of a total
annual production capacity of 56.5 million square meters. Our
annual production capacity has been reduced from 66 million square
meters of ceramic tiles as of December 31,
2017 to 56.5 million square meters of ceramic tiles due to
our having retired two old furnaces at the Hengda facility in July
of 2018.
Our Hengda facility has an annual production capacity of 27.7
million square meters of ceramic tiles as a result of two old
furnaces having been put out of use at the facility. The Company
utilized production capacity at our Hengda facility capable of
producing 2.3 million square meters of ceramic tiles for the six
months ended December 31, 2018 and
9.8 million square meters of ceramic tiles for fiscal 2018.
Our Hengdali facility has an annual production capacity of
28.8 million square meters (which excludes our leasing out 10
million square meters of production capacity to a third party) and
we utilized production capacity at our Hengdali facility capable of
producing 2.4 million square meters of ceramic tiles for the six
months ended December 31, 2018 and
7.1 million square meters of ceramic tiles for fiscal 2018.
We will bring our unused production capacity online as
customer demand dictates and when there are signs of improvement in
China's real estate and
construction sectors.
Business Outlook
Sales in the second half of 2018 sharply decreased due to an
unexpected slowdown in China's
real estate sector. In an effort to bolster sales, in July of 2018,
we decreased the pricing of our ceramic tile products by an average
of 10%. This follows a pricing increase of 5% that we
instituted in April of 2018 following three price raises beginning
in April of 2017. However, the 10% price decrease in July 2018 did not offset the fall in our sales
volume due to deteriorating market conditions that persisted
through the second half of 2018, and we do not believe that further
price decreases would have had a beneficial effect upon sales
volume. To address the current market environment, we plan
upon expanding our sales force to procure new
customers, increasing our market to large property
developers in targeted cities, and bolstering our
research and development efforts to develop new products in order
to expand our market.
Looking ahead to the remainder of 2019, and based on the
information currently available to us, we expect market conditions
to continue to be challenging due to a slowing domestic economy and
government regulations intended to stabilize real estate prices and
slow real estate development. For example, the central government
has imposed lending curbs, higher mortgage rates and down payments,
a price cap on new developments and restrictions on the number of
homes each family can buy. This has led to some restraint on the
part of property developers to develop new residential housing due
to continued uncertainty, resulting in a slowing construction
sector.
We believe that China's
property market is resilient long-term, and that despite specific
austerity measures in certain cities, there is substantial
potential for property development in many regions. New home prices
in China showed a recent monthly
uptick reversing four months of decreases which was fueled by
China's smaller third and fourth
tier cities, a sector in which the Company is particularly focused.
In addition, more than 20 cities have relaxed their price-curbing
regulations since the beginning of the year, lowering the threshold
to qualify for mortgage loans.
In our view, real estate continues to be of vital importance for
China's economy as it accounts for
approximately 25% of GDP. Further, China's urbanization trend, where there has
been a great movement of population from rural areas into
China's cities, will continue into
the foreseeable future which, in our view, points to a sustainable
building materials sector over the long-term. Also, Chinese
households invest two-thirds of their assets on average in real
estate since alternative investments, such as the domestic stock
markets, are deemed too risky while real estate offers steady,
long-term growth.
We typically receive orders from customers one or two months in
advance of production on a rolling basis. However, due to the
potential for continued difficult market conditions in 2019, there
has been a decreased demand for our products, and as of
December 31, 2018, we did not have
any backlog. The Company believes that the reduction in backlog has
to do with a general slowdown in the construction industry in
China as customers are continuing
to defer orders and/or are waiting to start new projects.
Our building materials sector is continuing to work through
excessive production capacity while government mandates to convert
to cleaner and more expensive fuel sources could result in smaller,
less well capitalized competitors exiting the space. We believe
that we have a competitive advantage in our sector due to our brand
name recognition, extensive product platform, marketing expertise
and modernized operating efficiencies.
This business outlook reflects the Company's current and
preliminary views, which are subject to change and is subject to
risks and uncertainties, as well as risks and uncertainties
identified in the Company's public filings.
Conference Call Information
We will host a conference call at 8:00 am ET on Tuesday, April
30, 2019. Listeners may access the call by dialing +1
(877) 275-8968 five to ten minutes prior to the scheduled
conference call time. International callers should dial +1 (706)
643-1666. The conference participant pass code is 9428228. A replay
of the conference call will be available for 14 days starting from
11:00 am ET on April 30, 2019. To access the replay, dial +1
(855) 859-2056. International callers should dial +1 (404)
537-3406. The pass code is 9428228 for the
replay.
About China Ceramics Co., Ltd.
China Ceramics Co., Ltd. is a leading manufacturer of ceramic
tiles in China. The Company's
ceramic tiles are used for exterior siding, interior flooring, and
design in residential and commercial buildings. China Ceramics'
products, sold under the "Hengda" or "HD", "Hengdali" or "HDL", the
"TOERTO" and "WULIQIAO" brands, and the "Pottery Capital of Tang
Dynasty" brands, are available in over 2,000 style, color and size
combinations and are distributed through a network of exclusive
distributors as well as directly to large property developers. For
more information, please visit http://www.cceramics.com.
Currency Convenience Translation
The Company's financial information is stated in Renminbi
("RMB"). Translations of amounts from RMB into
United States dollars ("US$")
in this earnings release are solely for the
convenience of the readers and were calculated at the rate of
US$1.00 = RMB
6.8755 for balance sheet accounts at the balance sheet date,
US$1.00 = RMB
6.608 for the P&L accounts for the twelve months ended
December 31, 2018, and US$1.00 = RMB 6.858
for the P&L accounts for the six months ended December 31, 2018. The exchange rate refers to
the historical rate as set forth in the H.10 statistical release
published by www.federalreserve.gov on December 28, 2018. Such translations should not
be construed as representations that RMB amounts could have
been, or could be, converted realized or settled
into US$ at that rate on December 31, 2018 or any other rate.
Safe Harbor Statement
Certain of the statements made in this press release are
"forward-looking statements" within the meaning and protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions, and future performance, and
involve known and unknown risks, uncertainties and other factors,
which may be beyond our control, and which may cause the actual
results, performance, capital, ownership or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such forward-looking
statements. Forward-looking statements in this press release
include, without limitation, the continued stable macroeconomic
environment in the PRC, the PRC real estate and construction
sectors continuing to exhibit sound long-term fundamentals, our
ability to bring additional capacity online going forward as our
business improves, our customers continuing to adjust to our
product price increases, our ability to sustain our average selling
price increases and to continue to build volume in the quarters
ahead, and whether our enhanced marketing efforts will help to
produce wider customer acceptance of the new price points. All
statements other than statements of historical fact are statements
that could be forward-looking statements. You can identify these
forward-looking statements through our use of words such as "may,"
"will," "anticipate," "assume," "should," "indicate," "would,"
"believe," "contemplate," "expect," "estimate," "continue," "plan,"
"point to," "project," "could," "intend," "target" and other
similar words and expressions of the future.
All written or oral forward-looking statements attributable
to us are expressly qualified in their entirety by this cautionary
notice, including, without limitation, those risks and
uncertainties described in our annual report on Form 20-F for the
year ended December 31, 2017 and
otherwise in our SEC reports and filings. Such reports are
available upon request from the Company, or from the Securities and
Exchange Commission, including through the SEC's Internet website
at http://www.sec.gov. We have no obligation and do not undertake
to update, revise or correct any of the forward-looking statements
after the date hereof, or after the respective dates on which any
such statements otherwise are made.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures and guidance
which are considered "non-GAAP" financial measures under applicable
SEC rules and regulations. As described below, the Company's
management believes that in order to properly understand its
short-term and long-term financial trends, including period over
period comparisons of the Company's operations, investors may find
it useful to exclude the effect of certain charges or gains that
contribute to or reduce earnings but that result from transactions
or events that management believes may or may not recur with
similar materiality or impact to operations in future periods. The
Company generally uses such measures to facilitate management's
review of the operational performance of the Company. For more
detail on these measures and reconciliation of such measure to the
most comparable IFRS financial measures, please refer to page 15 of
this release.
FINANCIAL TABLES
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
As of December
31,
|
|
2018
|
|
2017
|
|
USD'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
ASSETS AND
LIABILITIES
|
|
|
|
|
|
NONCURRENT
ASSETS
|
|
|
|
|
|
Property
and equipment, net
|
7
|
|
46
|
|
87,316
|
Investment property, net
|
-
|
|
-
|
|
4,994
|
Land use
rights, net
|
-
|
|
-
|
|
4,364
|
Goodwill
|
-
|
|
-
|
|
-
|
Deferred
tax assets
|
-
|
|
-
|
|
209
|
Long-term prepaid expense
|
-
|
|
-
|
|
-
|
Total noncurrent
assets
|
7
|
|
46
|
|
96,883
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Inventories, net
|
18,522
|
|
127,346
|
|
191,667
|
Trade
receivables, net
|
32,596
|
|
224,114
|
|
532,361
|
Other
receivables and prepayments
|
680
|
|
4,673
|
|
2,152
|
Income
tax refundable
|
4
|
|
27
|
|
27
|
Restricted Cash
|
250
|
|
1,719
|
|
-
|
Cash and
bank balances
|
1,311
|
|
9,016
|
|
2,328
|
Total current
assets
|
53,363
|
|
366,895
|
|
728,535
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
3,538
|
|
24,329
|
|
61,084
|
Accrued
liabilities and other payables
|
3,767
|
|
25,894
|
|
29,719
|
Amounts
owned to related parties
|
5,266
|
|
36,203
|
|
36,017
|
Taxes
payable
|
654
|
|
4,497
|
|
3,862
|
Total current
liabilities
|
13,225
|
|
90,923
|
|
130,682
|
|
|
|
|
|
|
NET CURRENT
ASSETS
|
40,138
|
|
275,972
|
|
597,853
|
|
|
|
|
|
|
NET ASSETS
|
40,145
|
|
276,018
|
|
694,736
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share
capital
|
44
|
|
306
|
|
206
|
Reserves
|
40,101
|
|
275,712
|
|
694,530
|
Total stockholders' equity
|
40,145
|
|
276,018
|
|
694,736
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended December 31,
|
|
2018
|
|
2017
|
|
USD'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
Net sales
|
20,786
|
|
142,559
|
|
485,342
|
|
|
|
|
|
|
Cost of goods
sold
|
27,495
|
|
188,570
|
|
427,579
|
|
|
|
|
|
|
Gross profit
(loss)
|
(6,709)
|
|
(46,011)
|
|
57,763
|
|
|
|
|
|
|
Other
income
|
1,101
|
|
7,549
|
|
7,284
|
Selling and
distribution expenses
|
(778)
|
|
(5,334)
|
|
(6,127)
|
Administrative
expenses
|
(1,096)
|
|
(7,516)
|
|
(8,232)
|
Finance
costs
|
-
|
|
-
|
|
4
|
Bad debt
expense
|
(30,628)
|
|
(210,058)
|
|
(71,565)
|
Loss from asset
devaluation
|
(12,397)
|
|
(85,021)
|
|
(36,683)
|
Other
expenses
|
(25)
|
|
(168)
|
|
(3,624)
|
|
|
|
|
|
|
Loss before
taxation
|
(50,532)
|
|
(346,559)
|
|
(61,180)
|
|
|
|
|
|
|
Income tax (expense)
credit
|
(30)
|
|
(209)
|
|
(21,017)
|
|
|
|
|
|
|
Loss attributable to
shareholders
|
(50,562)
|
|
(346,768)
|
|
(82,197)
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(RMB)
|
(11.07)
|
|
(75.95)
|
|
(24.29)
|
Diluted
(RMB)
|
(11.07)
|
|
(75.95)
|
|
(24.29)
|
CHINA CERAMICS
CO., LTD. AND ITS SUBSIDIARIES
|
SALES VOLUME
AND AVERAGE SELLING PRICE (UNAUDITED)
|
|
|
|
|
Six months
ended December 31,
|
|
2017
|
2018
|
Sales volume
(square meters)
|
17,862,005
|
4,993,244
|
Average Selling
Price (in RMB/square meter)
|
27.17
|
28.55
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
For the Years
ended December 31,
|
|
2018
|
2017
|
|
USD'000
|
|
RMB'000
|
RMB'000
|
|
|
|
|
|
Net
sales
|
75,392
|
|
498,189
|
821,792
|
|
|
|
|
|
Cost of goods
sold
|
75,568
|
|
499,355
|
771,438
|
|
|
|
|
|
Gross profit
(loss)
|
(176)
|
|
(1,166)
|
50,354
|
|
|
|
|
|
Other
income
|
2,215
|
|
14,637
|
14,253
|
Selling and
distribution expenses
|
(1,669)
|
|
(11,026)
|
(11,962)
|
Administrative
expenses
|
(2,722)
|
|
(17,990)
|
(17,249)
|
Bad debt
expense
|
(47,887)
|
|
(316,438)
|
(71,565)
|
Finance
costs
|
-
|
|
-
|
(213)
|
Loss from asset
devaluation
|
(12,866)
|
|
(85,021)
|
(36,683)
|
Other
expenses
|
(221)
|
|
(1,461)
|
(5,220)
|
|
|
|
|
|
Loss before
taxation
|
(63,326)
|
|
(418,465)
|
(78,285)
|
|
|
|
|
|
Income tax
expense
|
(32)
|
|
(209)
|
(9,741)
|
|
|
|
|
|
Loss attributable
to shareholders
|
(63,358)
|
|
(418,674)
|
(88,026)
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
Basic
(RMB)
|
(14.10)
|
|
(93.18)
|
(26.36)
|
Diluted
(RMB)
|
(14.10)
|
|
(93.18)
|
(26.36)
|
CHINA CERAMICS
CO., LTD. AND ITS SUBSIDIARIES
|
|
SALES VOLUME AND
AVERAGE SELLING PRICE (UNAUDITED)
|
|
|
|
|
Years ended
December 31,
|
|
2017
|
|
2018
|
|
|
|
|
Sales volume (square
meters)
|
31,859,801
|
|
17,653,219
|
Average Selling Price
(in RMB/square meter)
|
25.79
|
|
28.22
|
|
|
|
|
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31,
|
|
2018
|
|
2017
|
|
USD'000
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Loss before
taxation
|
(50,531)
|
(346,559)
|
|
(61,180)
|
Adjustments
for
|
|
|
|
|
Amortization of land
use rights
|
8
|
54
|
|
72
|
Depreciation of
property, plant and equipment
|
838
|
5,747
|
|
7,173
|
Gain on disposal of
property, plant and equipment
|
-
|
-
|
|
(27)
|
Bad debt provision of
trade receivables
|
30,628
|
210,058
|
|
71,565
|
Write down of
inventories
|
8,161
|
55,973
|
|
(2,733)
|
Impairment of
non-current assets
|
12,397
|
85,021
|
|
36,683
|
Share based
compensation
|
47
|
321
|
|
294
|
Finance
costs
|
-
|
-
|
|
(219)
|
Interest expense
(income)
|
-
|
-
|
|
206
|
Operating cash flows
before working capital
changes
|
1,548
|
10,615
|
|
51,834
|
Decrease in
inventories
|
61
|
421
|
|
6,308
|
Decrease (Increase)
in trade receivables
|
6,593
|
45,219
|
|
(40,775)
|
Decrease in other
receivables, tax
receivable and prepayments
|
810
|
5,555
|
|
12,845
|
Decrease in trade
payable
|
(8,391)
|
(57,549)
|
|
(29,891)
|
Decrease in taxes
payable
|
(60)
|
(412)
|
|
-
|
Decrease in accrued
liabilities, other payables
and amounts owned to related parties
|
(910)
|
(6,244)
|
|
(3,939)
|
Cash used in
operations
|
(349)
|
(2,395)
|
|
(3,618)
|
Interest
paid
|
-
|
-
|
|
-
|
Income tax
paid
|
-
|
-
|
|
-
|
|
|
|
|
|
Net cash used in
operating activities
|
(349)
|
(2,395)
|
|
(3,618)
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Acquisition of fixed
assets
|
-
|
-
|
|
(62)
|
Increase in
restricted cash
|
(250)
|
(1,719)
|
|
-
|
|
|
|
|
|
Net cash used in
investing activities
|
(250)
|
(1,719)
|
|
(62)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Insurance of share
capital for equity financing
|
1,066
|
7,310
|
|
5,581
|
Advance from related
parties
|
27
|
186
|
|
-
|
|
|
|
|
|
Net cash generated
from financing activities
|
1,093
|
7,496
|
|
5,581
|
|
|
|
|
|
NET INCREASE IN
CASH & EQUIVALENTS
|
494
|
3,382
|
|
1,901
|
CASH &
EQUIVALENTS, BEGINNING OF PERIOD
|
913
|
6,042
|
|
167
|
EFFECT OF FOREIGN
EXCHANGE RATE DIFFERENCES
|
(96)
|
(408)
|
|
260
|
|
|
|
|
|
CASH &
EQUIVALENTS, END OF PERIOD
|
1,311
|
9,016
|
|
2,328
|
|
|
|
|
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
For the years
ended December 31,
|
|
|
|
2018
|
|
2017
|
|
USD'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Loss before
taxation
|
(63,327)
|
|
(418,465)
|
|
(78,285)
|
Adjustments
for
|
|
|
|
|
|
Amortization of land
use rights
|
16
|
|
108
|
|
143
|
Depreciation of
property, plant and equipment
|
1,740
|
|
11,500
|
|
15,371
|
(Gain) loss on
disposal of property, plant and equipment
|
|
|
|
|
(70)
|
Bad debt provision of
trade receivables
|
47,887
|
|
316,438
|
|
71,565
|
Write down of
inventories
|
8,470
|
|
55,973
|
|
(2,733)
|
Impairment of
non-current assets
|
12,866
|
|
85,021
|
|
36,683
|
Share based
compensation
|
94
|
|
619
|
|
294
|
Interest expense
(income)
|
-
|
|
-
|
|
206
|
Operating cash
flows before working capital
changes
|
7,746
|
|
51,194
|
|
43,174
|
Decrease in
inventories
|
1,263
|
|
8,347
|
|
23,808
|
Increase in trade
receivables
|
(3,527)
|
|
(23,309)
|
|
(50,384)
|
Increase (Decrease)
in other receivables, tax
receivable and prepayments
|
(382)
|
|
(2,521)
|
|
12,058
|
Decrease in trade
payable
|
(5,562)
|
|
(36,755)
|
|
(23,173)
|
Increase in taxes
payable
|
96
|
|
635
|
|
-
|
Decrease in accrued
liabilities, other payables
and amounts owned to related parties
|
(579)
|
|
(3,825)
|
|
(7,529)
|
Cash used in
operations
|
(945)
|
|
(6,234)
|
|
(2,046)
|
Interest
paid
|
-
|
|
-
|
|
-
|
Income tax
paid
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
Net cash used in
operating activities
|
(945)
|
|
(6,234)
|
|
(2,046)
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Acquisition of fixed
assets
|
-
|
|
-
|
|
(5,618)
|
Proceed from disposal
of property, plant and equipment
|
-
|
|
-
|
|
70
|
Increase in
restricted cash
|
(260)
|
|
(1,719)
|
|
-
|
|
|
|
|
|
|
Net cash used in
investing activities
|
(260)
|
|
(1,719)
|
|
(5,548)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Insurance of share
capital for equity financing
|
2,310
|
|
15,262
|
|
9,537
|
Advance from related
parties
|
28
|
|
186
|
|
|
|
|
|
|
|
|
Net cash generated
from financing activities
|
2,338
|
|
15,448
|
|
9,537
|
|
|
|
|
|
|
NET INCREASE IN
CASH & EQUIVALENTS
|
1,133
|
|
7,495
|
|
1,943
|
CASH &
EQUIVALENTS, BEGINNING OF YEAR
|
356
|
|
2,328
|
|
110
|
EFFECT OF FOREIGN
EXCHANGE RATE DIFFERENCES
|
(178)
|
|
(807)
|
|
275
|
|
|
|
|
|
|
CASH &
EQUIVALENTS, END OF YEAR
|
1,311
|
|
9,016
|
|
2,328
|
About Non-GAAP Financial Measures
In addition to China Ceramics' condensed consolidation financial
results under International Financial Reporting Standards ("IFRS"),
the Company also provides certain non-IFRS financial measures
(referred to as the "non-GAAP financial measures") for the second
half and full fiscal years ending December
31, 2017 and December 31,
2018, respectively, from their comparable IFRS measures.
Such non-GAAP financial measures are offered to supplement the
Company's audited financial statements, this earnings release and
the accompanying tables and include EBITDA and Adjusted EBITDA.
EBITDA is calculated as earnings before interest, tax,
depreciation and amortization (EBITDA). Adjusted EBITDA is
calculated as EBITDA less loss from asset devaluation, inventory
write-down and bad debt expense. Both are measures of the Company's
operating performance.
The Company uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors in evaluating the Company's ongoing operational
performance. In addition, the Company believes that these non-GAAP
financial measures provide investors with other methods for
assessing China Ceramics' operating results in a manner that is
focused on the performance of its ongoing operations. Readers are
cautioned not to view non-GAAP financial measures on a stand-alone
basis or as a substitute for results under IFRS, or as being
comparable to results reported or forecasted by other companies,
and should refer to the unaudited reconciliation presented below.
The Company has provided a reconciliation of these non-GAAP
financial measures to the most directly comparable IFRS financial
measure below as adjusted for the periods indicated:
CHINA CERAMICS
CO., LTD.
|
Unaudited Reconciliation of GAAP to
Non-GAAP: Net Income to EBITDA (1)
|
Six months ended
December 31, 2018 and December 31, 2017
|
(all figures in
000's)
|
|
|
2018
|
|
2017
|
|
RMB
|
USD
|
|
RMB
|
USD
|
Net
loss
|
(346,768)
|
(50,562)
|
|
(82,197)
|
(12,385)
|
Interest
expense
|
-
|
-
|
|
4
|
1
|
Interest
income
|
(36)
|
(5)
|
|
(32)
|
(5)
|
Income tax
expense
|
209
|
30
|
|
21,017
|
3,167
|
Depreciation
and amortization expense
|
5,801
|
846
|
|
7,245
|
1,092
|
EBITDA
|
(340,794)
|
(49,691)
|
|
(53,963)
|
(8,130)
|
Loss from asset
devaluation (2)
|
85,021
|
12,397
|
|
36,683
|
5,527
|
Inventory
write-down (3)
|
55,973
|
8,161
|
|
(2,733)
|
(412)
|
Bad debt
expense (4)
|
210,058
|
30,628
|
|
71,565
|
10,783
|
Adjusted
EBITDA
|
10,258
|
1,495
|
|
51,552
|
7,768
|
|
(1) EBITDA is
defined as earnings before interest, taxes, depreciation and
amortization
|
|
(2)
Non-cash write-down of fixed assets and land use
rights
|
|
(3)
Non-cash inventory write-down
|
|
(4)
Non-cash write-off of bad
debt expense
|
|
|
|
|
|
|
|
CHINA CERAMICS
CO., LTD.
|
Unaudited
Reconciliation of GAAP to Non-GAAP: Net Income to Adjusted EBITDA
(1)
|
Years ended
December 31, 2018 and December 31, 2017
|
(all figures in
000's)
|
|
|
|
2018
|
|
2017
|
|
RMB
|
USD
|
|
RMB
|
USD
|
Net
loss
|
(418,674)
|
(63,358)
|
|
(88,026)
|
(13,037)
|
Interest
expense
|
-
|
-
|
|
213
|
32
|
Interest
income
|
(36)
|
(5)
|
|
(32)
|
(5)
|
Income tax
expense
|
209
|
32
|
|
9,741
|
1,443
|
Depreciation
and amortization expense
|
11,608
|
1,757
|
|
15,514
|
2,298
|
EBITDA
|
(406,893)
|
(61,574)
|
|
(62,590)
|
(9,269)
|
Loss from asset
devaluation (2)
|
85,021
|
12,866
|
|
36,683
|
5,433
|
Inventory
write-down (reversal) (3)
|
55,973
|
8,470
|
|
(2,733)
|
(405)
|
Bad debt
expense (4)
|
316,438
|
47,887
|
|
71,565
|
10,599
|
Adjusted
EBITDA
|
50,539
|
7,649
|
|
42,925
|
6,358
|
|
(1) EBITDA is
defined as earnings before interest, taxes, depreciation and
amortization
|
|
(2)
Non-cash write-down of fixed assets and land use
rights
|
|
(3)
Non-cash inventory write-down
|
|
(4)
Non-cash write-off of bad
debt expense
|
|
View original
content:http://www.prnewswire.com/news-releases/china-ceramics-announces-second-half-and-full-year-financial-results-for-fiscal-2018-300840263.html
SOURCE China Ceramics Co., Ltd.