TORONTO, May 15, 2019 /CNW/ - Boyuan Construction Group,
Inc. ("Boyuan" or the "Company") (TSX: BOY), an established
China-based construction and
engineering company, today reported its financial results for the
three month period ended March 31, 2019. All figures are in
U.S. dollars unless otherwise stated.
Third Quarter 2019 Highlights
- Revenue grew 6.7% to $121.3
million;
- Gross profit increased 8.5% to $9.4
million;
- Net income decreased to $1.4
million from $2.9 million; the
decrease was largely due to impairment loss on contract assets for
long outstanding receivables.
"Our continued revenue growth in the third quarter was the
result of our strategic focus on second tier cities and smaller
urban clusters, and the number of new construction projects
commenced in the past year," said Mr. Cai
Liang Shou, Chairman and CEO of Boyuan Construction Group.
"While our gross profit improved and our financial position remains
strong, our net income for the quarter was impacted by recognizing
an impairment loss on contract assets for long outstanding
receivables. Nevertheless, we remain focused on further growth
in and around Jiaxing, as well as other markets where high quality
projects present themselves."
Selected Second Quarter Financial Results
|
|
|
|
In thousands
except share and % data
|
Q3
2019
|
Q3
2018
|
Change
|
Revenue
|
$121,282
|
$113,635
|
+6.7%
|
Gross
profit
|
$9,375
|
$8,639
|
+8.5%
|
Gross profit
margin
|
7.7%
|
7.6%
|
+1.3%
|
EBITDA1
|
$3,649
|
$6,157
|
-40.7%
|
Net income
|
$1,370
|
$2,900
|
-52.8%
|
Earnings per share –
diluted
|
$0.05
|
$0.10
|
-50.0%
|
|
|
|
|
In thousands
except % data
|
March 31,
2019
|
June 30,
2018
|
Change
|
Total
Assets
|
$291,277
|
$272,617
|
+6.8%
|
Cash,
cash equivalents & restricted cash
|
$16,513
|
$15,783
|
+4.6%
|
Review of Third Quarter 2019 Financial Results
Revenue for the third quarter increased 6.7% to $121.3 million compared to $113.6 million for the same period last year. The
increase was attributable to the number of new construction
projects taken up in the past year, resulting from the Company's
continued focus on the relatively robust real estate market in
Jiaxing, Zhejiang province. For
the nine months period ended March 31,
2019, the Company has commenced construction on seven
material new projects with an aggregate contract value of
$136 million.
Cost of construction for the quarter was $111.9 million, an increase of 6.6% compared to
$105.0 million in the third quarter
of 2018. The two major components of the cost of construction are
direct material and labour costs. Direct material costs for the
quarter were $77.5 million and labor
costs were $28.8 million. In
comparison, direct material costs and labor costs were $71.5 million and $28.3
million respectively in the same quarter last year.
Gross profit for the quarter was $9.4
million, which represented a margin of 7.7% on revenue.
Gross profit for the corresponding period of last year was
$8.6 million, which represented a
margin of 7.6% on revenue. The higher gross margin for this period
was due to the smaller discount amount applied to the non-current
contract assets and accounts receivable compared to the same period
last year.
Other income for the quarter was $1.1
million, compared to $1.2
million for the same period last year. The major component
of other income is the accretion income from the discount on
non-current accounts receivable and contract assets.
G&A expenses were $1.0 million
this quarter, a decrease of $0.8
million from the same quarter last year. The decrease was
mainly attributable to the recovery of deposits relating to
construction projects that were written off in the past.
The Company has received some payments this quarter from
impairment loss on accounts receivable recognized in prior years,
thus making a net impairment loss reversal of $0.4 million. The Company also made additional
$6.5 million net impairment loss on
contract assets for long outstanding debts.
Interest expense for the quarter was $1.1
million, a decrease of $0.4
million compared to the interest expense of $1.5 million in the third quarter of 2018. The
decrease in interest expense was mainly due to the decrease in the
bank notes payable amount and the redemption of the Debentures in
the period.
The after-tax net income for the quarter was $1.4 million, or $0.05 per diluted share, compared to net income
of $2.9 million, or $0.10 per diluted share, for the same period last
year.
Boyuan had working capital of $63
million, including cash, cash equivalents, and restricted
cash totaling $16.5 million as at
March 31, 2019. 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
nine-month periods ended March 31,
2019 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.
_________________
1 EBITDA is defined as earnings before interest,
income taxes, depreciation and amortization. EBITDA is not a
defined performance measure under IFRS.
|
Conference Call Notice
A conference call for investors will be held on Tuesday, May 21, 2019 at 9:30 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 May 28, 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
5295155.
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.