1H22 net revenue increased by 105% year on
year
1H22 number of vehicles sold increased 23% year
on year
Management to Host Conference Call on Tuesday,
September 13 at 5:30 p.m. ET
Cenntro Electric Group Limited (NASDAQ: CENN) (“Cenntro” or “the
Company”), a leading EV technology company with advanced, market-
validated electric commercial vehicles (“ECVs”), today announced
its financial results for the first half year ended June 30,
2022.
First Half 2022 Operational and Financial Highlights
- The number of commercial vehicles sold was 337 units, an
increase of 23% from 273 units sold in the same period of
2021.
- Net revenue was $5.0 million, an increase of 105% from
$2.5 million in the same period of 2021.
- Cash and cash equivalents were $183.0 million as of June
30, 2022, compared with $2.0 million as of June 30, 2021.
“During the first half of 2022, we continued to execute on our
strategic initiatives and grow our topline despite a challenging
macroeconomic environment. Sales volume of our electric commercial
vehicles reached 337 units, representing an increase of 23%
year-over-year. Out of that, we sold 132 units of our newly
launched Logistar 200 (the “LS 200”) model, which doubled our
average selling price. This demonstrates our capabilities for
executing our tiered product strategy while addressing various
customer demands amidst global uncertainty,” said Peter Wang, Chief
Executive Officer.
Mr. Wang continued, “We also made progress across multiple
fronts during the first half of 2022. First, we introduced three
new EV products, the Logistar 100 (the “LS 100”), Logistar 260 (the
“LS 260”) for the European market and Logistar 400 (the “LS 400”)
for the North American market. We have already begun receiving
pre-orders for these new products. These new vehicles come with
higher price points and will continue to improve our product mix.
Second, we made the strategic decision to bring advanced battery
technology and production in-house, which will strengthen our
supply chain. Third, we started new vehicle assembly in the U.S.
and Europe as well as began building out our EV distribution and
services infrastructure. These initiatives set a strong foundation
to accelerate our growth. Going forward, we believe our expanded
product lineup and leading technology will position us well to
capture tremendous growth opportunities in the transformation of
the global commercial fleet industry to zero-emission
vehicles.”
Edmond Cheng, Chief Financial Officer, added, “Increased vehicle
sales and improved product mix helped us achieve 105%
year-over-year revenue growth for the first six months of 2022.
These results reflect our continuous investment in product
development and partnership with the right OEMs to enhance our
product offerings to meet market demand. We have also stepped up
our investment in sales and marketing, infrastructure, and research
& development to support our growth objectives. However, in
light of the uncertain macroeconomic environment, we will remain
cautious in managing our expenditures and working capital in order
to preserve a strong balance sheet.”
Recent Developments & First Half 2022 Business
Highlights
- New Vehicle Development: EPA certification for LS 400 is
expected by end of September 2022 while its pilot production has
started; LS 100 rolled off from production lines and received EU
Type Approval; LS 260 received EU type approval and production has
commenced. The LS 400 is designed primarily for urban delivery
and services to cover two significant markets that include last
mile delivery and vocational fleets and upfitters. The Company has
showcased the LS 400 series at various key industry events and
exhibitions that have led to significant interest. Cenntro’s first
LS 100 rolled off the production line with deliveries to Europe
scheduled in the mid September with launches in the Asian,
Caribbean, and South American markets to follow. The LS 100 is a
versatile, compact light cargo van purpose-built to serve diverse
commercial applications, especially in urban areas with high
population density. The LS 260 is a new addition to the Logistar
series. This new vehicle will be targeted toward a wide range of
applications in the trades, couriers, express and parcel services,
logistics solutions, and facility management segments, with initial
deliveries to Europe scheduled in September.
The Company has opened the order books for
LS100, LS 260 and LS 400 models.
- Launch of Lithium Battery Project: The construction of the
battery factory building was completed, and internal
renovation has been progressing; Proprietary production machinery
has already been tested and validated; Filing for three
patents. Given the backdrop of increased battery costs and
global supply chain challenges, Cenntro set up a unit, Cennatic
Power Inc., to produce advanced lithium-ion batteries for its ECVs
to secure and stabilize its battery supply. Bringing production of
essential battery technologies and manufacturing process in-house
will enable the Company to expedite the development of ECVs, reduce
supply chain dependency on China, and lower battery cell
costs.
- Launch of Vehicle Assembly in U.S. and Europe: The European
assembly factory in Germany is fully functional; Pilot assembly
scaled in the New Jersey facility; Florida assembly capability will
be ready soon. The additional vehicle assembly in the U.S. and
Europe will boost the Company’s total manufacturing or assembly
plants to five. Assembly strategy and capacity is on track to serve
growing demands for its ECVs.
- Building Vehicle Distribution and Service Infrastructure:
Establishing EV centers with focus on the U.S. and European
markets; Developing and setting up parts distribution warehouses;
Signing up distributors/dealers/value-added resellers. Cenntro
is also establishing EV centers across the U.S., Poland, Germany,
Spain, Morocco and Jamaica to align with its go-to-market strategy
for new growth. Cenntro has initiated the transition from private
label distribution to a direct B2B marketing and sales team in
North America. The Company will assemble its Metro product in-house
and market Metro directly to its distributors in the U.S. Cenntro
has ended its channel distribution partnerships in the U.S. and
will now have full control over the production and sales in order
to assure product quality, reduce the overhead and boost brand
awareness.
First Half 2022 Financial Results
Net Revenues
Net revenue was $5.0 million in the first half of 2022, an
increase of 105% from $2.5 million in the first half of 2021. The
increase was due to both a 23% growth in sales volume as well as an
improvement of the average selling price (“ASP”) from $7,354 in
primarily selling Metro Car Kits last year to $14,400 in the
improved product mix to include 132 units of the LS 200 at a much
higher ASP.
Gross profit
Gross profit was $0.53 million in the first half of 2022, an
increase of 18% from $0.45 million in the first half of 2021. Gross
margin was 10.6% in the first half of 2022, compared with 18.3% in
the first half of 2021. The change in gross margin was primarily
due to both the inflation pressure on input costs such as battery
and the shipping costs, especially as shipping costs of a 40-foot
container to Hamburg or New York have risen to a high of $20,000
for the first half of 2022 from the average of $2,000 for the same
period last year. Recently in August, the average cost of shipping
the same 40-foot container has come down to $5,000.
Operating expenses
Total operating expenses were $24.7 million in the first half of
2022, compared with $5.0 million in the first half of 2021. The
increase was primarily driven by headcount growth and higher legal
and compliance costs to support our growth as a public company. In
addition, in the first half of 2022, we also incurred non-recurring
fees and expenses of approximately $6.5 million related to the
compensation to certain directors for their past services to the
Company and a non-recurring expense of approximately $1.8 million
for compensation in 2022 related to FOH divestiture. Excluding
these one-time costs, our operating expenses in the first half of
2022 would have been $16.4 million.
Net income (loss)
Net loss was $23.1 million in the first half of 2022, compared
with net loss of $4.5 million in the first half of 2021.
Adjusted EBITDA1
Adjusted EBITDA was negative $12.9 million in the first half of
2022, compared with Adjusted EBITDA of negative $3.0 million in the
first half of 2021.
Cash and cash equivalents balances
Cash and cash equivalents were $183.0 million as of June 30,
2022, compared with $2.0 million as of June 30, 2021.
First Half 2022 Results Conference Call
Cenntro Electric Group CEO Peter Wang, and CFO Edmond Cheng will
host a conference call followed by a question-and-answer session on
Tuesday, September 13, 2022 at 5:30 p.m. Eastern time to discuss
its financial results for the six-month period ended June 30,
2022.
Please register in advance of the conference call using the link
provided below. Conference access information will be provided upon
registration. Participant Online Registration:
https://s1.c-conf.com/diamondpass/10025106-fmsn3a1.html
The conference call will be broadcast live and available for
replay at https://edge.media-server.com/mmc/p/qrrriixa and via the
investor relations section of the Company's website at
ir.cenntroauto.com. A replay of the conference call will be
available after 9:30 p.m. Eastern time through September 21,
2022.
US/Canada
+1 855-883-1031
Australia
+61 7 3107-6325
Hong Kong
+852 800930639
Mainland China
+86 4001209216
Replay PIN
10025106
About Cenntro Electric Group Ltd.
Cenntro Electric Group Ltd. (or "Cenntro") (NASDAQ: CENN) is a
leading designer and manufacturer of electric light and medium-duty
commercial vehicles. Cenntro's purpose-built ECVs are designed to
serve a variety of organizations in support of city services,
last-mile delivery, and other commercial applications. Cenntro
plans to lead the transformation in the automotive industry through
scalable, decentralized production, and smart driving solutions
empowered by the Cenntro iChassis. As of December 31, 2021, Cenntro
has sold or put into service more than 3,700 vehicles in over 25
countries across North America, Europe, and Asia. For more
information, please visit Cenntro's website at:
www.cenntroauto.com.
Forward-Looking Statements
This communication contains "forward-looking statements" within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that are not historical facts.
Such statements may be, but need not be, identified by words such
as "may,'' "believe,'' "anticipate,'' "could,'' "should,''
"intend,'' "plan,'' "will,'' "aim(s),'' "can,'' "would,''
"expect(s),'' "estimate(s),'' "project(s),'' "forecast(s)'',
"positioned,'' "approximately,'' "potential,'' "goal,''
"strategy,'' "outlook'' and similar expressions. Examples of
forward-looking statements include, among other things, statements
regarding assembly and distribution capabilities, decentralized
production, and fully digitalized autonomous driving solutions. All
such forward-looking statements are based on management's current
beliefs, expectations, and assumptions, and are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from the results expressed or implied in this
communication. For additional risks and uncertainties that could
impact Cenntro's forward-looking statements, please see disclosures
contained in Cenntro's public filings with the Securities and
Exchange Commission (the “SEC”), including the "Risk Factors" in
Cenntro's Annual Report on Form 20-F filed with the SEC on April
25, 2022 and which may be viewed at www.sec.gov.
For Cenntro’s financial statements, please refer to the
Company’s current report on Form 6-K filed with the SEC on
September 13, 2022.
____________________________ 1 Represents a non-GAAP financial
measure. For additional information about non-GAAP measures,
including, where applicable, reconciliations to the most directly
comparable financial measures presented in accordance with U.S.
GAAP, please see “Non-GAAP Measures” below.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220913006241/en/
Investor Relations Contact: Chris Tyson MZ North America
CENN@mzgroup.us 949-491-8235 Company Contact:
PR@cenntroauto.com IR@cenntroauto.com
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