Changfeng Revenue Up 39%, Gross Profit Up 40% and Net Income Up 52% for the Three Months Ended March 31, 2014 With Compared t...
May 15 2014 - 10:12AM
Marketwired Canada
Changfeng Energy Inc. (TSX VENTURE:CFY) ("Changfeng" or the "Company") is
pleased to announce that the Company has filed its unaudited condensed interim
consolidated financial results for the first quarter ended March 31, 2013. The
unaudited condensed interim consolidated financial results and Management
Discussion and Analysis can be downloaded from www.SEDAR.com or from the
Company's website at www.changfengenergy.com.
Summary of the First Quarter of 2014 Consolidated Financial Results
---------------------------------------------------------------------------
In thousands of Canadian dollars Three months ended March 31,
except percentages and per share 2014 2013 Change %
amounts
------------------------------------- -------------------------------------
Revenue 13,381 9,623 3,758 39%
------------------------------------- -------------------------------------
Gross margin 7,790 5,572 2,218 40%
------------------------------------- -------------------------------------
Net income 1,930 1,273 657 52%
------------------------------------- -------------------------------------
EBITDA (1) 5,019 3,001 2,018 67%
------------------------------------- -------------------------------------
Note:
(1) See Non- IFRS Financial Measures in this Press Release.
Sales from the gas distribution utility for the three months ended March 31,
2014 were $11.4 million, an increase of $3.4 million, or 43%, from $8.0 million
for same period of 2013. This increase was attributable to the 11.5%
appreciation of exchange rate between the Chinese RMB and the Canadian dollar,
an increase in connection fees in the Sanya operation, increased gas volume sold
of 11.0 million m3 in the Sanya operation in the first three months of 2014
compared to 10.9 million m3 sold in Sanya operation in the same period of 2013;
and increased gas volume sold of 0.3 million m3 in the Xiangdong operation in
the first three months of 2014 compared to 0.0 million m3 sold in the same
period of 2013.
Total revenue from the CNG refueling retail station for the three months ended
March 31, 2014 was $2.0 million, an increase of $0.3 million, or 18%, from $1.7
million for same period of 2013. The increase was attributable to the combined
effect of the increased gas volume sold and the appreciation of exchange rate
between the Chinese RMB and the Canadian dollar. (3.0 million m3 in the three
months ended March 31, 2014 compared to 2.8 million m3 sold in the same period
of 2013). The Company has been upgrading its station's refueling capacity to
meet the increasing demand that is primarily driven by both rising gasoline
prices and continued government support for clean energy vehicles. It is
expected that more existing gasoline-fueled buses in the city will be converted
into dual-fuel vehicles (gasoline/CNG).
Gross margin for the first quarter of 2014 increased $2.2 million, or 40%, to
$7.8 million from $5.6 for the comparable period in 2013. The gross margin
percentage of 58% for the first quarter of 2014 is approximately the same as for
the first quarter of 2013.
General and administrative expenses for the first quarter of 2014 were $2.7
million, an increase of $0.6 million, or 27%, from $2.2 million in the same
period of 2013. The increase was attributable to higher employee salaries and
benefits as a result of a higher inflation rate in China, additional employees,
higher conference and professional fees and higher exchange rate between the
Chinese RMB and the Canadian dollar. General and administrative expenses as a
percentage of sales for the first quarter of 2014 decreased to 20% from 22% in
the first quarter of 2013.
Travel and business development expenses for the first quarter of 2014 were $1.1
million, an increase of $0.1 million, or 12%, from $1.0 million in the first
quarter of 2013. Travel and business development expenses as a percentage of
sales for the first quarter of 2014 decreased to 8% from 10% in the first
quarter of 2013. These expenses normally fluctuate with travel and business
development activities in mainland China as the Company seeks to develop new
projects in close proximity to the new national pipelines.
Net income for the first quarter of 2014 was $1.9 million, or $0.030 per share
(basic and diluted) compared to $1.3 million or $0.020 per share (basic and
diluted) for the same period in 2013, primarily due to the reasons discussed
above.
EBITDA (non-IFRS measure as identified and defined under section "Non-IFRS
Measures") for the first quarter of 2014 was $5.0 million, an increase of $2.0
million, or 67%, from $3.0 million for the same period of 2013. The increase was
driven primarily by higher sales. EBITDA as a percentage of revenue for the
first quarter of 2014 was 38%, compared to 31% in the first quarter of 2013,
representing an increase of 7% due to the sales increases but was partially
offset by higher operating expenses, as discussed above.
Financial Position
Cash increased by $0.05 million to $15.20 million at March 31, 2014 from $15.15
million at December 31, 2013, primarily resulting from cash provided during the
quarter by operating activities of $2.1 million and effects of foreign exchange
on cash balances of $0.2 million, offset by $0.1 million repayment of long-term
debt, $0.3 million for share buyback and cash used for capital expenditures of
$1.9 million during the quarter.
Net cash provided by operations was $2.1 million for the first quarter of 2014
compared to $1.7 million for the same period of 2013.
Cash used in financing activities in the first quarter of 2014 included a $0.1
million principle payment of long-term debt and $0.3 million paid for the share
buyback.
Capital expenditures in property and equipment totaled $1.9 million in the first
quarter of 2014 compared to $2.2 million in the same period of 2013. The
expenditures were mainly related to the purchase of equipment for the Xiangdong
project and the on-going construction of pipeline networks to connect new
customers in the Sanya Region.
Changfeng will finance the majority of the upcoming construction of projects
under development in mainland China through its long-term bank loans with BOC
Sanya and BOC Pingxiang, as well as operating cash flow from its existing
operations.
Non-IFRS Financial Measures
The Company uses the following non-IFRS financial measure: EBITDA. The Company
believes this non-IFRS financial measure provides useful information to both
management and investors in measuring the financial performance and financial
condition of the Company for the reasons outlined below.
Management uses this non-IFRS financial measure to exclude the impact of certain
expenses and income that must be recognized under IFRS when analyzing
consolidated operating performance, as the excluded items are not necessarily
reflective of the Company's underlying operating performance and make
comparisons of underlying financial performance between periods difficult. From
time to time, the Company may exclude additional items if it believes doing so
would result in a more effective analysis of underlying operating performance.
The exclusion of certain items does not imply that they are non-recurring.
This measure do not have a standardized meaning prescribed by IFRS and therefore
they may not be comparable to similarly titled measures presented by other
publicly traded companies and should not be construed as an alternative to other
financial measures determined in accordance with IFRS. This measure is listed
and defined below:
EBITDA
EBITDA is defined herein as income before income tax expense, interest expense,
depreciation and amortization, share of loss of investment in associate, as well
as non-cash stock-based compensation expense. EBITDA does not have any
standardized meaning prescribed by IFRS and therefore may not conform to the
definition used by other companies. A reconciliation of net income to EBITDA for
each of the periods presented as follows:
---------------------------------------------------------------------------
In thousands Three months ended March 31,
(except for % figures) 2014 2013 Change %
---------------------------------------------------------------------------
Net Income 1,930 1,273 657 52%
Add (less):
Income tax 1,469 744 725 97%
Interest income (9) (9) 0 0%
Share of loss of investment in
associate 7.6 0.3 7 2333%
Stock-based compensation 87 - 87 100%
Amortization 1,044 551 493 89%
Interest expense 490 442 48 11%
---------------------------------------------------------------------------
EBITDA 5,019 3,001 2,018 67%
---------------------------------------------------------------------------
About Changfeng Energy Inc.
Changfeng Energy Inc. is a natural gas service provider with operations located
throughout the People's Republic of China. The Company services industrial,
commercial and residential customers, providing them with natural gas for
heating purposes and fuel for transportation. The Company has developed a
significant natural gas pipeline network as well as urban gas delivery networks,
stations, substations and gas pressure regulating stations in Sanya City &
Haitang Bay. Through its network of pipelines, the Company provides safe and
reliable delivery of natural gas to both homes and businesses. The Company is
headquartered in Toronto, Ontario and its shares trade on the Toronto Venture
Exchange under the trading symbol "CFY". For more information, please visit the
Company website at www.changfengenergy.com.
Forward-Looking Statements
Information set forth in this news release may involve forward-looking
statements under applicable securities laws. The forward-looking statements
contained herein are expressly qualified in their entirety by this cautionary
statement. The forward-looking statements included in this document are made as
of the date of this document and the Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as expressly
required by applicable securities legislation. Although Management believes that
the expectations represented in such forward-looking statements are reasonable,
there can be no assurance that such expectations will prove to be correct. This
news release does not constitute an offer to sell or solicitation of an offer to
buy any of the securities described herein and accordingly undue reliance should
not be put on such.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSXV) accepts responsibility for the adequacy
or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Changfeng Energy Inc.
Mr. Yan Zhao CPA. CA
Chief Financial Officer
416.362.5032/647.528.0115
yan.zhao@changfengenergy.com
Changfeng Energy Inc.
Ms. Ann S.Y.Lin
VP, Corporate Development and Corporate Secretary
416.362.5032
ann@changfengenergy.com
www.changfengenergy.com
CF Energy (TSXV:CFY)
Historical Stock Chart
From May 2024 to Jun 2024
CF Energy (TSXV:CFY)
Historical Stock Chart
From Jun 2023 to Jun 2024