China New Borun Announces First Half Year of 2018 Unaudited Financial Results
BEIJING, Oct. 30, 2018 /PRNewswire/ -- China New Borun Corporation (NYSE: BORN; "Borun" or the "Company"), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the first half year ended June 30, 2018.
First Half Year of 2018 Quick View
- Total revenue decreased 12.2% to RMB940.4 million ($142.1 million[1]) from RMB1,071.0 million in the first half year of 2017.
- Gross profit decreased 54.1% to RMB65.7 million ($9.9 million) from RMB143.2 million in the first half year of 2017.
- Net income decreased 83.1% to RMB10.5 million ($1.6 million) from RMB62.0 million in the first half year of 2017.
- Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.41 ($0.06) for the first half year of 2018. Each ADS represents one of the Company's ordinary shares.
[1] |
This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the period ended June 30, 2018 were made at a rate of RMB6.6166 to USD1.00, the rate published by the People's Bank of China on June 30, 2018. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all. |
First Half Year of 2018 Financial Performance
For the first half year of 2018, revenue decreased by 12.2% year-over-year to RMB940.4 million ($142.1 million) from RMB1,071.0 million in the same period of 2017. The decrease in revenue was mainly due to lower sales volume of edible alcohol and its by-products.
Revenue breakdown by product lines is as follows:
- Revenue from edible alcohol decreased by 7.3% to RMB661.1 million ($99.9 million) in the first half year of 2018, compared to RMB713.0 million in the first half year of 2017. The sales volume of edible alcohol in the first half year of 2018 decreased by 18.4% year-over-year to 150,386 tons, while the average selling price of edible alcohol increased by 13.7% year-over-year to RMB4,396 per ton.
- Revenue from DDGS Feed decreased by 12.2% to RMB227.4 million ($34.4 million) in the first half year of 2018, compared to RMB258.9 million in the first half year of 2017. The sales volume of DDGS Feed in the first half year of 2018 decreased by 14.7% year-over-year to 137,161 tons, while the average selling price increased by 2.9% year-over-year to RMB1,658 per ton.
- Revenue from liquid carbon dioxide increased by 34.1% to RMB14.0 million ($2.1 million) in the first half year of 2018, compared to RMB10.5 million in the first half year of 2017. The sales volume of liquid carbon dioxide in the first half year of 2018 decreased by 14.8% year-over-year to 52,197 tons, while the average selling price increased by 57.4% year-over-year to RMB269 per ton.
- In 2017, we invested in and completed the construction of our AMPS manufacturing plant with an annual production capacity of 4,000 tons. AMPS is a chemical product that is widely used in many fields, including oilfield chemistry, water treatment and synthetic fibers. Revenue from AMPS products increased by 284.4% to RMB37.8 million ($5.7 million) in the first half year of 2018, compared to RMB9.8 million in the first half year of 2017. The sales volume of AMPS in the first half year of 2018 increased by 262.7% year-over-year to 2,067 tons, and the average selling price increased by 6.0% year-over-year to RMB18,283 per ton.
During the first half year of 2018, gross profit decreased by 54.1% to RMB65.7 million ($9.9 million) from RMB143.2 million in the same period of 2017. Gross margin for the first half year of 2018 decreased to 7.0%, from 13.4% in the same period of 2017, which was primarily attributable to the steeper increase in average corn cost, compare with selling price of edible alcohol.
Operating income decreased by 63.3% to RMB42.3 million ($6.4 million) in the first half year of 2018, from RMB115.5 million in the same period of 2017, primarily due to lower gross profit earned.
Selling expenses decreased by RMB0.1 million, or 6.5% to RMB1.7 million ($0.3 million) in the first half year of 2018, from RMB1.8 million in the same period of 2017.
General and administrative expenses decreased by RMB4.2 million, or 16.5% to RMB21.7 million ($3.3 million) in the first half year of 2018, from RMB25.9 million in the same period of 2017.
Income tax expenses in the third quarter of 2017 were RMB3.5 million ($0.5 million), representing an effective tax rate of 25.0%.
Net income decreased by 83.1% to RMB10.5 million ($1.6 million) in the first half year of 2018, compared to RMB62.0 million in the same period of 2017. In the first half year of 2018, basic and diluted earnings per share and per ADS were RMB0.41 ($0.06), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
As of June 30, 2018, cash and bank deposits of RMB1.1 billion ($164.3 million) increased by RMB358.6 million, compared with RMB728.3 million as of December 31, 2017.
About China New Borun Corporation
China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE that is widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at http://www.sec.gov.
Forward-looking Statements
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
CHINA NEW BORUN CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS |
|||||
December 31, |
June 30, |
||||
RMB |
RMB |
US$ |
|||
Assets |
|||||
Cash |
728,249,297 |
1,086,873,642 |
164,264,674 |
||
Trade accounts receivable, net of allowance for doubtful accounts |
509,737,390 |
374,097,731 |
56,539,270 |
||
Inventories |
434,185,431 |
864,790,353 |
130,700,111 |
||
Advance to suppliers |
562,196,185 |
116,421 |
17,595 |
||
Other receivables |
66,391,456 |
124,068,994 |
18,751,170 |
||
Prepaid expenses |
2,781,503 |
1,057,588 |
159,839 |
||
Total current assets |
2,303,541,262 |
2,451,004,729 |
370,432,659 |
||
Property, plant and equipment, net |
766,055,948 |
708,673,988 |
107,105,460 |
||
Land use right, net |
127,627,629 |
126,211,340 |
19,074,954 |
||
Total assets |
3,197,224,839 |
3,285,890,057 |
496,613,073 |
||
Liabilities and shareholders' equity |
|||||
Trade accounts payable |
36,890,637 |
96,856,426 |
14,638,398 |
||
Accrued expenses and other payables |
54,770,180 |
56,059,165 |
8,472,503 |
||
Income taxes payable |
66,717,710 |
18,227,885 |
2,754,872 |
||
Short-term borrowings |
698,667,011 |
763,361,371 |
115,370,639 |
||
Total current liabilities |
857,045,538 |
934,504,847 |
141,236,412 |
||
Bonds payable: outstanding principal amount of RMB300,000,000, bearing fixed annual interest rate of 6.5%, with maturity on November 2, 2021 (less unamortized debt issuance costs based on imputed interest rate of 6.75% of RMB5,419,012 and RMB4,712,184 ($712,176) as of December 31, 2017 and June 30, 2018, respectively)
|
294,580,988 |
295,287,816 |
44,628,331 |
||
Total liabilities |
1,151,626,526 |
1,229,792,663 |
185,864,743 |
||
Shareholders' equity |
|||||
Ordinary share – par value of RMB0.0068259, 25,725,000 shares authorized, issued and outstanding as of December 31, 2017 and June 30, 2018, respectively |
175,596 |
175,596 |
25,725 |
||
Additional paid-in capital |
468,132,187 |
468,132,187 |
70,751,169 |
||
Retained earnings – appropriated |
171,207,400 |
171,207,400 |
25,875,435 |
||
Retained earnings – unappropriated |
1,406,583,669 |
1,417,082,750 |
214,170,835 |
||
Accumulated other comprehensive loss |
(500,539) |
(500,539) |
(74,834) |
||
Total shareholders' equity |
2,045,598,313 |
2,056,097,394 |
310,748,330 |
||
Total liabilities and shareholders' equity |
3,197,224,839 |
3,285,890,057 |
496,613,073 |
||
CHINA NEW BORUN CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
|||||
For the six-month period ended, |
|||||
June 30, 2017 |
June 30, 2018 |
||||
RMB |
RMB |
US$ |
|||
Revenues |
1,071,003,283 |
940,373,341 |
142,123,347 |
||
Cost of goods sold |
927,765,691 |
874,660,760 |
132,191,875 |
||
Gross profit |
143,237,592 |
65,712,581 |
9,931,472 |
||
Operating expenses: |
|||||
Selling |
1,857,320 |
1,736,694 |
262,475 |
||
General and administrative |
25,926,437 |
21,659,207 |
3,273,465 |
||
Total operating expenses |
27,783,757 |
23,395,901 |
3,535,940 |
||
Operating income |
115,453,835 |
42,316,680 |
6,395,532 |
||
Other (income) expenses: |
|||||
Interest income |
(1,697,415) |
(1,576,502) |
(238,265) |
||
Interest expense |
34,603,020 |
26,792,679 |
4,502,717 |
||
Others, net |
(59,252) |
101,728 |
15,375 |
||
Total other expense, net |
32,846,353 |
28,317,905 |
4,279,827 |
||
Income before income taxes |
82,607,482 |
13,998,775 |
2,115,705 |
||
Income tax expense |
20,651,870 |
3,499,694 |
528,926 |
||
Net income |
61,955,612 |
10,499,081 |
1,586,779 |
||
Earnings per share: |
|||||
Basic and diluted |
2.41 |
0.41 |
0.06 |
||
Weighted average ordinary shares outstanding: |
|||||
Basic and diluted |
25,725,000 |
25,725,000 |
25,725,000 |
||
SOURCE China New Borun Corporation
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