– Continued optimization of cash flows
–
TORONTO, Nov. 14, 2017 /CNW/ - Boyuan Construction
Group, Inc. (TSX: BOY, BOY.DB.A) ("Boyuan" or the
"Company"), a growing construction company in China of commercial, residential and municipal
infrastructure projects, today reported its financial results
for the three-month period ended September 30, 2017. All
figures are in U.S. dollars unless otherwise stated.
Selected Quarterly Highlights
In thousands
except share and % data
|
Q1'18
|
Q1'17
|
Change
|
Revenue
|
$61,909
|
$29,714
|
108.3%
|
Gross
profit
|
$5,739
|
$2,488
|
130.7%
|
Gross profit
margin
|
9.3%
|
8.4%
|
10.7%
|
EBITDA1
|
$5,100
|
$3,130
|
62.9%
|
Net income
|
$2,347
|
$470
|
399.4%
|
Earnings per share -
diluted
|
$0.08
|
$0.02
|
300.0%
|
|
September 30,
2017
|
June 30,
2017
|
|
Total
Assets
|
$233,205
|
$216,651
|
7.6%
|
Cash, cash
equivalents and restricted cash
|
$12,626
|
$10,821
|
16.7%
|
"We continue to be very selective in taking on new construction
projects," stated Mr. Cai Liang
Shou, Chairman of Boyuan Construction Group. "In the first
quarter of fiscal 2018 we have started construction of 6 projects
with an aggregate contract value of $139.4
million. Five of these six projects are in the Jiaxing area,
which is home to Boyuan headquarters and a strategic focus of our
growth."
Q1 FY2018 Financial and Operational Highlights
- Revenue of $61.9 million, up
108.3% from $29.7 million for
Q1'17
- Gross profit of $5.7 million,
representing a gross margin of 9.3%, up from $2.5 million and 8.4% respectively
- EBITDA was $5.1 million, compared
with 3.1 million in Q1'17
- Net income of $2.3 million up
from $0.5 million for Q1'17
- Initiated construction on three residential development
projects, an industrial development project and a museum in
Jiaxing, Zhejiang province with a
total value of $90.3 million
- Initiated construction on a mixed-use project in Wanning City,
Hainan province valued at
$49.1 million
________________________
|
1 EBITDA
is defined as earnings before interest, income taxes, depreciation
and amortization. EBITDA is not a defined performance measure under
IFRS.
|
Review of Financial Results
Revenue for the first quarter ended September 30, 2017 was $61.9 million, an increase of 108.4% from
$29.7 million for corresponding
period last year. The substantial increase in revenue in the first
quarter of FY2018 was primarily a result of the abnormally low
revenue in the first quarter of FY2017 due to a combination of
smaller number of new projects taken up in 2016 and the timing of
construction activities in that period. Revenue is recognized on
the percentage-of-completion method.
Cost of construction for Q1 FY2018 was $56.2 million, up 106.6% from $27.2 million for Q1 FY2017. The increase was
primarily a result of higher expenses associated with larger
project volume. Cost of construction includes all direct material,
labour, subcontract and other related costs, such as equipment
repairs. The two major components of the cost of construction are
direct material and labour costs. Direct material costs were
$37.3 million and labour costs were
$15.9 million in this quarter. In
comparison, direct material costs and labour costs were
$18.8 million and $7.5 million in the same quarter last year.
Gross profit for Q1 FY2018 was $5.7
million, representing a margin of 9.3% on revenue. Gross
profit for Q1 FY2017 was $2.5
million, representing a margin of 8.4% on revenue.
Other income was $1.2 million in
Q1 FY2018, compared to $1.5 million
in Q1 FY2017. The major component of other income is the accretion
income from the discount on non-current accounts receivable and
unbilled revenue. Accretion income from the discount on non-current
accounts receivable and unbilled revenue for the periods ended
September 30, 2017 and 2016 was
$1.16 million and $1.46 million respectively.
G&A expenses were $1.0 million
in Q1 FY2018 compared to $1.5 million
in Q1 FY2017. The decrease was primarily due to the recovery of
deposits relating to construction projects that were written off in
the past.
In Q1 FY2018 the Company has provided for impairment loss on
long outstanding and overdue accounts receivable amounting to
$1.1 million, compared to
$0.02 million for Q1 FY2017.
Interest expense was $1.8 million
in Q1 FY2018, compared to $1.7
million in the same period last year. The increase was
mainly due to the additional interest paid on the larger amount of
bank notes payable in the period.
After-tax net income for Q1 FY2018 was $2.3 million, or $0.08 per fully diluted share, compared to
$0.5 million, or $0.02 per fully diluted share, for Q1 FY2017.
The Company had working capital of $50.0
million, including cash, cash equivalents, and restricted
cash totalling $12.6 million for the
period ended September 30, 2017. This
compares to $49.5 million and
$10.8 million, respectively, at
June 30, 2017.
Boyuan's consolidated statements for the three-month period
ended September 30, 2017 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.
Conference Call Notice
The Company will hold a conference call to discuss its first
quarter 2018 financial results on Wednesday,
November 15, 2017 at 9:30 A.M.
(ET). Mr. Paul Law, Boyuan's
Chief Financial Officer, will host the call.
All interested parties can join the call by dialing 647-427-7450
or 1-888-231-8191. Please dial in 15 minutes prior to the call to
secure a line.
The conference call will be archived for replay until
Wednesday, November 22, 2017 at
midnight. To access the archived conference call, please dial
1-855-859-2056 or 416-849-0833 and enter the reservation number
5399755#.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China,
Boyuan Construction Group, Inc. is in the business of commercial
building and residential construction, municipal infrastructure and
engineering projects. In its last three fiscal years ending
June 30, 2017, Boyuan completed 42
projects for a number of private and public-sector clients.
Boyuan's current project backlog includes residential, commercial,
industrial and mixed-use developments. From its operating bases in
Zhejiang Province and in
Hainan Province, Boyuan focuses on
construction projects in China's
fast-growing regions of the Yangtze River Delta and the
Hainan Province. 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, 2017 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.