TORONTO, May 15, 2018 /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 March 31, 2018. All figures
are in U.S. dollars unless otherwise stated.
Selected Quarterly Highlights
In thousands
except share and % data
|
Q3'18
|
Q3'17
|
Change
|
Revenue
|
$113,635
|
$62,085
|
82.9%
|
Gross
profit
|
$8,639
|
$7,441
|
16.1%
|
Gross profit
margin
|
7.6%
|
12.0%
|
(36.6%)
|
EBITDA1
|
$6,157
|
$4,771
|
29.1%
|
Net income
|
$2,900
|
$2,406
|
20.5%
|
Earnings per share -
diluted
|
$0.10
|
$0.08
|
25.0%
|
|
March 31,
2018
|
June 30,
2017
|
|
Total
Assets
|
$187,373
|
$157,611
|
18.9%
|
Cash, cash
equivalents and restricted cash
|
$14,844
|
$10,821
|
37.2%
|
"Revenue was strong this quarter from progress made on a number
of new construction projects that began during the past year," said
Mr. Cai Liang Shou, Chairman of
Boyuan Construction Group. "We identified a number of high quality
projects and initiated construction on ten new projects since the
beginning of the current fiscal year, with an aggregate contract
value of $206 million. We have
capitalized on our strong position in the robust Jiaxing,
Zhejiang province, but due to the
overall state of the real estate market in China, we remain cautious when taking on new
projects."
Q3 FY2018 Financial and Operational Highlights
- Revenue of $113.6 million, up
82.9% from $62.1 million for
Q3'17
- Gross profit of $8.6 million,
representing a gross margin of 7.6%, up from $7.4 million and 11.9% respectively
- EBITDA of $6.2 million, up 29.1%
from $4.8 million in Q3'17
- Net income of $2.9 million, up
20.5% from $2.4 million in Q3'17
_____________
|
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 third quarter ended March
31, 2018 was $113.6 million,
an increase of $51.5 million or 82.9%
from the corresponding period last year. Revenue is recognized on
the percentage-of-completion method. The substantial increase in
revenue was due to the larger number of new construction projects
taken up in the past two years. Due to the relatively robust real
estate market in Jiaxing, Zhejiang
province, the Company was able to identify a number of high quality
projects in this period. For the nine months period ended
March 31, 2018, the Company has
commenced construction on ten material new projects with an
aggregate contract value of $206
million. In comparison, new projects taken up in FY2017,
FY2016 amounted to $260 million and
$86 million respectively.
Cost of construction for Q3 FY2018 was $105 million, up 92.3% from $54.6 million for Q3 FY2017. 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 $71.5 million and
labour costs were $28.3 million in
this quarter. In comparison, direct material costs and labour costs
were $39.6 million and $13.9 million respectively in the same quarter
last year.
Gross profit for Q3 FY2018 was $8.6
million, representing a margin of 7.6% on revenue. Gross
profit for Q3 FY2017 was $7.4
million, representing a margin of 11.9% on revenue. The
lower gross margin for this period was due to the relatively
depressed state of real estate markets, as well as the larger
discount amount applied to the non-current unbilled revenue and
accounts receivable compared to the same period last year.
Other income was $1.2 million in
Q3 FY2018, compared to $1.5 million
in Q3 FY2017. The major component of other income is the accretion
income from the discount on non-current accounts receivable and
unbilled revenue.
G&A expenses were $1.8 million
in Q3 FY2018, an increase of $0.2
million or 12.8% from the same quarter last year. The
G&A expenses have been stable over the periods and the changes
are results of normal business fluctuations.
The Company has received payments this quarter from impairment
loss on unbilled revenue recognized in prior years and made a net
impairment loss reversal of $1.1
million. The Company recognized additional $3.3 million net impairment loss on accounts
receivable for long outstanding debts.
Interest expense was $1.5 million
in Q3 FY2018, up from the interest expense of $1.4 million in the same period last year. The
increase was mainly due to the increase in the bank notes payable
amount.
After-tax net income for Q3 FY2018 was $2.9 million, or $0.10 per fully diluted share, compared to
$2.4 million, or $0.08 per fully diluted share, for Q3 FY2017.
The Company had working capital of $44.6
million, including cash and cash equivalents totalling
$5.8 million for the period ended
March 31, 2018. This compares to
$49.5 million and $4.0 million, respectively, at June 30, 2017.
Boyuan's consolidated statements for the three-month period
ended March 31, 2018 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 second
quarter 2018 financial results on Wednesday,
May 16, 2018 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, May 23, 2018 at midnight.
To access the archived conference call, please dial 1-855-859-2056
or 416-849-0833 and enter the reservation number 7586548#.
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.