NEW YORK, April 27, 2012 /PRNewswire/ -- Gushan
Environmental Energy Limited ("Gushan" or the "Company"; NYSE: GU),
a producer of biodiesel and a manufacturer of copper products in
China, today announced its
unaudited consolidated financial results for the fourth quarter and
full year ended December 31,
2011.
As of November 12, 2010, the ratio
for Gushan's American Depositary Shares ("ADS") representing
ordinary shares changed from one (1) ADS representing two (2)
ordinary shares to one (1) ADS representing ten (10) ordinary
shares. Gushan presents all per ADS data and number of ADSs in this
announcement as if the ratio change was effective as of the
beginning of the earliest period presented.
Highlights for the Fourth Quarter of 2011
(Note 1)
- Total revenues increased by 70.4% year-to-year and decreased by
15.9% quarter-on-quarter to RMB399.6
million (US$63.5
million).
- Gross profit amounted to RMB30.8
million (US$4.9 million),
compared to a gross profit of RMB18.3
million for the fourth quarter of 2010 and a gross profit of
RMB3.8 million for the third quarter
of 2011.
- Loss from operations amounted to RMB678.7 million (US$107.8
million), compared to a profit from operations of
RMB68.4 million for the fourth
quarter of 2010 and a loss from operations of RMB18.4 million for the third quarter of
2011.
- Net loss attributable to the Company amounted to RMB683.1 million (US$108.5
million), compared to a net profit of RMB61.4 million for the fourth quarter of 2010
and a net loss of RMB20.7 million for
the third quarter of 2011.
- Non-GAAP net loss attributable to the Company amounted to
RMB8.7 million (US$1.4 million), compared to a non-GAAP net loss
attributable to the Company of RMB40.0
million for the fourth quarter of 2010 and a non-GAAP net
loss attributable to the Company of RMB18.5
million for the third quarter of 2011. (Note
2)
- Sales volume of biodiesel decreased by 98.5% year-to-year and
by 59.6% quarter-on-quarter to 82 tons. (Note
3)
- Average selling price of biodiesel increased by 39.7%
year-to-year and decreased by 0.3% quarter-on-quarter to
RMB6,754 (US$1,073.1) per ton. (Note
3)
- Sales volume of recycled copper products increased by 81.1%
year-to-year and decreased by 10.2% quarter-on-quarter to 6,860
tons.
- Average selling price of recycled copper products decreased by
5.7% year-to-year and by 14.9% quarter-on-quarter to RMB50,615 (US$8,041.9) per ton.
- Cash balance amounted to RMB65.5
million (US$10.4 million) as
of December 31, 2011.
Highlights for the Full Year 2011
- Total revenues increased by 254.9% to RMB1,449.7 million (US$230.3 million) compared to RMB408.5 million for 2010.
- Gross profit amounted to RMB44.8
million (US$7.1 million)
compared to a gross loss of RMB73.4
million for 2010.
- Loss from operations amounted to RMB734.9 million (US$116.8
million) compared to a loss from operations of RMB1,127.4 million for 2010.
- Net loss attributable to the Company amounted to RMB747.7 million (US$118.8
million) compared to a net loss of RMB1,109.0 million for 2010.
- Non-GAAP net loss attributable to the Company amounted to
RMB70.0 million (US$11.1 million) compared to a non-GAAP net loss
of RMB212.0 million for 2010 (Note
2)
- Sales volume of biodiesel decreased by 80.7% to 8,178 tons
compared to 2010.
- Average selling price of biodiesel increased by 27.5% to
RMB5,742 (US$912.3) per ton compared to 2010.
- Sales volume of recycled copper products increased by 511.5% to
23,154 tons as compared to 2010.
- Average selling price of recycled copper products increased by
6.4% to RMB57,113 (US$9,074.3) per ton as compared to 2010.
Note 1: Translation from RMB into US$ at
RMB6.2939 to US$1.00,
see "Currency Convenience Translation" below.
Note 2: GAAP represents Generally
Accepted Accounting Principles in the
United States of America ("U.S. GAAP" or "GAAP") in this
press release. All non-GAAP measures exclude share-based
compensation expenses, impairment loss of and loss on
disposal of property, plant and equipment, impairment loss of
goodwill, land use rights and Value Added Tax ("VAT")
recoverable, and change in fair value of contingent
consideration liabilities, provision (reversal) for
consumption tax and income tax effect thereof. For further
details on non-GAAP measures, please refer to the reconciliation
table and a detailed discussion of management's use of non-GAAP
information set forth elsewhere in this announcement.
Note 3: Sales volume of biodiesel includes
biodiesel sold as a refined oil product to the fuel market and
biodiesel sold as fatty acid methyl ester, an intermediate product
to the chemical industry. Average selling price of biodiesel
represents total average selling price of biodiesel sold as a
refined oil product to the fuel market and biodiesel sold as an
intermediate product to the chemical industry.
"Gushan's recycled copper products business remained a positive
contributor to the Company's fourth quarter results despite a drop
in copper prices amid the slowing of China's economy, and we remain confident in
the long-term outlook for our recycled copper business," said
Jianqiu Yu, Chairman and Principal
Executive Officer of Gushan. "In our biodiesel business, while we
saw some improvement in diesel prices during the quarter, raw
material shortages remain an obstacle to resuming large-scale
biodiesel production. We will continue to carefully monitor the raw
material situation and market conditions as we evaluate if and when
we can economically resume production at idled plants."
Financial Results for the Fourth Quarter of
2011
Revenues
The Company's revenues amounted to RMB399.6 million (US$63.5
million) for the fourth quarter of 2011, representing an
increase of 70.4% from RMB234.5
million for the fourth quarter of 2010 and a decrease of
15.9% from RMB475.3 million for the
third quarter of 2011.
The increase in revenues on a year-to-year basis was mainly due
to the revenue contribution of the recycled copper products
business. During the fourth quarter of 2011, the revenues from our
recycled copper products business amounted to RMB395.8 million (US$62.9
million), comprising revenue from third parties attributable
to our two consolidated subsidiaries, Mianyang Jin Xin Copper
Company Limited ("Jin Xin") and
Hunan Yinlian Xiangbei Copper Company Limited ("Xiangbei"), of
RMB263.2 million (US$41.8 million) and RMB132.6 million (US$21.1
million), respectively. The Company acquired controlling
interests in and began consolidating the operating results of each
of Jin Xin and Xiangbei in
November 2010 and August 2011, respectively.
The Company's revenue from its recycled copper products business
totaled RMB395.8 million
(US$62.9 million) for the fourth
quarter of 2011, representing a decrease of 16.4% from RMB473.5 million for the third quarter of 2011.
The average selling price of recycled copper products decreased by
5.7% from RMB53,697 per ton for the
fourth quarter of 2010 and by 14.9% from RMB59,473 per ton for the third quarter of 2011
to RMB50,615 (US$8,041.9) per ton for the fourth quarter of
2011. The decrease in revenue on a sequential quarterly basis was
mainly due to a decrease in Jin
Xin's revenue by 37.6% from RMB421.7
million for the third quarter of 2011 to RMB263.2 million (US$41.8
million) for the fourth quarter of 2011, reflecting mainly a
decrease in sales volume of recycled copper products by 28.0% from
6,761 tons for the third quarter of 2011 to 4,868 tons for the
fourth quarter of 2011. The decrease in Jin
Xin's output in the fourth quarter of 2011 was mainly due to
the decrease in supply of raw materials as the suppliers were
unwilling to sell all their inventories when the market prices of
copper raw materials dropped by 23.5% per ton compared to the third
quarter of 2011. The decrease in Jin
Xin's revenues was offset by an increase in Xiangbei's
revenues from RMB51.8 million for the
third quarter of 2011 to RMB132.6
million (US$21.1 million) for
the fourth quarter of 2011. The Company consolidated only two
months of Xiangbei's operating results in the third quarter of 2011
since the acquisition date in August
2011 whereas the Company consolidated three months of
Xiangbei's operating results in the fourth quarter of 2011.
The Company's revenue from its biodiesel business totaled
RMB3.8 million (US$0.6 million) for the fourth quarter of 2011,
representing a decrease of 87.1% from RMB29.5 million for the fourth quarter of 2010
and an increase of 116.1% from RMB1.8
million for the third quarter of 2011.
The decrease in revenue from the biodiesel business on a
year-to-year basis was mainly due to a decrease in the sales volume
of both biodiesel and biodiesel by-products. This decline in volume
was attributable to the continued suspension of production at most
of the Company's biodiesel plants due primarily to the continued
shortage of raw materials and a slowing PRC economy. Such shortage
was due mainly to local governments cracking down on certain
alleged practices of vendors of used cooking oil that forced some
of our suppliers to suspend operations. The increase in revenue
from the biodiesel business on a sequential quarterly basis was
mainly due to revenues from sales of raw materials in certain
plants as the Company did not expect to resume its production of
biodiesel and biodiesel by-products on a large scale basis in the
near future.
The sales volume of biodiesel amounted to 82 tons for the fourth
quarter of 2011, representing a decrease of 98.5% from 5,635 tons
for the fourth quarter of 2010 and a decrease of 59.6% from 203
tons for the third quarter of 2011. The average selling price of
biodiesel was RMB6,754 (US$1,073.1) per ton for the fourth quarter of
2011, representing an increase of 39.7% from RMB4,835 per ton for the fourth quarter of 2010
and a decrease of 0.3% from RMB6,771
per ton for the third quarter of 2011.
The sales volume of biodiesel by-products amounted to 220 tons
for the fourth quarter of 2011, representing a decrease of 78.4%
from 1,017 tons for the fourth quarter of 2010, and an increase of
91.3% from 115 tons for the third quarter of 2011. The average
selling price of biodiesel by-products was RMB2,806 (US$445.8)
per ton for the fourth quarter of 2011, representing an increase of
29.3% from RMB2,170 per ton for the
fourth quarter of 2010 and a decrease of 16.6% from RMB3,365 per ton for the third quarter of
2011.
Cost of Revenues
Cost of revenues for the fourth quarter of 2011 totaled
RMB368.8 million (US$58.6 million), representing an increase of
70.5% from RMB216.3 million for the
fourth quarter of 2010 and a decrease of 21.8% from RMB471.4 million for the third quarter of 2011.
The increase on a year-to-year basis was mainly due to an increase
in the cost of revenues from the Company's recycled copper products
business by 82.7% from RMB191.7
million for the fourth quarter of 2010 to RMB350.3 million (US$55.7
million) for the fourth quarter of 2011. The decrease on a
sequential quarterly basis was mainly due to the decrease in sales
volume of recycled copper products.
The cost of revenues of the Company's recycled copper products
business totaled RMB350.3 million
(US$55.7 million) for the fourth
quarter of 2011, representing an increase of 82.7% from
RMB191.7 million for the fourth
quarter of 2010 and a decrease of 24.6% from RMB464.4 million for the third quarter of
2011.
The increase on a year-to-year basis was mainly due to an
increase in sales volume by 81.1% from 3,787 tons for the fourth
quarter of 2010 to 6,860 tons for the fourth quarter of 2011. The
unit cost of raw materials decreased by 11.7% from RMB48,544 per ton for the fourth quarter of 2010
to RMB42,872 (US$6,811.7) per ton for the fourth quarter of
2011.The decrease on a sequential quarterly basis was mainly due to
a decrease in sales volume by 10.2% from 7,635 tons for the third
quarter of 2011 to 6,860 tons for the fourth quarter of 2011. The
unit cost of raw materials decreased by 23.5% from RMB56,023 per ton for the third quarter of 2011
to RMB42,872 (US$6,811.7) per ton for the fourth quarter of
2011.
The cost of revenues of the Company's biodiesel business totaled
RMB18.5 million (US$2.9 million) for the fourth quarter of 2011,
representing a decrease of 24.5% from RMB24.5 million for the fourth quarter of 2010
and an increase of 164.6% from RMB7.0
million for the third quarter of 2011. Excluding the
reversal of the provision for consumption tax, cost of revenues of
the Company's biodiesel business for the fourth quarter of 2011
decreased by 47.3% from the fourth quarter of 2010.
Cost of revenues of the Company's biodiesel business included a
reversal of provision for consumption tax of RMB10.6 million during the fourth quarter of
2010. The reversal of the provision for consumption tax was made as
a result of the issuance of Caishui [2010] No. 118, Notice
Regarding the Exemption from Consumption Tax on Pure Biodiesel Made
from Waste Animal Fats or Vegetable Oils ("Caishui 118") by the
Ministry of Finance and the State Administration of Taxation of the
PRC ("SAT") which clarified that, subject to fulfillment of certain
conditions, pure biodiesel made from waste animal fat or vegetable
oil is exempt from consumption tax in China.
The decrease in cost of revenues of the Company's biodiesel
business on a year-to-year basis was primarily attributable to a
decrease in the Company's sales volume of both biodiesel and
biodiesel by-products. This was partially offset by an increase in
the overall average unit cost of used cooking oil, which increased
by 16.7% from RMB3,981 per ton for
the fourth quarter of 2010 to RMB4,647 (US$738.3)
per ton in the fourth quarter of 2011. The increases in the cost of
used cooking oil were caused by an increase in the Company's
suppliers' costs, which are primarily affected by general cost
inflation, particularly in labor and transportation in China, as well as a general increase in prices
charged by the upstream suppliers. The increase in cost of revenues
of the Company's biodiesel business on a sequential quarterly basis
was primarily attributable to the provision for inventory of
RMB11.3 million (US$1.8 million). This was partially offset by a
decrease in the average unit cost of used cooking oil, which
decreased by 7.8% from RMB5,039 per
ton for the third quarter of 2011 to RMB4,647 (US$738.3)
per ton in the fourth quarter of 2011.
Gross Profit (Loss)
The Company's gross profit for the fourth quarter of 2011
totaled RMB30.8 million (US$4.9 million), compared to a gross profit of
RMB18.3 million for the fourth
quarter of 2010 and a gross profit of RMB3.8
million for the third quarter of 2011.
The Company's gross profit for the fourth quarter of 2011 was
composed of a gross profit of RMB45.5
million (US$7.2 million) from
its recycled copper products business, representing a gross profit
margin of 11.5%, which was partially offset by a gross loss of
RMB14.7 million (US$2.3 million) from its biodiesel business,
representing a gross loss margin of 388.3%.
The Company's gross profit for the fourth quarter of 2010 was
composed of a gross profit of RMB13.4
million from its recycled copper products business,
representing a gross profit margin of 6.5%, and a gross profit of
RMB4.9 million from its biodiesel
business, representing a gross profit margin of 16.6%. Excluding
the reversal of the provision for the consumption tax in 2010, the
gross loss and gross loss margin of the Company's biodiesel
business would have been RMB5.7
million and 19.3% for the fourth quarter of 2010.
The Company's gross profit for the third quarter of 2011
consisted of a gross profit of RMB9.1
million from its recycled copper products business,
representing a gross profit margin of 1.9% and a gross loss of
RMB5.2 million from its biodiesel
business, representing a gross loss margin of 298.7%.
The improvement in gross profit margin of the Company's recycled
copper products business on both a year-to-year and sequential
quarterly basis was mainly caused by a widening spread between the
average selling price of recycled copper products and the average
unit cost of raw materials. Furthermore, the Company has made a
provision for inventory write-downs of RMB10.2 million for its recycled copper products
business for the third quarter of 2011 as a result of the decrease
in the average selling price in October
2011, such provision was utilized during the fourth quarter
of 2011 and hence reduced the cost of revenues in the fourth
quarter of 2011. On a year-to-year basis, the average unit costs of
raw materials for recycled copper products business decreased by
11.7% while the average selling price of its recycled copper
products decreased by 5.7%. On a sequential quarterly basis, the
average unit costs of raw materials for recycled copper products
business decreased by 23.5% while the average selling price of its
recycled copper products decreased by 14.9%.
The deterioration in the gross margin of the Company's biodiesel
business on both a year-to-year and sequential quarterly basis was
mainly due to a provision for inventory write-downs because higher
fixed costs of manufacturing were used to calculate the quarter-end
inventory balances as a result of a low utilization rate during the
fourth quarter of 2011.
Research and Development Expenses
Research and development expenses totaled RMB0.1 million (less than US$0.1 million) in the fourth quarter of 2011, as
compared to RMB0.9 million for the
fourth quarter of 2010 and RMB0.1
million for the third quarter of 2011. The decrease on a
year-to-year basis was mainly due to a decrease in depreciation
expenses as a result of a lower cost base for certain of the
Company's property, plant and equipment after these assets were
impaired in 2010.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the fourth
quarter of 2011 totaled RMB29.9
million (US$4.8 million), as
compared to RMB32.6 million for the
fourth quarter of 2010 and RMB17.7
million for the third quarter of 2011.
The decrease on a year-to-year basis was mainly due to a drop in
year-end bonus payments from RMB13.0
million for 2010 to RMB3.2
million (US$0.5 million) for
2011. The increase on a sequential quarterly basis was mainly due
to an increase in staff costs and share-based compensation. Staff
costs increased by RMB3.0 million on
a sequential quarterly basis primarily as a result of the year-end
bonuses totaling RMB3.2 million
(US$0.5 million), made to all levels
of the Company's employees. The increase in share-based
compensation by RMB3.4 million
(US$0.5 million) on a year-to-year
basis was mainly due to the recognition of RMB7.7 million (US$1.2
million) related to a fully-vested option granted on
October 31, 2011 to the Company's
chairman to purchase up to 1,013 ordinary shares of Engen
Investments Limited ("Engen") which is 75% owned by the Company and
is the holding company of the Company's recycled copper products
business.
Other Operating Expenses
Other operating expenses for the fourth quarter of 2011 amounted
to RMB40.8 million (US$6.5 million), compared to RMB 14.0 million for the fourth quarter of 2010
and RMB 9.8 million for the third
quarter of 2011. During the fourth quarter of 2011, other operating
expenses mainly consisted of depreciation of buildings and
machinery, other amortization and salary paid to factory workers of
suspended plants, totaling RMB9.7
million (US$1.5 million),
impairment loss of RMB28.2 million
(US$4.5 million) on VAT recoverable
and impairment loss of RMB2.9 million
(US$0.5 million) on land use
rights.
Other operating expenses for the fourth quarter of 2010 mainly
consisted of depreciation of buildings and machinery, other
amortization and salary to factory workers, totaling RMB8.4 million of those suspended plants, loss of
writing off a long-term payment of RMB4.8
million as a result of terminating the supply contract in
Indonesia and a provision for
compensation of RMB0.8 million to a
construction contractor of Shanghai Gushan in accordance with a
court ruling. Other operating expenses amounted to RMB9.8 million for the third quarter of 2011,
mainly consisting of depreciation of buildings and machinery and
other amortization and salary paid to factory workers at suspended
plants.
The increase in depreciation of buildings and machinery, other
amortization and salary paid to factory workers of suspended plants
on a year-to-year basis was mainly due to the suspension of Beijing
Gushan and Hebei Gushan in 2011.
The Company recognized an impairment loss of RMB28.2 million (US$4.5
million) on VAT recoverable of certain subsidiaries of
biodiesel business for the fourth quarter of 2011 as the Company
did not expect the amount would be utilized in the near future
under the current difficult operating environment. The Company also
recognized an impairment loss of RMB2.9
million (US$0.5 million) on
land use rights of Hebei Gushan and Chongqing Gushan for the fourth
quarter of 2011, such loss represented the excess of the net book
value of the land use rights over the fair value which was
determined from recent market transaction prices of comparable
lands in neighboring areas. No impairment losses on VAT recoverable
and land use rights were recorded for the fourth quarter of 2010
and the third quarter of 2011.
Other Operating Income
Other operating income for the fourth quarter of 2011 amounted
to Nil, compared to RMB5.2 million of
the third quarter of 2011. Other operating income for the third
quarter of 2011 represented compensation from the supplier of
castor beans in Sichuan as a
result of the cancellation of the supply contract of castor beans
signed with Sichuan Gushan. Other operating income in the fourth
quarter of 2010 amounted to RMB103.8
million, represented the reversal of provision for
consumption tax.
Impairment loss on property, plant and equipment
As of December 31, 2011, the
Company had continued the suspension of most of its production of
biodiesel and biodiesel by-products due mainly to the continued
shortage of raw materials. The Company considers that the
possibility is remote that operating conditions will improve enough
to enable it to resume the production of biodiesel and biodiesel
by-products on a large scale basis in the near future.
As a result of such suspension, the Company recognized an
impairment loss of RMB603.3 million
(US$95.8 million) on certain
property, plant and equipment in the fourth quarter of 2011. The
impairment loss represented the excess of the carrying amount over
the fair value of these assets. For the purpose of estimating the
fair value, the Company utilized the projected cash flows of the
property, plant and equipment discounted at its weighted average
cost of capital. This impairment loss was driven by a combination
of a series of adverse changes in the operating environment, in
particular, the continued shortage of raw materials due to local
governments cracking down on certain alleged practices of vendors
of used cooking oil which forced some of our suppliers to suspend
operations in 2011. The Company did not recognize an impairment
loss in the fourth quarter of 2010 or the third quarter of 2011 but
it did recognize an impairment loss of RM951.0 million in the third quarter of 2010.
Impairment loss of goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the net assets acquired. Goodwill is not
amortized, but is instead tested for impairment. Goodwill is
reviewed for impairment annually at reporting unit level in
accordance with the provisions of FASB ASC Topic 350,
Intangibles - Goodwill and Other. The goodwill impairment test
is a two-step test. Under the first step, the fair value of the
reporting unit is compared with its carrying value (including
goodwill). If the fair value of the reporting unit is less than its
carrying value, an indication of goodwill impairment exists for the
reporting unit and the enterprise must perform step two of the
impairment test (measurement). Under step two, an impairment loss
is recognized for any excess of the carrying amount of the
reporting unit's goodwill over the implied fair value of that
goodwill. The implied fair value of goodwill is determined by
allocating the fair value of the reporting unit in a manner similar
to a purchase price allocation and the residual fair value after
this allocation is the implied fair value of the reporting unit
goodwill. The Company determines it has two reporting segments,
which are the biodiesel business and recycled copper products
business. All the goodwill arises from the acquisition of
subsidiaries in the recycled copper products business. Fair value
of the recycled copper products business is determined by using the
fair value of the Company less the fair value of biodiesel
business. The fair value of the Company as a whole, is determined
using the quoted market price of the Company's ADSs. If the
carrying value of the recycled copper products business exceeds its
fair value, step two is performed and an impairment loss is
recognized accordingly.
The Company performs its quarterly impairment review of goodwill
at December 31, and when a triggering
event occurs between annual impairment tests. The Company
recognized an impairment loss of RMB41.4
million (US$6.6 million) on
goodwill for the fourth quarter of 2011 as described above. No
impairment loss on goodwill was recorded for the fourth quarter of
2010 and the third quarter of 2011.
Change in Fair Value of
Contingent Consideration
Liabilities
In November 2010, the Company
acquired an initial 67% beneficial ownership interest in
Jin Xin through a series of
transactions in exchange for up to 24 million of its newly issued
ordinary shares which are subject to an earn-out arrangement
whereby 6 million ordinary shares were delivered to the selling
shareholder at the closing of the transactions, while the remaining
18 million ordinary shares were placed into escrow ("Jin Xin
Contingent Consideration Shares") to be released in stages upon the
determination of Jin Xin's net
income under U.S. GAAP for the year ended December 31, 2010 and the three years ending
December 31, 2012.
In August 2011, the Company
acquired a 75% beneficial ownership interest in Xiangbei through a
series of transactions in exchange for (i) RMB30 million in cash, (ii) up to 20 million
newly issued ordinary shares of the Company, and (iii) up to a
14.17% interest in Engen Investment Limited, a direct, 75%-owned
subsidiary of the Company, subject to adjustment pursuant to an
earn-out arrangement. Items (ii) and (iii) above are collectively
also referred to as "Xiangbei Contingent Consideration Shares". The
Xiangbei Contingent Consideration Shares are subject to an earn-out
arrangement whereby up to 20 million ordinary shares of the Company
and up to 14.17% new ordinary shares of Engen may be issued in
stages upon the determination of Xiangbei's net income under U.S.
GAAP for the years ending December 31,
2011, 2012 and 2013.
Under U.S. GAAP, the Contingent Consideration Shares should be
classified as a liability and stated at fair value at the
acquisition date and each reporting date. The subsequent change in
the fair value of the Contingent Consideration Shares at each
reporting date would be recognized in our statement of operations.
The Company recognized a decrease in fair value of RMB6.0 million (US$1.0
million) for the fourth quarter of 2011, compared to an
increase in fair value of RMB2.9
million for the fourth quarter of 2010 and a decrease in
fair value of RMB0.1 million for the
third quarter of 2011.
The decreases in the fair value of the Contingent Consideration
Shares in the third and fourth quarters of 2011 were mainly due to
decreases in the market price of the Company's ADSs, the change in
discount rates in calculating the fair value of the liabilities and
decreases in the valuation of Engen as a result of downward
adjustments of the Company's expectation about the financial
prospects of its recycled copper products business. The increases
in the fair value of Jin Xin Contingent Consideration Shares in the
fourth quarter of 2010 were mainly due to an increase in the market
price of the Company's ADSs and a change in the discount rates in
calculating the fair value of the liabilities.
Other Income (Expenses)
Other income (expenses) primarily consists of interest income,
interest expenses, foreign currency exchange gain (loss), net and
other income, net. Interest income for the fourth quarter of 2011
amounted to RMB47,000 (less than
US$0.1 million). Interest expenses
for the fourth quarter of 2011 amounted to RMB2.1 million (US$0.3
million) mainly incurred by Jin
Xin in respect of short term loans and by Engen in respect
of a loan from related parties. Foreign currency exchange gain for
the fourth quarter of 2011 amounted to RMB0.5 million (US$0.1
million). Other income, net for the fourth quarter of 2011
included, among others, income from the Company's depositary bank,
a provision for business tax on intercompany advances among
companies in China, VAT refunds
and government subsidies. The increase in other income, net for the
fourth quarter of 2011 was mainly caused by VAT refunds and
government subsidy income totaling RMB19.2
million (US$3.1 million)
received by Jin Xin and
Xiangbei.
Income Tax Benefit (Expense)
Income tax benefit (expense) primarily consisted of corporate
income tax ("CIT"), a provision for dividend withholding tax and
other overseas withholding tax.
CIT for the fourth quarter of 2011 amounted to RMB14.7 million (US$2.3
million), as compared to RMB3.1
million for the fourth quarter of 2010 and RMB1.1 million for the third quarter of 2011.
According to the CIT law, which came into effect from
January 1, 2008, and relevant
regulations promulgated thereunder, PRC-resident enterprises are
levied withholding tax at a rate of 10% on dividends to their
non-PRC-resident corporate investors for earnings accumulated
beginning on January 1, 2008.
Undistributed earnings generated prior to January 1, 2008 are
exempt from such withholding tax. Under the Arrangement between the
Mainland of China and Hong Kong
Special Administration Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on
Income (the "Mainland China/HKSAR DTA") and Guoshuihan [2009] No.
601 on "How to understand and recognize the "Beneficial Owner"
in Double Taxation Agreements" ("Circular 601"), a qualified
Hong Kong tax resident which is
the "beneficial owner" and holds 25% or more of the equity interest
in a PRC resident enterprise is entitled to a reduced withholding
tax rate of 5%. Pursuant to Circular 601, a beneficial owner under
a tax treaty is not purely determined by its place of legal
registration but also by other factors which depend on specific
facts and circumstances, and significant judgment may be
involved.
Although the Company intends to apply for the reduced dividend
withholding tax rate of 5% in the future when dividends for
earnings accumulated from January 1,
2008 by its PRC operating subsidiaries are wired out of
China, the Company made a 10%
provision on such undistributed earnings for such dividend
withholding tax. If the local SATs approve a reduced dividend
withholding tax rate of 5% when such dividends are actually wired
out of China, any excess provision
will be reversed in subsequent financial statements.
In respect of its biodiesel business, the Company reduced the
provision for dividend withholding tax by RMB4.9 million (US$0.8
million) for the fourth quarter of 2011, made a provision of
RMB2.7 million for the fourth quarter
of 2010 and reduced the provision by RMB0.3
million for the third quarter of 2011. The decrease was due
to the losses incurred in the biodiesel business.
In respect of its recycled copper products business, the Company
made a provision for dividend withholding tax of RMB3.2 million (US$0.5
million), RMB1.1 million and
RMB0.7 million for the fourth quarter
of 2011, the fourth quarter of 2010 and the third quarter of 2011,
respectively.
Other overseas withholding tax amounted to RMB0.3 million (less than US$0.1 million), RMB0.3
million and RMB0.3 million for
the fourth quarter of 2011, the fourth quarter of 2010 and the
third quarter of 2011, respectively.
Net Loss Attributable to the
Company
Net loss attributable to the Company amounted to RMB683.1 million (US$108.5
million) for the fourth quarter of 2011, compared to a net
profit of RMB61.4 million for the
fourth quarter of 2010 and a net loss of RMB20.7 million for the third quarter of
2011.
Non-GAAP net loss attributable to the Company amounted to
RMB8.7 million (US$1.4 million) for the fourth quarter of 2011,
compared to RMB40.0 million for the
fourth quarter of 2010 and RMB18.5
million for the third quarter of 2011.
Financial Results for the Full Year
2011
Revenues
The Company's revenues amounted to RMB1,449.7 million (US$230.3 million) for 2011, representing an
increase of 254.9% from RMB408.5
million for 2010. The revenues included revenue contribution
of RMB1,396.4 million (US$221.9 million) from our recycled copper
products business comprising revenue from third parties
attributable to our two consolidated subsidiaries, Jin Xin and Xiangbei, of RMB1,211.9 million (US$192.6 million) and RMB184.5 million (US$29.3
million), respectively. The Company acquired controlling
interests in and began consolidating the operating results of each
of Jin Xin and Xiangbei in
November 2010 and August 2011, respectively.
The Company's revenue from its recycled copper products business
totaled RMB1,396.4 million
(US$221.9 million) for 2011,
representing an increase of 581.0% from RMB205.1 million for 2010. The increase in
revenue was mainly due to the increase of contribution from
Jin Xin's revenue by 490.9% from
RMB205.1 million for 2010 to
RMB1,211.9 million (US$192.6 million) for 2011, reflecting mainly an
increase in sales volume of recycled copper products by 435.7% from
3,787 tons for 2010 to 20,288 tons for 2011 and an increase in
sales of scrap materials and the contribution of Xiangbei's
revenues since its acquisition in August
2011, which amounted to RMB184.5
million (US$29.3 million),
reflecting a sales volume of 2,866 tons of recycled copper products
and sales of scrap materials. The average selling price of recycled
copper products increased by 6.4% from RMB53,697 per ton for 2010 to RMB57,113 (US$9,074.3) per ton for 2011.
The Company's revenue from its biodiesel business totaled
RMB53.4 million (US$8.5 million) for 2011, representing a decrease
of 73.8% from RMB203.4 million for
2010. The decline in revenues from the Company's biodiesel business
was due to a decrease in the sales volume of both biodiesel and
biodiesel by-products. The sales volume of biodiesel amounted to
8,178 tons for 2011, representing a decrease of 80.7% from 42,391
tons for 2010. The decrease in sales volume was partly offset by an
increase of the average selling price of biodiesel which increased
by 27.5% from RMB4,505 per ton in
2010 to RMB5,742 (US$912.3) per ton for 2011. The sales volume of
biodiesel by-products amounted to 1,464 tons for 2011, representing
a decrease of 76.8% from 6,314 tons for 2010. The average selling
price of biodiesel by-products was RMB2,589 (US$411.4)
per ton for 2011, representing an increase of 31.3% from
RMB1,972 per ton for 2010.
The decrease in the sales volume of both biodiesel and biodiesel
by-products were attributable to continued suspension of production
at most of the Company's biodiesel plants primarily due to the
continued shortage of raw materials due to local governments
cracking down on certain alleged practices of vendors of used
cooking oil that forced some of our suppliers to suspend operations
and a slowing PRC economy. The Company does not expect to resume
production at its biodiesel plants on a large scale basis in the
near future.
Cost of Revenues
Cost of revenues for 2011 totaled RMB1,404.9 million (US$223.3 million), representing an increase of
191.5% from RMB481.9 million for
2010. The increase was mainly due to cost of revenues of
RMB1,321.4 million (US$210.0 million) from the Company's recycled
copper products business, representing an increase of 589.3% from
RMB191.7 million for 2010. The
increase was mainly due to an increase in the sale volume by 511.4%
from 3,787 tons for 2010 to 23,154 tons for 2011.
The unit cost of raw materials increased by 8.5% from
RMB48,544 per ton for 2010 to
RMB52,671 (US$8,368.6) per ton for 2011.
The cost of revenues of the Company's biodiesel business totaled
RMB83.5 million (US$13.3 million) for 2011, representing a
decrease of 71.2% from RMB290.1
million for 2010. The decrease in cost of revenues was
primarily attributable to a decrease in the Company's sales volume
of both biodiesel and biodiesel by-products. The decrease in cost
of revenues was partially offset by an increase in the overall
average unit cost for vegetable oil offal and used cooking oil,
which increased by 24.0% from RMB3,573 per ton for 2010 to RMB4,431 (US$704.0)
per ton in 2011. The increases in the cost of vegetable oil offal
and used cooking oil were caused by the increase in the Company's
suppliers' costs, which are primarily affected by general cost
inflation, particularly in labor and transportation in China, as well as a general increase in prices
charged by their suppliers.
Gross Profit (Loss)
The Company's gross profit for 2011 totaled RMB44.8 million (US$7.1
million), compared to a gross loss of RMB73.4 million for 2010. The Company's gross
profit consisted of a gross profit of RMB75.0 million (US$11.9
million) from its recycled copper products business,
representing a gross profit margin of 5.4%, and a gross loss of
RMB30.1 million (US$4.8 million) from its biodiesel business,
representing a gross loss margin of 56.5%.
The gross profit margin of the Company's recycled copper
products business was 5.4% for 2011, compared to a gross profit
margin of 6.5% for 2010. The deterioration of the gross margin in
the Company's recycled copper products business was mainly due to a
narrowing spread between the average selling price of recycled
copper products and the average unit cost of raw materials. The
average unit cost of raw materials used in the production of
recycled copper products, including copper rods, copper wires,
copper granules and copper plates increased by 8.5%, while the
average selling prices of its copper products increased by 6.4%
during the same period, resulting in a deterioration of profit
margin which, however, was partly offset by the profit margin
derived from an increase in the proportion of sales of scrap and
raw materials and processing income, all of which commends a higher
profit margin than recycled copper products.
The gross loss margin of the Company's biodiesel business was
56.5% for 2011, compared to a gross loss margin of 42.6% for 2010.
The deterioration of the gross margin in the Company's biodiesel
business was mainly due to a provision for inventory write-downs of
RMB15.7 million (US$2.5 million) for its biodiesel business for
2011. Such provision amounted to RMB1.9
million for 2010. The average unit costs of the Company's
raw materials increased by 24.0%, while the average selling prices
of its biodiesel increased by 27.5% during the same period, but the
manufacturing costs per ton of output increased significantly as
the utilization rate further decreased in 2011.
Research and Development Expenses
Research and development expenses totaled RMB0.5 million (US$0.1
million) in 2011, representing a decrease from RMB3.9 million for 2010. The decrease was mainly
due to the suspension of R&D activities and a decrease in
depreciation expenses as a result of a lower cost base for certain
of the Company's property, plant and equipment after these assets
were impaired in 2010.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for 2011 totaled
RMB81.7 million (US$12.9 million), representing a decrease from
RMB84.5 million for 2010.
This decrease was primarily due to a decrease in share-based
compensation by RMB4.8 million
(US$0.8 million) as the Company
recognized the unamortized expenses on certain share options upon
the cancellation of such share options in 2010. Such decrease was
offset by the recognition of RMB4.9
million (US$0.8 million)
related to the options granted on January
11, 2011 to 17 individuals, including 1,000,000 ordinary
shares to eight employees of our biodiesel business and 3,000,000
ordinary shares to nine employees of Jin
Xin, and the recognition of RMB7.7
million (US$1.2 million)
related to a fully-vested option granted on October 31, 2011 to the Company's chairman to
purchase up to 1,013 ordinary shares of Engen which is 75% owned by
the Company and is the holding company of the Company's recycled
copper products business.
Other Operating Expenses
Other operating expenses for 2011 amounted to RMB68.3 million (US$10.8
million), representing a decrease from RMB70.7 million for 2010. Other operating
expenses for 2011 mainly consisted of depreciation of buildings and
machinery and other amortization and salary paid to factory workers
of suspended plants, totaling RMB37.2
million (US$5.8 million), an
impairment loss of RMB28.2 million
(US$4.5 million) on VAT recoverable
and an impairment loss of RMB2.9
million (US$0.5 million) on
land use rights. The other operating expenses for 2010 amounted to
RMB70.7 million, mainly consisted of
depreciation of buildings and machinery, other amortization and
salary to factory workers, totaling RMB64.4
million during the periods in which certain plants suspended
production, loss of writing off a long-term payment of RMB4.8 million as a result of terminating the
supply contract in Indonesia and a
provision for compensation of RMB1.5
million to a construction contractor of Shanghai Gushan in
accordance with a court ruling.
The decrease in other operating expenses was mainly due to a
decrease in depreciation expenses as a result of a lower cost base
for certain of the Company's property, plant and equipment after
these assets were impaired in 2010.
The Company recognized an impairment loss of RMB28.2 million (US$4.5
million) on VAT recoverable of certain subsidiaries of
biodiesel business in 2011 as the Company did not expect the amount
would be utilized in the near future under the current difficult
operating environment. The Company also recognized an impairment
loss of RMB2.9 million (US$0.5 million) on land use rights of Hebei
Gushan and Chongqing Gushan in 2011, such loss represented the
excess of the net book value of the land use rights over the fair
value which was determined from recent market transaction prices of
comparable lands in neighboring areas. No impairment losses on VAT
recoverable and land use rights were recorded in 2010.
Other Operating Income
Other operating income for 2011 amounted to RMB 5.2 million (US$0.8
million) which represented compensation from the supplier of
castor beans in Sichuan as a
result of its cancellation of the supply contract of castor beans
signed with Sichuan Gushan. Other operating income in 2010 amounted
to RMB103.8 million, represented the
reversal of provision for consumption tax.
Impairment Loss on Property,
Plant and Equipment
As of December 31, 2011, the
Company had suspended most of its production of biodiesel and
biodiesel by-products due to the continued shortage of raw
materials. The Company considers that the possibility is remote
that current operating conditions will improve enough to enable it
to resume the production of biodiesel and biodiesel by-products on
a large scale basis in the near future.
The Company recognized impairment losses of RMB603.3 million (US$95.8
million) on certain property, plant and equipment in 2011.
The impairment loss represented the excess of the carrying amount
over the fair value of these assets. For the purpose of estimating
the fair value, the Company utilized the projected cash flows of
the property, plant and equipment discounted at its weighted
average cost of capital. In the fourth quarter of 2011, the
recognition of the impairment loss of RMB603.3 million (US$95.8
million) for the Company's biodiesel plants was driven by a
combination of a series of adverse changes in the operating
environment, in particular, the continued shortage of raw materials
due to local governments cracking down on certain alleged practices
of vendors of used cooking oil which forced some of our suppliers
to suspend operations in 2011.
The Company recognized an impairment loss of RMB992.6 million on certain property, plant and
equipment in the third quarter of 2010. The recognition of an
impairment loss of RMB951.0 million
for the facilities of Fujian Gushan, Hebei Gushan, Beijing Gushan,
Shanghai Gushan, Chongqing Gushan, Hunan Gushan and Biomass was
driven by a combination of a series of adverse changes in the
operating environment, in particular, the then unresolved
consumption tax issue and the increase in costs of raw materials
over the previous few quarters. As previously announced, Sichuan
Gushan relocated the production lines of its old plant in San Tai
County to its new plant in Qin Dong Bei Industrial Park. As such,
in relation to the relocation, Sichuan Gushan recognized an
impairment loss of RMB41.7 million on
its property, plant and equipment in the second quarter of
2010.
Impairment loss of goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the net assets acquired. Goodwill is not
amortized, but is instead tested for impairment. Goodwill is
reviewed for impairment annually at reporting unit level in
accordance with the provisions of FASB ASC Topic 350,
Intangibles - Goodwill and Other. The goodwill impairment test
is a two-step test. Under the first step, the fair value of the
reporting unit is compared with its carrying value (including
goodwill). If the fair value of the reporting unit is less than its
carrying value, an indication of goodwill impairment exists for the
reporting unit and the enterprise must perform step two of the
impairment test (measurement). Under step two, an impairment loss
is recognized for any excess of the carrying amount of the
reporting unit's goodwill over the implied fair value of that
goodwill. The implied fair value of goodwill is determined by
allocating the fair value of the reporting unit in a manner similar
to a purchase price allocation and the residual fair value after
this allocation is the implied fair value of the reporting unit
goodwill. The Company determines it has two reporting segments,
which are the biodiesel business and recycled copper products
business. All the goodwill arises from the acquisition of
subsidiaries in the recycled copper products business. Fair value
of the recycled copper products business is determined by using the
fair value of the Company less the fair value of biodiesel
business. The fair value of the Company as a whole, is determined
using the quoted market price of the Company's ADSs. If the
carrying value the recycled copper products business exceeds its
carrying value, step two is performed and an impairment loss is
recorded accordingly.
The Company performs its quarterly impairment review of goodwill
at December 31, and when a triggering
event occurs between annual impairment tests. The Company
recognized an impairment loss of RMB41.4
million (US$6.6 million) on
goodwill for 2011 as described above. No impairment loss on
goodwill was recorded in 2010.
Loss on Disposal of Property,
Plant and Equipment
The Company's loss on disposal of property, plant and equipment
for 2011 was RMB20,000 (less than
US$0.1 million), as compared to
RMB3.3 million in 2010. The disposal
and relocation of Sichuan Gushan's property, plant and equipment
was completed as of December 31,
2010. The loss on disposal of property, plant and equipment
mainly in 2010 represented certain additional machinery and
equipment that was scrapped during the fourth quarter of 2010 and
relocation expenses, net of proceeds from selling scraps and a
compensation of RMB37.0 million
received from the San Tai ECB. The remaining RMB1.8 million compensation receivable from San
Tai ECB will be recognized in future income statements on a cash
basis.
Change in Fair Value of
Contingent Consideration
Liabilities
In November 2010, the Company
acquired an initial 67% beneficial ownership interest in
Jin Xin through a series of
transactions in exchange for up to 24 million of its newly issued
ordinary shares which are subject to an earn-out arrangement
whereby 6 million ordinary shares were delivered to the selling
shareholder at the closing of the transactions, while the remaining
18 million ordinary shares were placed into escrow ("Jin Xin
Contingent Consideration Shares") to be released in stages upon the
determination of Jin Xin's net
income under U.S. GAAP for the year ended December 31, 2010 and the three years ending
December 31, 2012.
In August 2011, the Company
acquired a 75% beneficial ownership interest in Xiangbei through a
series of transactions in exchange for (i) RMB30 million in cash, (ii) up to 20 million
newly issued ordinary shares of the Company, and (iii) up to a
14.17% interest in Engen Investment Limited, a direct, 75%-owned
subsidiary of the Company, subject to adjustment pursuant to an
earn-out arrangement. Items (ii) and (iii) above are collectively
also referred to as "Xiangbei Contingent Consideration Shares". The
Xiangbei Contingent Consideration Shares are subject to an earn-out
arrangement whereby up to 20 million ordinary shares of the Company
and up to 14.17% new ordinary shares of Engen may be issued in
stages upon the determination of Xiangbei's net income under U.S.
GAAP for the years ending/ended December 31,
2011, 2012 and 2013.
Under U.S. GAAP, the Contingent Consideration Shares should be
classified as a liability and stated at fair value at the
acquisition date and each reporting date. The subsequent change in
the fair value of the Contingent Consideration Shares at each
reporting date would be recognized in our statement of
operations.
The Company recognized a decrease in fair value of RMB10.4 million (US$1.6
million) for 2011 and an increase in fair value of
RMB2.9 million in 2010. The decreases
in the fair value of the Contingent Consideration Shares in 2011
were mainly due to decreases in the market price of the Company's
ADSs, the change in discount rates in calculating the fair value of
the liabilities and decreases in the valuation of Engen as a result
of downward adjustments of the Company's expectation about the
financial prospects of its recycled copper products business. The
increases in the fair value of Jin Xin Contingent Consideration
Shares in 2010 were mainly due to an increase in the market price
of the Company's ADSs and a change in the discount rates in
calculating the fair value of the liabilities.
Other Income (Expense)
Other income (expense) primarily consists of interest income,
interest expenses, foreign currency exchange gain (loss) and other
income, net. Interest income for 2011 amounted to RMB0.4 million (less than US$0.1 million) as compared to RMB1.4 million in 2010. Interest expenses
amounted to RMB7.5 million
(US$1.2 million) mainly incurred by
Jin Xin in respect of short term
loans and by Engen in respect of a loan from related parties, as
compared to RMB0.7 million in 2010.
Foreign currency exchange gains amounted to RMB0.2 million (less than US$0.1 million) as compared to an exchange loss
of RMB0.2 million in 2010.
Other income, net for 2011 amounted to RMB23.2 million (US$3.7
million) and included, among others, income from the
Company's depositary bank, a provision for business tax on
intercompany advances among companies in China, VAT refunds and government subsidies.
The increase in other income, net in 2011 was mainly caused by VAT
refunds and government subsidy income totaling RMB24.2 million (US$3.8
million) received by Jin Xin
and Xiangbei.
Income Tax Benefit (Expense)
Income tax expense primarily consisted of CIT, a provision for
dividend withholding tax and other withholding tax during the
current and comparative periods.
CIT for 2011 amounted to RMB18.1million (US$2.9
million), compared to RMB3.5
million for 2010. The increase in CIT was mainly due to an
increase in the taxable profit derived from the Company's recycled
copper products business.
In respect of its biodiesel business, the Company reduced the
provision for dividend withholding tax by RMB6.1 million (US$1.0
million) for 2011, as compared to reduce by RMB23.6 million in 2010. The decrease was due to
the losses incurred in the biodiesel business.
In respect of its recycled copper products business, the Company
made a provision for dividend withholding tax of RMB5.0 million (US$0.8
million) for 2011, as compared to RMB1.1 million in 2010. The increase was due to
the increase in profits made by Jin
Xin and the profit made by Xiangbei since the acquisition in
August 2011.
Other overseas withholding tax amounted to RMB1.1 million (US$0.2
million) for 2011, as compared to RMB1.2 million for 2010.
Net Loss Attributable to the Company
Net loss attributable to the Company amounted to RMB747.7 million (US$118.8
million) for 2011, compared to a net loss of RMB1,109.0 million for 2010. Non-GAAP net loss
attributable to the Company amounted to RMB70.0 million (US$11.1
million) for 2011, compared to a non-GAAP net loss of
RMB212.0 million for 2010.
Financial Condition
As of December 31, 2011, the
Company had working capital of RMB108.0
million (US$17.1 million),
reflecting total current assets of RMB519.9
million (US$82.6 million) and
total current liabilities of RMB411.9
million (US$65.5 million). Of
the total current assets, the Company had RMB65.5 million (US$10.4
million) in cash, represented by RMB34.7 million and US$4,000 deposited in licensed commercial banks
in China and HK$0.8 million and US$4.8
million deposited in licensed commercial banks in
Hong Kong.
Recent Events
Receipt of non-binding proposal to acquire all of the
outstanding ordinary shares of the Company
On February 24, 2012, the Company
received a preliminary non-binding proposal letter from
Mr. Jianqiu Yu, Chairman and Principal Executive Officer of
Gushan, to acquire all of the outstanding ordinary shares of the
Company not currently owned, legally or beneficially, by
Mr. Jianqiu Yu (the "Buyer"), for US$1.599 per ADS or US$0.1599 per ordinary share in cash. As of
February 24, 2012, the Buyer
controlled approximately 34.8% of the outstanding shares of the
Company. The Company's Board of Directors formed a special
committee of independent directors (the "Special Committee")
consisting of Messrs. Denny Ting Bun
Lee, Kang Nam Chu and
Dongming Zhang to consider the
proposed transaction. On March 9,
2012, the Special Committee retained PiperJaffray as its
financial advisor, Akin Gump Strauss Hauer & Feld LLP as its
United States legal counsel, and
Walkers Global as its Cayman
Islands legal counsel to assist it in its work. As of the
date of this press release, the Special Committee is continuing its
evaluation of the proposed transaction.
Acquisition of Guangzhou Taiyue Communications Cable
Co. Ltd.
As previously disclosed, on November 3,
2011, the Company entered into definitive agreements to
acquire a controlling interest in Guangzhou Taiyue Communications
Cable Co. Ltd. ("Taiyue"), a PRC-based company that is currently
engaged in the manufacture and sale of copper cable for
applications that include communication and personal computing. The
consummation of the acquisition is subject to the satisfaction of,
among others, customary closing conditions, including obtaining
approvals from relevant PRC governmental authorities. No
assurance can be given that this transaction will be
consummated.
Business Outlook for Fiscal Year 2012
During the fourth quarter of 2011, the Company's average
biodiesel selling prices remained relatively stable over the
previous quarter. However, as China and the world economy begin to slow down
this year, demand for diesel in China is expected to soften and as a result
biodiesel selling prices are expected to follow this trend. The
easing of the inflationary pressures in China which started in the third quarter of
2011 has continued to the fourth quarter of 2011 which resulted in
a drop in the Company's raw material input costs. As China's economy continues to slow down,
inflationary pressures in China
are expected to continue to ease and the Company's raw material
input costs for its biodiesel business should continue to fall. The
local governments' clamp down on collectors of used cooking oil to
prevent them from allegedly selling used cooking oil to processors
who illegally process and resell the used cooking oil as virgin
edible oil for public consumption has continued to date and has
resulted in the continued suspension of operations of many
collectors of used cooking oil, which include many of our
suppliers. Consequently, the Company's input raw materials for its
biodiesel have continued to be in short supply. Although we
continue to believe that when this shortage of raw materials ends,
the Company will be a beneficiary as the Company's biodiesel
business represents a legitimate channel for the proper processing
of used cooking oil, it is still uncertain when this will occur.
The Company will continue to closely monitor the availability of
raw materials situation and will evaluate the appropriateness of
increasing biodiesel production levels only if its plants are able
to operate on a positive cash flow basis.
Meanwhile, the Company's recycled copper products business
continued to contribute positively to the Company's overall
financial performance and this trend is expected to continue
although the slowing down of China's economy is expected to have a negative
impact on this business. The Company will continue to explore the
possibility of acquiring more businesses in the recycled copper
products industry that will complement its existing businesses and
strengthen its overall recycled copper products business
portfolio.
Unaudited Financial Statements
The unaudited condensed consolidated statements of operations,
balance sheets and cash flow statements accompanying this
announcement have been prepared by management using U.S. GAAP.
These unaudited financial statements are not intended to fully
comply with U.S. GAAP because they do not present all of the
disclosures required by U.S. GAAP. The December 31, 2010
balance sheet was derived from audited consolidated financial
statements of the Company.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars in this earnings
release, made solely for the reader's convenience, is based on the
H.10 statistical release of the Federal Reserve Board as of
December 31, 2011, which was
RMB6.2939 to US$1.00. No representation is intended to imply
that the Renminbi amounts could have been, or could be, converted,
realized or settled into U.S. dollars at such rate, or at any other
rate. The percentages stated in this earnings release are
calculated based on Renminbi.
Conference Call
Gushan's management will hold its fourth quarter of 2011
earnings conference call at 8:30am
U.S. Eastern Time (8:30pm
Beijing / Hong Kong Time) on
April 27, 2012.
Dial-in details for the earnings conference call are as
follows:
US Toll
Free Number
|
|
1 718 354
1231
|
US Toll
Number: (for international callers)
|
|
186 651
94004
|
Hong Kong
Toll Number
|
|
852 2475
0994
|
Hong Kong
Toll Free Number
|
|
800 930
346
|
China Toll
Free Number
|
|
400 620
8038
|
UK Toll
Free Number
|
|
800 819
0121
|
UK Toll
Number (for international callers)
|
|
080 823
46646
|
Conference
ID:
|
|
75343235
|
A replay of the call will be available on the same day at
11:30 a.m. U.S. Eastern Time (or
12:30 p.m. Hong Kong Time) until
May 4, 2012 and may be accessed by
phone at the following numbers.
US Toll
Free Number:
|
|
1 718 354
1232
|
US Toll
Number: (for international callers)
|
|
186 6214
5335
|
Conference
ID:
|
|
75343235
|
In addition, a live and archived webcast of this conference call
will be available on the Investor Relations section of Gushan's
website at www.chinagushan.com.
About Gushan Environmental Energy Limited
Gushan produces biodiesel, a renewable, clean-burning and
biodegradable fuel and a raw material used to produce chemical
products, primarily from used cooking oil, and by-products from
biodiesel production, including glycerine and plant asphalt. Gushan
sells biodiesel directly to users, such as marine vessel operators
and chemical factories, as well as to petroleum wholesalers and
individual retail gas stations. The Company has seven production
facilities, located in the Sichuan, Hebei, Fujian
and Hunan provinces and in
Beijing, Shanghai and Chongqing, with a combined annual production
capacity of 490,000 tons. Gushan's Sichuan production facility is currently in
operation. Gushan also operates a copper products business in
China which manufactures copper
rods, copper wires, copper granules and copper plates primarily
from recycled copper. Currently, the copper products business has
two plants, with a daily production capacity of approximately 210
tons of recycled copper products.
Safe Harbor Statement
This announcement contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by words such as "will," "may," "expect,"
"anticipate," "aim," "target," "intend," "plan," "believe,"
"estimate," "potential," "continue," and other similar statements.
Statements other than statements of historical facts in this
announcement are forward-looking statements, including but not
limited to, the Company's expectations regarding the expansion of
its production capacities, its future business development, and its
beliefs regarding its production output. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about the Company and the industry. Important risks and
uncertainties that could cause the Company's actual results to be
materially different from expectations include but are not limited
to the effect of any applicable government policy, law or
regulation, of natural disasters, and of intensifying competition
in the biodiesel and alternative energy industries, the
availability of suitable raw materials to the Company, and the
risks set forth in the Company's filings with the U.S. Securities
and Exchange Commission ("SEC"), including on
Form 20-F. The Company undertakes no obligation to
update forward-looking statements, except as may be required by
law. Although the Company believes that the expectations expressed
in these forward-looking statements are reasonable, it cannot
assure you that its expectations will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
About Non-GAAP Financial Measures
To supplement Gushan's consolidated financial results presented
in accordance with U.S. GAAP, Gushan uses the following measures
defined as non-GAAP financial measures by the SEC: net loss
excluding share-based compensation, impairment loss and loss on
disposal of property, plant and equipment, impairment loss of
goodwill, Impairment loss of land use rights, Impairment loss of
VAT recoverable, change in fair value of contingent consideration
liabilities (the portion to be borne by the Company), reversal of
provision for consumption tax and the tax effect thereof ("non-GAAP
net loss"), basic and diluted net loss per ADS excluding
share-based compensation, impairment loss of property, plant and
equipment, impairment loss of goodwill, impairment loss of land use
rights, impairment loss of VAT recoverable, change in fair value of
contingent consideration liabilities (the portion to be borne by
the Company), reversal of provision for consumption tax and the tax
effect thereof ("basic and diluted non-GAAP net loss per ADS"). The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP. For
more information on these non-GAAP financial measures, please see
the table captioned "Reconciliation of GAAP measures to non-GAAP
measures" set forth at the end of this release.
Gushan believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding share-based compensation, impairment loss
and loss on disposal of property, plant and equipment, impairment
loss of goodwill, impairment loss of land use rights, impairment
loss of VAT recoverable, change in fair value of contingent
consideration liabilities (the portion to be borne by the Company),
reversal of provision for consumption tax and the tax effect
thereof that may not be indicative of its operating performance
from a cash perspective. Gushan believes that both management and
investors benefit from these non-GAAP financial measures in
assessing its performance and when planning and forecasting future
periods. Gushan computes its non-GAAP financial measures using the
same consistent method from quarter to quarter. Gushan believes
these non-GAAP financial measures are useful to investors in
allowing for greater transparency with respect to supplemental
information used by management in its financial and operational
decision making. A limitation of using non-GAAP net loss and basic
and diluted non-GAAP net loss per ADS is that these non-GAAP
measures exclude share-based compensation, impairment loss and loss
on disposal of property, plant and equipment, impairment loss of
goodwill, impairment loss of land use rights, impairment loss of
VAT recoverable, change in fair value of contingent consideration
liabilities (the portion to be borne by the Company), reversal of
provision for consumption tax and the tax effect thereof, that have
been and may continue to be for the foreseeable future a
significant recurring expense in its business. Management
compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliations
between GAAP financial measures to non-GAAP financial measures.
For
further information, please contact:
|
|
|
US
|
Asia
|
Elizabeth
Cheek
|
Rico Ngai
|
Hill+Knowlton Strategies
(New York)
|
Hill+Knowlton Strategies (Hong Kong)
|
Tel: (1) 212 885
0682
|
Tel: (852) 2894 6204
|
Email:
elizabeth.cheek@hkstrategies.com
|
Email: rico.ngai@hkstrategies.com
|
- FINANCIAL TABLES FOLLOW -
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts expressed in thousands, except per share
data, per ADS data and number of shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
December 31, 2010
|
|
|
September 30, 2011
|
|
|
December 31, 2011
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
Revenues
|
|
234,510
|
|
|
475,264
|
|
|
399,624
|
|
|
63,494
|
|
Cost of revenues
|
|
(216,255)
|
|
|
(471,441)
|
|
|
(368,798)
|
|
|
(58,596)
|
|
Gross profits
|
|
18,255
|
|
|
3,823
|
|
|
30,826
|
|
|
4,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
(870)
|
|
|
(103)
|
|
|
(119)
|
|
|
(19)
|
|
Selling, general and administrative
|
|
(32,609)
|
|
|
(17,699)
|
|
|
(29,939)
|
|
|
(4,757)
|
|
Other operating expenses
|
|
(13,971)
|
|
|
(9,762)
|
|
|
(40,773)
|
|
|
(6,479)
|
|
Impairment loss of property, plant and
equipment
|
|
—
|
|
|
—
|
|
|
(603,266)
|
|
|
(95,849)
|
|
Impairment loss of goodwill
|
|
—
|
|
|
—
|
|
|
(41,440)
|
|
|
(6,584)
|
|
Loss on disposal of property, plant and
equipment
|
|
(3,303)
|
|
|
(7)
|
|
|
(13)
|
|
|
(2)
|
|
Change in fair value of contingent consideration
liabilities
|
|
(2,868)
|
|
|
125
|
|
|
6,031
|
|
|
958
|
|
Total operating expenses
|
|
(53,621)
|
|
|
(27,446)
|
|
|
(709,519)
|
|
|
(112,732)
|
|
Other operating income
|
|
103,780
|
|
|
5,214
|
|
|
—
|
|
|
—
|
|
Profit (loss) from
operations
|
|
68,414
|
|
|
(18,409)
|
|
|
(678,693)
|
|
|
(107,834)
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
320
|
|
|
12
|
|
|
47
|
|
|
7
|
|
Interest expense
|
|
(720)
|
|
|
(2,512)
|
|
|
(2,141)
|
|
|
(340)
|
|
Foreign currency exchange gain (loss), net
|
|
(21)
|
|
|
(3)
|
|
|
510
|
|
|
81
|
|
Other income, net
|
|
3,304
|
|
|
2,177
|
|
|
19,245
|
|
|
3,058
|
|
Profit (loss) before income
tax
|
|
71,297
|
|
|
(18,735)
|
|
|
(661,032)
|
|
|
(105,028)
|
|
Income tax expense
|
|
(7,170)
|
|
|
(1,753)
|
|
|
(13,279)
|
|
|
(2,110)
|
|
Net profit (loss)
|
|
64,127
|
|
|
(20,488)
|
|
|
(674,311)
|
|
|
(107,138)
|
|
Less: Net income attributable to non-controlling
interest
|
|
(2,750)
|
|
|
(166)
|
|
|
(8,829)
|
|
|
(1,403)
|
|
Net profit (loss) attributable to the
Company
|
|
61,377
|
|
|
(20,654)
|
|
|
(683,140)
|
|
|
(108,541)
|
|
Net profit (loss) per ordinary share attributable to
the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
0.38
|
|
|
(0.12)
|
|
|
(4.05)
|
|
|
(0.64)
|
|
- Diluted
|
|
0.38
|
|
|
(0.12)
|
|
|
(4.05)
|
|
|
(0.64)
|
|
Net profit (loss) per ADS attributable to the
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
3.75
|
|
|
(1.22)
|
|
|
(40.50)
|
|
|
(6.43)
|
|
- Diluted
|
|
3.75
|
|
|
(1.22)
|
|
|
(40.50)
|
|
|
(6.43)
|
|
Weighted average ordinary shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
163,670,623
|
|
|
168,686,743
|
|
|
168,686,743
|
|
|
168,686,743
|
|
- Diluted
|
|
163,670,623
|
|
|
168,686,743
|
|
|
168,686,743
|
|
|
168,686,743
|
|
Weighted average ADS outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
16,367,062
|
|
|
16,868,674
|
|
|
16,868,674
|
|
|
16,868,674
|
|
- Diluted
|
|
16,367,062
|
|
|
16,868,674
|
|
|
16,868,674
|
|
|
16,868,674
|
|
Share-based compensation expense included
in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
135
|
|
|
62
|
|
|
60
|
|
|
10
|
|
Research and development expenses
|
|
36
|
|
|
(20)
|
|
|
4
|
|
|
1
|
|
Selling, general and administrative
expenses
|
|
6,189
|
|
|
2,229
|
|
|
9,556
|
|
|
1,517
|
|
Reversal of provision for consumption tax of
biodiesel included in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
10,588
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other operating income
|
|
103,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts expressed in thousands, except per share data,
per ADS data and number of shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
December 31, 2010
|
|
|
December 31, 2011
|
|
|
RMB
|
RMB
|
|
|
US$
|
Revenues
|
|
|
|
|
408,498
|
|
|
1,449,734
|
|
|
230,340
|
|
Cost of revenues
|
|
|
|
|
(481,857)
|
|
|
(1,404,926)
|
|
|
(223,220)
|
|
Gross profit
(loss)
|
|
|
|
|
(73,359)
|
|
|
44,808
|
|
|
7,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
(3,899)
|
|
|
(518)
|
|
|
(82)
|
|
Selling, general and administrative
|
|
|
|
|
(84,493)
|
|
|
(81,745)
|
|
|
(12,988)
|
|
Other operating expenses
|
|
|
|
|
(70,661)
|
|
|
(68,251)
|
|
|
(10,845)
|
|
Impairment loss of property, plant and
equipment
|
|
|
|
|
(992,620)
|
|
|
(603,266)
|
|
|
(95,849)
|
|
Impairment loss of goodwill
|
|
|
|
|
—
|
|
|
(41,440)
|
|
|
(6,584)
|
|
Loss on disposal of property, plant and
equipment
|
|
|
|
|
(3,306)
|
|
|
(20)
|
|
|
(3)
|
|
Change in fair value of contingent consideration
liabilities
|
|
|
|
|
(2,868)
|
|
|
10,361
|
|
|
1,646
|
|
Total operating expenses
|
|
|
|
|
(1,157,847)
|
|
|
(784,879)
|
|
|
(124,705)
|
|
Other operating income
|
|
|
|
|
103,780
|
|
|
5,214
|
|
|
828
|
|
Loss from operations
|
|
|
|
|
(1,127,426)
|
|
|
(734,857)
|
|
|
(116,757)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
1,432
|
|
|
417
|
|
|
66
|
|
Interest expense
|
|
|
|
|
(720)
|
|
|
(7,516)
|
|
|
(1,194)
|
|
Foreign currency exchange gain (loss), net
|
|
|
|
|
(159)
|
|
|
175
|
|
|
28
|
|
Other income , net
|
|
|
|
|
2,862
|
|
|
23,241
|
|
|
3,693
|
|
Loss before income tax
|
|
|
|
|
(1,124,011)
|
|
|
(718,540)
|
|
|
(114,164)
|
|
Income tax benefit (expense)
|
|
|
|
|
17,746
|
|
|
(18,083)
|
|
|
(2,873)
|
|
Net loss
|
|
|
|
|
(1,106,265)
|
|
|
(736,623)
|
|
|
(117,037)
|
|
Less: Net income attributable to non-controlling
interest
|
|
|
|
|
(2,750)
|
|
|
(11,058)
|
|
|
(1,757)
|
|
Net loss attributable to the
Company
|
|
|
|
|
(1,109,015)
|
|
|
(747,681)
|
|
|
(118,794)
|
|
Net loss per ordinary share attributable to the
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
|
|
(6.68)
|
|
|
(4.48)
|
|
|
(0.71)
|
|
- Diluted
|
|
|
|
|
(6.68)
|
|
|
(4.48)
|
|
|
(0.71)
|
|
Net loss per ADS attributable to the
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
|
|
(66.79)
|
|
|
(44.75)
|
|
|
(7.11)
|
|
- Diluted
|
|
|
|
|
(66.79)
|
|
|
(44.75)
|
|
|
(7.11)
|
|
Weighted average ordinary shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
|
|
166,035,117
|
|
|
167,092,222
|
|
|
167,092,222
|
|
- Diluted
|
|
|
|
|
166,035,117
|
|
|
167,092,222
|
|
|
167,092,222
|
|
Weighted average ADS outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
|
|
16,603,512
|
|
|
16,709,222
|
|
|
16,709,222
|
|
- Diluted
|
|
|
|
|
16,603,512
|
|
|
16,709,222
|
|
|
16,709,222
|
|
Share-based compensation expense included
in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
549
|
|
|
261
|
|
|
41
|
|
Research and development expenses
|
|
|
|
|
120
|
|
|
10
|
|
|
2
|
|
Selling, general and administrative
expenses
|
|
|
|
|
21,762
|
|
|
16,997
|
|
|
2,701
|
|
Reversal of provision for consumption tax of
biodiesel included in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income
|
|
|
|
|
103,780
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
UNAUDITED SEGMENT INFORMATION
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
December 31, 2010
|
|
|
September 30, 2011
|
|
|
December 31, 2011
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
29,451
|
|
|
1,754
|
|
|
3,790
|
|
|
602
|
|
Recycled copper products business
|
|
205,059
|
|
|
473,510
|
|
|
395,834
|
|
|
62,892
|
|
|
|
234,510
|
|
|
475,264
|
|
|
399,624
|
|
|
63,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
(24,558)
|
|
|
(6,994)
|
|
|
(18,507)
|
|
|
(2,940)
|
|
Recycled copper products business
|
|
(191,697)
|
|
|
(464,447)
|
|
|
(350,291)
|
|
|
(55,656)
|
|
|
|
(216,255)
|
|
|
(471,441)
|
|
|
(368,798)
|
|
|
(58,596)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
4,893
|
|
|
(5,240)
|
|
|
(14,717)
|
|
|
(2,338)
|
|
Recycled copper products business
|
|
13,362
|
|
|
9,063
|
|
|
45,543
|
|
|
7,236
|
|
|
|
18,255
|
|
|
3,823
|
|
|
30,826
|
|
|
4,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
16.6%
|
|
|
(298.7%)
|
|
|
(388.3%)
|
|
|
(388.3%)
|
|
Recycled copper products business
|
|
6.5%
|
|
|
1.9%
|
|
|
11.5%
|
|
|
11.5%
|
|
|
|
7.8%
|
|
|
0.8%
|
|
|
7.7%
|
|
|
7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY LIMITED
UNAUDITED SEGMENT INFORMATION
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31, 2010
|
|
|
December 31, 2011
|
|
RMB
|
RMB
|
|
|
US$
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
203,439
|
|
|
53,359
|
|
|
8,478
|
|
Recycled copper products business
|
|
205,059
|
|
|
1,396,375
|
|
|
221,862
|
|
|
|
408,498
|
|
|
1,449,734
|
|
|
230,340
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
(290,160)
|
|
|
(83,502)
|
|
|
(13,267)
|
|
Recycled copper products business
|
|
(191,697)
|
|
|
(1,321,424)
|
|
|
(209,953)
|
|
|
|
(481,857)
|
|
|
(1,404,926)
|
|
|
(223,220)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
(86,721)
|
|
|
(30,143)
|
|
|
(4,789)
|
|
Recycled copper products business
|
|
13,362
|
|
|
74,951
|
|
|
11,909
|
|
|
|
(73,359)
|
|
|
44,808
|
|
|
7,120
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) margin:
|
|
|
|
|
|
|
|
|
|
Biodiesel business
|
|
(42.6%)
|
|
|
(56.5%)
|
|
|
(56.5%)
|
|
Recycled copper products business
|
|
6.5%
|
|
|
5.4%
|
|
|
5.4%
|
|
|
|
(18.0%)
|
|
|
3.1%
|
|
|
3.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands)
|
|
|
December 31, 2010
|
|
|
December 31, 2011
|
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
272,822
|
|
|
65,519
|
|
|
10,410
|
|
Accounts receivable
|
|
|
48,639
|
|
|
215,772
|
|
|
34,283
|
|
Bills receivable
|
|
|
9,550
|
|
|
10,932
|
|
|
1,737
|
|
Inventories
|
|
|
176,023
|
|
|
155,008
|
|
|
24,628
|
|
Prepaid expenses and other current assets
|
|
|
53,706
|
|
|
65,545
|
|
|
10,414
|
|
Amounts due from related parties
|
|
|
—
|
|
|
4,466
|
|
|
710
|
|
Income tax receivable
|
|
|
674
|
|
|
674
|
|
|
107
|
|
Deferred tax assets
|
|
|
2,439
|
|
|
2,019
|
|
|
321
|
|
Total current assets
|
|
|
563,853
|
|
|
519,935
|
|
|
82,610
|
|
Property, plant and equipment, net
|
|
|
663,946
|
|
|
96,929
|
|
|
15,400
|
|
Land use rights
|
|
|
87,568
|
|
|
86,527
|
|
|
13,748
|
|
Deferred tax assets
|
|
|
4,609
|
|
|
3,294
|
|
|
523
|
|
Goodwill
|
|
|
18,674
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
1,338,650
|
|
|
706,685
|
|
|
112,281
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short term bank loans
|
|
|
60,000
|
|
|
110,000
|
|
|
17,477
|
|
Accounts payable
|
|
|
79,163
|
|
|
98,347
|
|
|
15,626
|
|
Accounts payable for property, plant and
equipment
|
|
|
47,153
|
|
|
65,228
|
|
|
10,364
|
|
Accrued expenses and other payables
|
|
|
61,074
|
|
|
60,501
|
|
|
9,613
|
|
Amounts due to related parties
|
|
|
30,709
|
|
|
66,243
|
|
|
10,525
|
|
Income tax payable
|
|
|
10,075
|
|
|
11,614
|
|
|
1,845
|
|
Total current liabilities
|
|
|
288,174
|
|
|
411,933
|
|
|
65,450
|
|
Deferred tax liabilities
|
|
|
9,766
|
|
|
11,285
|
|
|
1,793
|
|
Income tax payable
|
|
|
9,762
|
|
|
10,547
|
|
|
1,676
|
|
Contingent consideration liabilities, excluding
current portion
|
|
|
13,585
|
|
|
10,261
|
|
|
1,630
|
|
Deferred rebate income, excluding current
portion
|
|
|
15,450
|
|
|
11,040
|
|
|
1,754
|
|
Total liabilities
|
|
|
336,737
|
|
|
455,066
|
|
|
72,303
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
|
|
|
2
|
|
|
2
|
|
|
—
|
|
Additional paid-in capital
|
|
|
1,547,035
|
|
|
1,541,838
|
|
|
244,973
|
|
Treasury stock
|
|
|
(32,972)
|
|
|
(32,972)
|
|
|
(5,239)
|
|
Accumulated other comprehensive loss
|
|
|
(59,159)
|
|
|
(63,569)
|
|
|
(10,099)
|
|
Accumulated deficit
|
|
|
(469,758)
|
|
|
(1,217,439)
|
|
|
(193,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to the
Company
|
|
|
985,148
|
|
|
227,860
|
|
|
36,203
|
|
Non-controlling interest
|
|
|
16,765
|
|
|
23,759
|
|
|
3,775
|
|
Total shareholders' equity
|
|
|
1,001,913
|
|
|
251,619
|
|
|
39,978
|
|
Total liabilities and shareholders'
equity
|
|
|
1,338,650
|
|
|
706,685
|
|
|
112,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
December 31, 2010
|
|
|
September 30, 2011
|
|
|
December 31, 2011
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit (loss)
|
|
64,127
|
|
|
(20,488)
|
|
|
(674,311)
|
|
|
(107,138)
|
|
Adjustments to reconcile net loss to
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based compensation
|
|
6,360
|
|
|
2,271
|
|
|
9,620
|
|
|
1,528
|
|
Depreciation
|
|
9,196
|
|
|
18,552
|
|
|
18,761
|
|
|
2,981
|
|
Land use right expense
|
|
378
|
|
|
403
|
|
|
415
|
|
|
66
|
|
Loss on disposal of property, plant and
equipment
|
|
3,303
|
|
|
7
|
|
|
13
|
|
|
2
|
|
Impairment loss of property, plant and
equipment
|
|
—
|
|
|
—
|
|
|
603,266
|
|
|
95,849
|
|
Impairment loss of goodwill
|
|
—
|
|
|
—
|
|
|
41,440
|
|
|
6,584
|
|
Impairment loss of land use rights
|
|
—
|
|
|
—
|
|
|
2,925
|
|
|
465
|
|
Impairment loss of VAT recoverable
|
|
—
|
|
|
—
|
|
|
28,220
|
|
|
4,484
|
|
Change in fair value of contingent consideration
liabilities
|
|
2,868
|
|
|
(125)
|
|
|
(6,031)
|
|
|
(958)
|
|
Foreign currency exchange (gain) loss, net
|
|
21
|
|
|
3
|
|
|
(510)
|
|
|
(81)
|
|
Deferred tax expense (benefit)
|
|
3,314
|
|
|
621
|
|
|
(839)
|
|
|
(133)
|
|
Inventory write-downs (reversal of
write-downs)
|
|
(3,558)
|
|
|
14,729
|
|
|
1,096
|
|
|
174
|
|
Provision for doubtful debts
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss from copper futures contracts
|
|
—
|
|
|
1,110
|
|
|
—
|
|
|
—
|
|
Change in assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
14,767
|
|
|
(8,715)
|
|
|
(62,789)
|
|
|
(9,976)
|
|
Bills receivable
|
|
(9,550)
|
|
|
(62)
|
|
|
(10,870)
|
|
|
(1,727)
|
|
Inventories
|
|
(107,215)
|
|
|
(17,060)
|
|
|
(30,868)
|
|
|
(4,904)
|
|
Prepaid expenses and other current assets
|
|
(16,511)
|
|
|
3,915
|
|
|
(36,249)
|
|
|
(5,759)
|
|
Income tax receivable
|
|
1,047
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
71,882
|
|
|
(20,590)
|
|
|
73,067
|
|
|
11,609
|
|
Accrued expenses and other payables
|
|
8,363
|
|
|
3,922
|
|
|
8,333
|
|
|
1,324
|
|
Income taxes payable
|
|
4,531
|
|
|
343
|
|
|
10,398
|
|
|
1,652
|
|
Reversal of provision for consumption tax
|
|
(114,368)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other non-current liabilities
|
|
(973)
|
|
|
(933)
|
|
|
(925)
|
|
|
(147)
|
|
Other assets
|
|
6,285
|
|
|
1,105
|
|
|
—
|
|
|
—
|
|
Net cash used in operating
activities
|
|
(55,700)
|
|
|
(20,992)
|
|
|
(25,838)
|
|
|
(4,105)
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
(83,524)
|
|
|
(15,289)
|
|
|
(2,831)
|
|
|
(450)
|
|
Temporary receipt from government in relation to
relocation of property, plant and equipment
|
|
859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition of subsidiary, net of cash
acquired
|
|
2,874
|
|
|
(27,549)
|
|
|
—
|
|
|
—
|
|
Pledged deposit for copper future
contracts
|
|
—
|
|
|
8,480
|
|
|
9
|
|
|
1
|
|
Net cash used in investing
activities
|
|
(79,791)
|
|
|
(34,358)
|
|
|
(2,822)
|
|
|
(449)
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
(32,972)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Repayment of bank loans
|
|
—
|
|
|
(10,000)
|
|
|
(30,000)
|
|
|
(4,767)
|
|
Proceeds from new bank loans
|
|
10,000
|
|
|
40,000
|
|
|
30,000
|
|
|
4,767
|
|
Repayments of advance from related parties
|
|
(3,291)
|
|
|
(3,113)
|
|
|
(16,660)
|
|
|
(2,647)
|
|
Proceeds of advance from related parties
|
|
—
|
|
|
2,015
|
|
|
22,916
|
|
|
3,641
|
|
Net cash provided by (used in)
financing activities
|
|
(26,263)
|
|
|
28,902
|
|
|
6,256
|
|
|
994
|
|
Effect of foreign exchange rate changes on
cash
|
|
(4,259)
|
|
|
(1,213)
|
|
|
(154)
|
|
|
(24)
|
|
Decrease in cash
|
|
(166,013)
|
|
|
(27,661)
|
|
|
(22,558)
|
|
|
(3,584)
|
|
Cash at beginning of period
|
|
438,835
|
|
|
115,738
|
|
|
88,077
|
|
|
13,994
|
|
Cash at end of period
|
|
272,822
|
|
|
88,077
|
|
|
65,519
|
|
|
10,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
December 31, 2010
|
|
|
December 31, 2011
|
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(1,106,265)
|
|
|
(736,623)
|
|
|
(117,037)
|
|
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Share based compensation
|
|
|
22,431
|
|
|
17,268
|
|
|
2,744
|
|
Depreciation
|
|
|
116,190
|
|
|
59,218
|
|
|
9,409
|
|
Land use right expense
|
|
|
1,477
|
|
|
1,591
|
|
|
253
|
|
Loss on disposal of property, plant and
equipment
|
|
|
3,306
|
|
|
20
|
|
|
3
|
|
Impairment loss of property, plant and
equipment
|
|
|
992,620
|
|
|
603,266
|
|
|
95,849
|
|
Impairment loss of goodwill
|
|
|
—
|
|
|
41,440
|
|
|
6,584
|
|
Impairment loss of land use rights
|
|
|
—
|
|
|
2,925
|
|
|
465
|
|
Impairment loss of VAT recoverable
|
|
|
—
|
|
|
28,220
|
|
|
4,484
|
|
Change in fair value of contingent consideration
liabilities
|
|
|
2,868
|
|
|
(10,361)
|
|
|
(1,646)
|
|
Foreign currency exchange (gain) loss, net
|
|
|
159
|
|
|
(175)
|
|
|
(28)
|
|
Deferred tax expense
|
|
|
(22,067)
|
|
|
541
|
|
|
86
|
|
Inventory write-downs
|
|
|
1,887
|
|
|
15,659
|
|
|
2,488
|
|
Provision for doubtful debts
|
|
|
47
|
|
|
—
|
|
|
—
|
|
Change in assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
16,329
|
|
|
(131,657)
|
|
|
(20,918)
|
|
Bills receivable
|
|
|
(9,550)
|
|
|
(1,382)
|
|
|
(220)
|
|
Inventories
|
|
|
(108,916)
|
|
|
19,830
|
|
|
3,151
|
|
Prepaid expenses and other current assets
|
|
|
(23,631)
|
|
|
(53,772)
|
|
|
(8,545)
|
|
Income tax receivable
|
|
|
2,433
|
|
|
—
|
|
|
—
|
|
Accounts payable
|
|
|
72,636
|
|
|
2,585
|
|
|
411
|
|
Accrued expenses and other payables
|
|
|
2,739
|
|
|
1,813
|
|
|
288
|
|
Income taxes payable
|
|
|
1,988
|
|
|
1,454
|
|
|
230
|
|
Reversal of provision for consumption tax
|
|
|
(103,780)
|
|
|
—
|
|
|
—
|
|
Other non-current liabilities
|
|
|
(3,955)
|
|
|
(3,766)
|
|
|
(598)
|
|
Other assets
|
|
|
10,824
|
|
|
5,140
|
|
|
817
|
|
Net cash used in operating
activities
|
|
|
(130,230)
|
|
|
(136,766)
|
|
|
(21,730)
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
(169,761)
|
|
|
(51,294)
|
|
|
(8,150)
|
|
Payments for land use rights
|
|
|
(598)
|
|
|
—
|
|
|
—
|
|
Temporary receipt from government in relation to
relocation of property, plant and equipment
|
|
|
36,859
|
|
|
—
|
|
|
—
|
|
Acquisition of a subsidiary (net of cash RMB3,032
acquired)
|
|
|
2,874
|
|
|
—
|
|
|
—
|
|
Acquisition of additional 8% beneficial ownership
interests in a subsidiary
|
|
|
—
|
|
|
(42,701)
|
|
|
(6,785)
|
|
Acquisition of a subsidiary (net of cash RMB7,051
acquired)
|
|
|
—
|
|
|
(27,549)
|
|
|
(4,377)
|
|
Net cash used in investing
activities
|
|
|
(130,626)
|
|
|
(121,544)
|
|
|
(19,312)
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
(32,972)
|
|
|
—
|
|
|
—
|
|
Repayment of bank loans
|
|
|
—
|
|
|
(70,000)
|
|
|
(11,122)
|
|
Proceeds from new banks loans
|
|
|
10,000
|
|
|
120,000
|
|
|
19,066
|
|
Repayment of advance from related parties
|
|
|
(3,291)
|
|
|
(70,482)
|
|
|
(11,198)
|
|
Proceeds from advance from related parties
|
|
|
—
|
|
|
76,339
|
|
|
12,129
|
|
Net cash provided by (used in) financing
activities
|
|
|
(26,263)
|
|
|
55,857
|
|
|
8,875
|
|
Effect of foreign exchange rate changes on
cash
|
|
|
(11,247)
|
|
|
(4,850)
|
|
|
(770)
|
|
Decrease in cash
|
|
|
(298,366)
|
|
|
(207,303)
|
|
|
(32,937)
|
|
Cash at beginning of year
|
|
|
571,188
|
|
|
272,822
|
|
|
43,347
|
|
Cash at end of year
|
|
|
272,822
|
|
|
65,519
|
|
|
10,410
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Amounts expressed in thousands, except per
ADS data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
December 31, 2010
|
|
|
September 30, 2011
|
|
|
December 31, 2011
|
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net profit (loss) attributable to the
Company
|
|
61,377
|
|
|
(20,654)
|
|
|
(683,140)
|
|
|
(108,541)
|
|
Share-based compensation
|
|
6,360
|
|
|
2,271
|
|
|
9,620
|
|
|
1,528
|
|
Impairment loss of property, plant and
equipment
|
|
—
|
|
|
—
|
|
|
603,266
|
|
|
95,849
|
|
Impairment loss of goodwill
|
|
—
|
|
|
—
|
|
|
41,440
|
|
|
6,584
|
|
Impairment loss of land use rights
|
|
—
|
|
|
—
|
|
|
2,925
|
|
|
465
|
|
Impairment loss of VAT recoverable
|
|
—
|
|
|
—
|
|
|
28,220
|
|
|
4,484
|
|
Loss on disposal of property, plant and
equipment
|
|
3,303
|
|
|
7
|
|
|
13
|
|
|
2
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
2,868
|
|
|
(171)
|
|
|
(4,913)
|
|
|
(781)
|
|
Reversal of provision for consumption tax
|
|
(114,368)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
500
|
|
|
—
|
|
|
(6,120)
|
|
|
(972)
|
|
Non-GAAP net loss attributable to the
Company
|
|
(39,960)
|
|
|
(18,547)
|
|
|
(8,689)
|
|
|
(1,382)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net profit (loss) attributable to the Company
per ADS – Basic
|
|
3.75
|
|
|
(1.22)
|
|
|
(40.50)
|
|
|
(6.43)
|
|
Share-based compensation
|
|
0.39
|
|
|
0.13
|
|
|
0.57
|
|
|
0.09
|
|
Impairment loss of property, plant and
equipment
|
|
—
|
|
|
—
|
|
|
35.76
|
|
|
5.68
|
|
Impairment loss of goodwill
|
|
—
|
|
|
—
|
|
|
2.46
|
|
|
0.39
|
|
Impairment loss of land use rights
|
|
—
|
|
|
—
|
|
|
0.17
|
|
|
0.03
|
|
Impairment loss of VAT recoverable
|
|
—
|
|
|
—
|
|
|
1.67
|
|
|
0.27
|
|
Loss on disposal of property, plant and
equipment
|
|
0.20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
0.18
|
|
|
(0.01)
|
|
|
(0.29)
|
|
|
(0.05)
|
|
Reversal of provision for consumption tax
|
|
(6.99)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
0.03
|
|
|
—
|
|
|
(0.36)
|
|
|
(0.06)
|
|
Non-GAAP net loss attributable to the
Company per ADS - Basic
|
|
(2.44)
|
|
|
(1.10)
|
|
|
(0.52)
|
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net profit (loss) attributable to the Company
per ADS – Diluted
|
|
3.75
|
|
|
(1.22)
|
|
|
(40.50)
|
|
|
(6.43)
|
|
Share-based compensation
|
|
0.39
|
|
|
0.13
|
|
|
0.57
|
|
|
0.09
|
|
Impairment loss of property, plant and
equipment
|
|
—
|
|
|
—
|
|
|
35.76
|
|
|
5.68
|
|
Impairment loss of goodwill
|
|
—
|
|
|
—
|
|
|
2.46
|
|
|
0.39
|
|
Impairment loss of land use rights
|
|
—
|
|
|
—
|
|
|
0.17
|
|
|
0.03
|
|
Impairment loss of VAT recoverable
|
|
—
|
|
|
—
|
|
|
1.67
|
|
|
0.27
|
|
Loss on disposal of property, plant and
equipment
|
|
0.20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
0.18
|
|
|
(0.01)
|
|
|
(0.29)
|
|
|
(0.05)
|
|
Reversal of provision for consumption tax
|
|
(6.99)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
0.03
|
|
|
—
|
|
|
(0.36)
|
|
|
(0.06)
|
|
Non-GAAP net loss attributable to the
Company per ADS - Diluted
|
|
(2.44)
|
|
|
(1.10)
|
|
|
(0.52)
|
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN ENVIRONMENTAL ENERGY
LIMITED
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Amounts expressed in thousands, except per ADS
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
December 31, 2010
|
|
|
December 31, 2011
|
|
|
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss attributable to the Company
|
|
|
|
|
(1,109,015)
|
|
|
(747,681)
|
|
|
(118,794)
|
|
Share-based compensation
|
|
|
|
|
22,431
|
|
|
17,268
|
|
|
2,744
|
|
Impairment loss of property, plant and
equipment
|
|
|
|
|
992,620
|
|
|
603,266
|
|
|
95,849
|
|
Impairment loss of goodwill
|
|
|
|
|
—
|
|
|
41,440
|
|
|
6,584
|
|
Impairment loss of land use rights
|
|
|
|
|
—
|
|
|
2,925
|
|
|
465
|
|
Impairment loss of VAT recoverable
|
|
|
|
|
—
|
|
|
28,220
|
|
|
4,484
|
|
Loss on disposal of property, plant and
equipment
|
|
|
|
|
3,306
|
|
|
20
|
|
|
3
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
|
|
|
2,868
|
|
|
(9,289)
|
|
|
(1,476)
|
|
Reversal of provision for consumption tax
|
|
|
|
|
(103,780)
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
|
|
|
(20,407)
|
|
|
(6,120)
|
|
|
(972)
|
|
Non-GAAP net loss attributable to the
Company
|
|
|
|
|
(211,977)
|
|
|
(69,951)
|
|
|
(11,113)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss attributable to the Company per ADS –
Basic
|
|
|
|
|
(66.79)
|
|
|
(44.75)
|
|
|
(7.11)
|
|
Share-based compensation
|
|
|
|
|
1.35
|
|
|
1.03
|
|
|
0.16
|
|
Impairment loss of property, plant and
equipment
|
|
|
|
|
59.78
|
|
|
36.10
|
|
|
5.74
|
|
Impairment loss of goodwill
|
|
|
|
|
—
|
|
|
2.48
|
|
|
0.39
|
|
Impairment loss of land use rights
|
|
|
|
|
—
|
|
|
0.18
|
|
|
0.03
|
|
Impairment loss of VAT recoverable
|
|
|
|
|
—
|
|
|
1.69
|
|
|
0.27
|
|
Loss on disposal of property, plant and
equipment
|
|
|
|
|
0.20
|
|
|
—
|
|
|
—
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
|
|
|
0.17
|
|
|
(0.56)
|
|
|
(0.09)
|
|
Reversal of provision for consumption tax
|
|
|
|
|
(6.25)
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
|
|
|
(1.23)
|
|
|
(0.37)
|
|
|
(0.06)
|
|
Non-GAAP net loss attributable to the
Company per ADS - Basic
|
|
|
|
|
(12.77)
|
|
|
(4.20)
|
|
|
(0.67)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss attributable to the Company per ADS –
Diluted
|
|
|
|
|
(66.79)
|
|
|
(44.75)
|
|
|
(7.11)
|
|
Share-based compensation
|
|
|
|
|
1.35
|
|
|
1.03
|
|
|
0.16
|
|
Impairment loss of property, plant and
equipment
|
|
|
|
|
59.78
|
|
|
36.10
|
|
|
5.74
|
|
Impairment loss of goodwill
|
|
|
|
|
—
|
|
|
2.48
|
|
|
0.39
|
|
Impairment loss of land use rights
|
|
|
|
|
—
|
|
|
0.18
|
|
|
0.03
|
|
Impairment loss of VAT recoverable
|
|
|
|
|
—
|
|
|
1.69
|
|
|
0.27
|
|
Loss on disposal of property, plant and
equipment
|
|
|
|
|
0.20
|
|
|
—
|
|
|
—
|
|
Change in fair value of contingent consideration
liabilities (the portion to be borne by the Company)
|
|
|
|
|
0.17
|
|
|
(0.56)
|
|
|
(0.09)
|
|
Reversal of provision for consumption tax
|
|
|
|
|
(6.25)
|
|
|
—
|
|
|
—
|
|
Income tax effect of reconciliation items
|
|
|
|
|
(1.23)
|
|
|
(0.37)
|
|
|
(0.06)
|
|
Non-GAAP net loss attributable to the
Company per ADS - Diluted
|
|
|
|
|
(12.77)
|
|
|
(4.20)
|
|
|
(0.67)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Gushan Environmental Energy Limited