Changfeng Revenue Up 26%, Gross Profit Up 27% and Net Income Up 14% for Year Ended December 31, 2013
April 25 2014 - 10:43AM
Marketwired Canada
Changfeng Energy Inc., (TSX VENTURE:CFY) ("Changfeng" or the "Company"), is
pleased to announce that the Company has filed its audited consolidated
financial statements for the fiscal year ended December 31, 2013. The audited
consolidated financial statements and Management Discussion and Analysis can be
downloaded from www.SEDAR.com or from the Company's website at
www.changfengenergy.com.
Summary of Consolidated Financial Results for Fiscal Year Ended December 31,
2013 and 2012
In thousands of Canadian dollars
except percentages and per share
amounts 2013 2012 Change %
-------------------------------- ----------------------------------------
Revenue 42,049 33,273 8,776 26%
-------------------------------- ----------------------------------------
Gross margin 19,998 15,775 4,243 27%
-------------------------------- ----------------------------------------
Other operating income - 717 (717) -100%
-------------------------------- ----------------------------------------
Net income 2,814 2,478 336 14%
-------------------------------- ----------------------------------------
EBITDA (1) 9,806 8,006 1,800 22%
-------------------------------- ----------------------------------------
Adjusted net income (1) (2) 2,814 1,935 879 45%
-------------------------------- ----------------------------------------
Note:
1. See Non- GAAP Financial Measures in this Press Release.
2. The adjusted net income for 2012 excludes a one-time government grant of
$543,000, net of tax.
Sales revenue from the gas distribution utility for 2013 was $34.2 million, an
increase of $6.5 million, or 23%, from $27.7 million in 2012. This increase is
mainly attributable to increased gas volume sold including newly added gas
volume sold in Xiangdong operation, higher average selling price to industrial
and commercial residents in the Sanya operation, higher pipeline connection
revenue, as well as Chinese RMB appreciation.
Sales revenue from the CNG refueling retail station for 2013 was $7.9 million,
an increase of $2.3 million, or 41%, from $5.6 million in 2012. The significant
increase was attributable to the combined effect of the increased gas volume
sold (13.3 million m3 in 2013 compared to 10.1 million m3 in 2012) and higher
average selling prices. Effective August 13, 2012, the local natural gas pricing
authority approved a 15% price increase for CNG retail stations in Changsha City
as a response to a gasoline price increase. In addition, the Company has been
upgrading its station's refueling capacity to meet the increasing demand that is
primarily driven by both rising gasoline prices and continued government support
for clean energy vehicles. It is expected that more existing gasoline-fueled
buses in the city will be converted into dual-fuel vehicles (gasoline/CNG).
Gross margin for 2013 was $20.0 million, an increase of $4.2 million, or 27%,
from $15.8 million in 2012. The gross margin percentage of 48% for 2013 is
approximately the same as for 2012.
Gas distribution utility gross margin as a percentage of sales year-over-year
improved 1% (53% for 2013 VS 52% for 2012) reflecting the reduced volume of gas
purchased at market rate prices and higher-value commercial customers from the
Haitang Bay district in the Sanya Region. The CNG refueling station gross margin
as a percentage of sales year-over-year increased 3% (25% for 2013 VS 22% for
2012) primarily to selling price increases.
General and administrative expenses for 2013 were $9.3 million, an increase of
$1.8 million, or 24%, from $7.5 million in 2012. The increase was attributable
to higher employee salaries and benefits as a result of a higher inflation rate
in China, additional employees, and higher conference and professional fees.
General and administrative expenses as a percentage of sales for 2013 were 22%
which is approximately the same as for 2012.
Travel and business development expenses for 2013 were $3.3 million, an increase
of $0.4 million, or 13%, from $2.9 million in 2012. As a percentage of sales,
travel and business development expenses for 2013 was 8%, a decrease from 9% in
2012. These expenses normally fluctuate with travel and business development
activities in mainland China as the Company seeks to develop new projects in
close proximity to the new national pipelines.
Net income for fiscal 2013 was $2.8 million, or $0.045 per share (basic and
diluted) compared to $2.5 million or $0.038 per share (basic and diluted) in
2012.
EBITDA (non-GAAP measure as identified and defined under section "Non-GAAP
Measures") for fiscal 2013 was $9.8 million, an increase of $1.8 million, or
22%, from $8.0 million for 2012. The increase was driven primarily by higher
sales. EBITDA as a percentage of revenue for 2013 was 23%, compared to 24% in
the same period in 2012. This decrease is largely attributable to the other
operating income earned in 2012.
Adjusted net income (non-GAAP measure as identified and defined under section
"Non-GAAP Measures") for fiscal 2013 was $2.8 million, compared to $1.9 million
for the same period in 2012 as increase of 45%.
Financial Position
Cash increased by $8.8 million to $15.2 million at December 31, 2013 from $6.4
million at December 31, 2012.
Net cash provided by operations was $10.0 million for fiscal 2013 compared to
$8.4 million in 2012.
Cash provided by financing activities in 2013 included a $10.0 million
withdrawal from the term loan facility and $3.3 million from line of credit,
offset by the short term loan payment of $5.0 million, $0.8 million term loan
principal payment and $0.5 million paid for the share buyback.
Cash used in investing activity included capital expenditures of $9.3 million
for fiscal 2013 compared to $6.3 million in 2012. The expenditures were mainly
related to the purchase of equipment for the Xiangdong project and the on-going
construction of pipeline networks to connect new customers in the Sanya region.
Non-GAAP Financial Measures
The Company uses the following non-GAAP financial measures: EBITDA and adjusted
net income. The Company believes these non-GAAP financial measures provide
useful information to both management and investors in measuring the financial
performance and financial condition of the Company for the reasons outlined
below.
Management uses these non-GAAP financial measures to exclude the impact of
certain expenses and income that must be recognized under GAAP when analyzing
consolidated operating performance, as the excluded items are not necessarily
reflective of the Company's underlying operating performance and make
comparisons of underlying financial performance between periods difficult. From
time to time, the Company may exclude additional items if it believes doing so
would result in a more effective analysis of underlying operating performance.
The exclusion of certain items does not imply that they are non-recurring.
These measures do not have a standardized meaning prescribed by GAAP and
therefore they may not be comparable to similarly titled measures presented by
other publicly traded companies and should not be construed as an alternative to
other financial measures determined in accordance with GAAP. These measures are
listed and defined below:
EBITDA
EBITDA is defined herein as income before income tax expense, interest expense,
depreciation and amortization, share of loss of investment in associate, as well
as non-cash stock-based compensation expense. EBITDA does not have any
standardized meaning prescribed by IFRS and therefore may not conform to the
definition used by other companies. A reconciliation of net income to EBITDA for
each of the periods presented as follows:
--------------------------------------------------------------------------
In thousands
(except for % figures) 2013 2012 Change %
--------------------------------------------------------------------------
Net Income 2,814 2,478 336 14%
Add (less):
Income tax 2,594 1,886 708 38%
Interest (income) expense (37) 26 (63) -242%
Share of loss of investment
in associate 1 24 (23) -95%
Stock-based compensation 382 180 202 112%
Amortization 2,414 1,959 455 23%
Interest on borrowing 1,638 1,453 185 13%
--------------------------------------------------------------------------
EBITDA 9,806 8,006 1,800 22%
--------------------------------------------------------------------------
Adjusted net income
Adjusted net income is calculated as net income before other operating income.
Other operating income represents a government grant received by the Company.
There is no guarantee that the Company will receive this government grant every
year. Changfeng believes that adjusted net income is a useful supplemental
measure of the Company's operating results.
The calculation of adjusted net income is provided in the table below:
In thousands of Canadian dollars
except percentages and per share amounts 2013 2012
--------------------------------------------- ----------------------------
Net income 2,814 2,478
Less: Other operating income, net of tax - 543
--------------------------------------------- ----------------------------
Adjusted net income 2,814 1,935
--------------------------------------------- ----------------------------
About Changfeng Energy Inc.
Changfeng Energy Inc., is a natural gas service provider with operations located
throughout the People's Republic of China. The Company services industrial,
commercial and residential customers, providing them with natural gas for
heating purposes and fuel for transportation. The Company has developed a
significant natural gas pipeline network as well as urban gas delivery networks,
stations, substations and gas pressure regulating stations in Sanya City &
Haitang Bay. Through its network of pipelines, the Company provides safe and
reliable delivery of natural gas to both homes and businesses. The Company is
headquartered in Toronto, Ontario and its shares trade on the Toronto Venture
Exchange under the trading symbol "CFY". For more information, please visit the
Company website at www.changfengenergy.com.
Forward-Looking Statements
Information set forth in this news release may involve forward-looking
statements under applicable securities laws. The forward-looking statements
contained herein are expressly qualified in their entirety by this cautionary
statement. The forward-looking statements included in this document are made as
of the date of this document and the Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as expressly
required by applicable securities legislation. Although Management believes that
the expectations represented in such forward-looking statements are reasonable,
there can be no assurance that such expectations will prove to be correct. This
news release does not constitute an offer to sell or solicitation of an offer to
buy any of the securities described herein and accordingly undue reliance should
not be put on such.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSXV) accepts responsibility for the adequacy
or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Changfeng Energy Inc.
Mr. Yan Zhao CPA. CA
Chief Financial Officer
416.362.5032/647.528.0115
yan.zhao@changfengenergy.com
Changfeng Energy Inc.
Ms. Ann S.Y.Lin
VP, Corporate Development and Corporate Secretary
416.362.5032
ann@changfengenergy.com
www.changfengenergy.com
CF Energy (TSXV:CFY)
Historical Stock Chart
From Apr 2024 to May 2024
CF Energy (TSXV:CFY)
Historical Stock Chart
From May 2023 to May 2024
