CFY CF Energy Corp

CF Energy Corp. (TSX-V: CFY) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), an energy provider in the People’s Republic of China (the ”PRC” or “China”), announces that the Company has filed its unaudited condensed interim consolidated financial results for the three-month and six-month periods ended June 30, 2023 (“Q2 2023 and 1H 2023” respectively).  

Q2 2023 financial highlights

Continuing Operations

In millions	Q2 2023		Q2 2022		Change		%		Q2 2023		Q2 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Revenue	117.4		84.0		33.4		40	%	22.8		16.5		6.3
Gross Profit	34.9		23.2		11.7		51	%	6.8		4.6		2.2
Gross Profit Margin	29.8	%	27.6	%	2.2	%
Net Profit	16.5		0.1		16.4		>999	%	3.3		0.0		3.3
Adjusted net Profit (loss)	13.8		(4.2	)	18.0		425	%	2.8		(0.9	)	3.7
EBITDA	32.2		16.4		15.8		96	%	6.2		3.2		3.0
Adjusted EBITDA	29.5		12.1		17.4		143	%	5.7		2.3		3.4

Revenue in Q2 2023 was RMB117.4 million (approx. CAD22.8 million), an increase of RMB33.4 million (approx. CAD6.3 million), or 40%, from RMB84.0 million (approx. CAD16.5 million) for the three-month period ended June 30, 2022 (“Q2 2022”).

Gross profit in Q2 2023 was RMB34.9 million (approx. CAD6.8 million), an increase of RMB11.7 million (CAD2.2 million) or 51% from RMB23.2 million (approx. CAD4.6 million) in Q2 2022.   Overall Gross margin in Q2 2023 was 29.8%, an increase of 2.2 percentage points from 27.6% in Q2 2022.  

In millions	Q2 2023		Q2 2022		Change		%		Q2 2023		Q2 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Net profit for the period	16.5		0.1		16.4		>999	%	3.3		0.0		3.3
Non-recurring items
Fair value change on derivative financial instrument	(2.7	)	(4.5	)	1.8		40	%	(0.5	)	(0.9	)	0.4
Recognition of share-based payment expenses	-		0.2		(0.2	)	-100	%	-		0.0		(0.0	)
Adjusted net profit (loss) for the period (non-IFRS)	13.8		(4.2	)	18.0		425	%	2.8		(0.9	)	3.7

Net profit in Q2 2023 was RMB16.5 million (approx. CAD3.3 million), an increase of RMB16.4 million (approx. CAD3.3 million) from RMB0.1 million (approx. CAD0.0 million) in Q2 2022. Net profit in Q2 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB2.7 million (approx. CAD0.5 million), the adjusted net profit in Q2 2023 (non-IFRS) was RMB13.8 million (approx. CAD2.8 million), an increase of RMB18.0 million (approx. CAD3.7 million) or 425% from adjusted net loss of RMB4.2 million (approx. CAD0.9 million) in Q2 2022.

Basic earnings per share (“EPS”) in Q2 2023 was RMB0.27 (CAD0.05) per share. Adjusted loss per share in Q2 2023 was RMB0.21 (CAD0.04) per share (non-IFRS).

In millions	Q2 2023		Q2 2022		Change		%		Q2 2023		Q2 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
EBITDA for the period	32.2		16.4		15.8		96	%	6.2		3.2		3.0
Non-recurring items
Fair value change on derivative financial instrument	(2.7	)	(4.5	)	1.8		40	%	(0.5	)	(0.9	)	0.4
Recognition of share-based payment expenses	-		0.2		(0.2	)	-100	%	-		0.0		(0.0	)
Adjusted EBITDA for the period	29.5		12.1		17.4		143	%	5.7		2.3		3.4

EBITDA (Non-IFRS measure) in Q2 2023 was RMB32.2 million (approx. CAD6.2 million), an increase of RMB15.8 million (approx. CAD3.0 million), or 96%, from RMB16.4 million (approx. CAD3.2 million) in Q2 2022. EBITDA in Q2 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB2.7 million (approx. CAD0.5 million), the adjusted EBITDA in Q2 2023 (non-IFRS) was RMB29.5 million (approx. CAD5.7 million), an increase of RMB17.4 million (approx. CAD3.4 million), or 143%, from RMB12.1 million (approx. CAD2.3 million) in Q2 2022.

1H 2023 financial highlights

Continuing Operations

In millions	1H 2023		1H 2022		Change		%		1H 2023		1H 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Revenue	217.5		179.4		38.1		21	%	42.3		35.2		7.1
Gross Profit	63.5		60.5		3.0		5	%	12.3		11.9		0.4
Gross Profit Margin	29.2	%	33.8	%	-4.6	%
Net Profit	20.0		11.4		8.6		75	%	3.9		2.2		1.7
Adjusted net Profit	14.5		1.0		13.5		>999	%	2.9		0.2		2.7
EBITDA	52.2		47.1		5.1		11	%	10.1		9.2		0.9
Adjusted EBITDA	46.7		36.7		10.0		27	%	9.1		7.2		1.9

Revenue in 1H 2023 was RMB217.5 million (approx. CAD42.3 million), an increase of RMB38.1 million (approx. CAD7.1 million), or 21%, from RMB179.4 million (approx. CAD35.2 million) for the six-month period ended June 30, 2022 (“1H 2022”).

Gross profit in 1H 2023 was RMB63.5 million (approx. CAD12.3 million), an increase of RMB3.0 million (CAD0.4 million) or 5% from RMB60.5 million (approx. CAD11.9 million) in 1H 2022. Overall Gross margin in 1H 2023 was 29.2%, a decrease of 4.6 percentage points from 33.8% in 1H 2022.

In millions	1H 2023		1H 2022		Change		%		1H 2023		1H 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Net profit for the period	20.0		11.4		8.6		75	%	3.9		2.2		1.7
Non-recurring items
Fair value change on derivative financial instrument	(4.7	)	(10.8	)	6.1		56	%	(0.9	)	(2.1	)	1.2
Recognition of share-based payment expenses	-		0.4		(0.4	)	-100	%	-		0.1		(0.1	)
Government financial assistance	(0.8	)	-		(0.8	)	100	%	(0.1	)	-		(0.1	)
Adjusted net profit for the period (non-IFRS)	14.5		1.0		13.5		>999	%	2.9		0.2		2.7

Net profit in 1H 2023 was RMB20.0 million (approx. CAD3.9 million), an increase of RMB8.6 million (approx. CAD1.7 million), or 75%, from RMB11.4 million (approx. CAD2.2 million) in 1H 2022. Net profit in 1H 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB4.7 million (approx. CAD0.9 million) and government financial assistance of RMB0.8 million (approx. CAD0.1 million), the adjusted net profit in 1H 2023 (non-IFRS) was RMB14.5 million (approx. CAD2.9 million), an increase of RMB13.5 million (approx. CAD2.7 million) from RMB1.0 million (approx. CAD0.2 million) in 1H 2022.

Basic earnings per share (“EPS”) in 1H 2023 was RMB0.36 (CAD0.07) per share. Adjusted EPS in 1H 2023 was RMB0.22 (CAD0.04) per share (non-IFRS).

In millions	1H 2023		1H 2022		Change		%		1H 2023		1H 2022		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
EBITDA for the period	52.2		47.1		5.1		11	%	10.1		9.2		0.9
Non-recurring items
Fair value change on derivative financial instrument	(4.7	)	(10.8	)	6.1		56	%	(0.9	)	(2.1	)	1.2
Recognition of share-based payment expenses	-		0.4		(0.4	)	-100	%	-		0.1		(0.1	)
Government financial assistance	(0.8	)	-		(0.8	)	100	%	(0.1	)	-		(0.1	)
Adjusted EBITDA for the period	46.7		36.7		10.0		27	%	9.1		7.2		1.9

EBITDA (Non-IFRS measure) in 1H 2023 was RMB52.2 million (approx. CAD10.1 million), an increase of RMB5.1 million (approx. CAD0.9 million), or 11%, from RMB47.1 million (approx. CAD9.2 million) in 1H 2022. EBITDA in 1H 2023 included non-recurring items. On a comparable basis, after excluding the effects of non-recurring items, the fair value change on derivative financial instrument of RMB4.7 million (approx. CAD0.9 million) and government financial assistance of RMB0.8 million (approx. CAD0.1 million), adjusted EBITDA in 1H 2023 was RMB46.7 million (approx. CAD9.1 million), an increase of RMB10.0 million (approx. CAD1.9 million), or 27%, from RMB36.7 million (approx. CAD7.2 million) in 1H 2022.

Following the relaxation of COVID-19 restriction policy at the turn of 2023 in China, we are very pleased to report that both business and economic recovery had picked up greater momentum in the 2nd quarter of 2023 which saw a 40% period-to-period increase in revenue for that period with an overall increase of 21% for the interim period of 2023. Bottom line profit also improved significantly as a result with adjusted net profit (non-IFRS) of RMB13.8 million for the 2nd quarter of 2023 and RMB14.5 million for the interim period of 2023. Going forward, we will continue to focus on the integrated smart energy and the smart mobility segments of the Company and continue to expand the businesses in China and transition clean energy business as an integrated energy player.

The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.SEDAR.com or from the Company's website at www.cfenergy.com.

About CF Energy Corp. (Previously known as: Changfeng Energy Inc.)

CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange (“TSX-V”) under the stock symbol “CFY”. It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC.

CONTACT INFORMATION

Corporate Investment RelationsInvestor.relations@changfengenergy.cn

Charles WangExecutive Assistant to CEO & Chair of the Boardzhaoyu.wang@changfengenergy.cn

Frederick WongDirector of the Boardfred.wong@changfengenergy.cn416-362-5032+852-9020-9394

Mike LiuVP Capital Marketmike.liu@changfengenergy.cn

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”). All statements, other than statements of historical fact, included or incorporated by reference in this document are Forward-Looking Statements, including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future (including, without limitation, no significant adjustments to the gas selling price and charges for related services imposed by the relevant PRC government, the tourism industry continues to recover from COVID-19 impact and no delay in the development of the electric vehicle battery swap stations or the Haitang Bay Integrated Smart Energy Project). These Forward-Looking Statements can be identified by the use of forward-looking words such as “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe” or “continue” or similar words or the negative thereof. No assurance can be given that the plans, intentions or expectations or assumptions upon which these Forward-Looking Statements are based will prove to be correct and such Forward-Looking Statements included in this news release should not be unduly relied upon. 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. Such Forward-Looking Statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such Forward-Looking Statements. These factors include, without limitation, no significant and continuing adverse changes in general economic conditions or conditions in the financial, tourism, and gas distribution and electric vehicle markets or delays in the development of key projects. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Company’s filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider those factors. The Forward-Looking Statements included in this news release 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. 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. This news release contains future oriented financial information and financial outlook information (collectively, "FOFI") (including, without limitation, statements regarding expected average production), and are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The FOFI has been prepared by management to provide an outlook of the Company's activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's reasonable estimates and judgments, however, actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein. Any FOFI speaks only as of the date on which it is made, and the Company disclaims any intent or obligation to update any FOFI, whether as a result of new information, future events or results or otherwise, unless required by applicable laws.

Non-IFRS Financial Measures

This news release contains financial terms that are not considered in the International Financial Reporting Standards ("IFRS"): EBITDA, Adjusted EBITDA and Adjusted Net Profit. These financial measures, together with measures prepared in accordance with IFRS, provide useful information to investors and shareholders, as management uses them to evaluate the operating performance of the Company. The Company's determination of these non-IFRS measures may differ from other reporting issuers, and therefore are unlikely to be comparable to similar measures presented by other companies. Further, these non-IFRS measures should not be considered in isolation or as a substitute for measures of performance or cash flows prepared in accordance with IFRS. These financial measures are included because management uses this information to analyze operating performance and liquidity.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.