omniture

China Yuchai International Announces Unaudited Third Quarter 2011 Financial Results

SINGAPORE, November 7, 2011 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company"), announced today its unaudited consolidated financial results for the third quarter and nine months ended September 30, 2011.

The financial highlights for the third quarter of 2011 are:

  • Net revenue was RMB 3.4 billion (US$ 542.6 million) compared with RMB 3.3 billion (US$ 524.4 million) in the third quarter of 2010;
  • Total number of diesel engine units sold by the Company's main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL") was 106,358 units compared with 109,023 units in the same quarter of 2010;
  • The gross margin was 20.0%, down from 23.1% in the third quarter of 2010, but up from 19.2% in the second quarter of 2011;
  • Total net profit attributable to China Yuchai's shareholders was RMB 63.6 million (US$ 10.0 million), compared with RMB 217.5 million (US$ 34.2 million) in the third quarter of 2010;
  • Earnings per share of RMB 1.71 (US$ 0.27), compared with RMB 5.84 (US$ 0.92) in the
    third quarter of 2010;
  • As of September 30, 2011, cash and cash equivalents were RMB 2.6 billion (US$ 406.5 million).

Third Quarter 2011 Financial Results

Net revenue for the third quarter of 2011 was RMB 3.4 billion (US$ 542.6 million), compared with RMB 3.3 billion (US$ 524.4 million) in the third quarter of 2010. With the slowdown in the Chinese commercial vehicle market, especially in the truck sector, the number of diesel engines sold by GYMCL during the third quarter of 2011 was 106,358 units compared with 109,023 units in the same quarter of 2010.

Gross profit was RMB 691.0 million (US$ 108.7 million) compared with RMB 769.3 million (US$ 121.1 million) in the third quarter of 2010. The gross margin was 20.0% in the third quarter of 2011 as compared with 23.1% a year ago. The lower gross margin was mainly due to an increase in material costs and shift to off-highway engines (mainly for marine, industrial and agriculture applications) compared to the same quarter a year ago.

Other expenses decreased to RMB 25.9 million (US$ 4.1 million) from a gain of RMB 36.5 million (US$ 5.7 million) in the third quarter of 2010, mainly due to foreign exchange revaluation losses.

Research and development ("R&D") expenses were RMB 83.5 million (US$ 13.1 million) compared with RMB 95.7 million (US$ 15.1 million) in the third quarter of 2010. As a percentage of net revenue, R&D spending was 2.4% in the third quarter of 2011 compared with 2.9% in the same quarter last year.

Selling, general & administrative ("SG&A") expenses in the third quarter of 2011 were RMB 414.7 million (US$ 65.2 million), increasing from RMB 355.5 million (US$ 55.9 million) in the third quarter of 2010. These SG&A expenses represented 12.0% of third quarter 2011 net revenue compared with 10.7% for the third quarter of 2010. The increase in SG&A expenses compared to last year were mainly due to higher warranty expenses, reduction in the provision of doubtful debts in the prior year and some increase in sales incentives and rebate expenses.

Operating profit declined to RMB 166.9 million (US$ 26.3 million) from RMB 354.7 million (US$ 55.8 million) in the third quarter of 2010, mainly due to lower gross profit and higher SG&A expenses. The operating margin was 4.8% in the third quarter of 2011 compared with 10.6% in the third quarter of 2010.

In the third quarter of 2011, net profit attributable to China Yuchai's shareholders was RMB 63.6 million (US$ 10.0 million), or earnings per share of RMB 1.71 (US$ 0.27), compared with RMB 217.5 million (US$ 34.2 million), or earnings per share of RMB 5.84 (US$ 0.92), in the third quarter of 2010.

Nine Months Ended September 30, 2011

For the nine months ended September 30, 2011, net revenues were RMB 11.7 billion (US$ 1.8 billion) compared with RMB 12.4 billion (US$ 2.0 billion) in the first nine months of 2010. The gross profit was RMB 2.4 billion (US$ 378.6 million) representing a 20.6% gross margin.

Selling, general and administrative expenses declined 5.1% from RMB 1.4 billion (US$ 214.2 million) in the first nine months of 2010 to RMB 1.3 billion (US$ 203.3 million) in the nine months ended September 30, 2011.

Operating profit declined to RMB 885.7 million (US$ 139.4 million) from RMB 1,154.5 million (US$ 181.7 million) in the first nine months of 2010. This is due to lower sales volume and the shift in sales mix to off-highway applications as well as to light-duty engines.

Net profit attributable to China Yuchai's shareholders for the nine months ended September 30, 2011 was RMB 449.2 million (US$ 70.7 million), or earnings per share of RMB 12.05 (US$ 1.90), versus RMB 668.4 million (US$ 105.2 million), or earnings per share of RMB 17.93 (US$ 2.82), in the same period in 2010.

As of September 30, 2011, the Company had cash and cash equivalents of RMB 2.6 billion (US$ 406.5 million) compared with total short-term and long-term interest bearing loans and borrowings of RMB 2.7 billion (US$ 429.7 million). The Company strategically relied on borrowings to finance its operations as the cost of bills discounting has increased substantially compared to last year.

Total equity attributable to China Yuchai's shareholders was RMB 5.2 billion (US$ 813.7 million) on September 30, 2011. The total shares issued and outstanding as of September 30, 2011 were 37,267,673 shares.

Mr. Benny H. Goh, President of China Yuchai, commented, "The third quarter of 2011 continued to face head winds and proved to be a challenging quarter as demand in the commercial vehicle sector dropped due to two main causes: Firstly, the slow-down in construction activities and secondly, the Chinese government's credit tightening measures to contain inflation which affected demand. Our strategy of offering a diversified line of advanced diesel engines into several market segments in China generated slightly higher revenues in the third quarter compared with the same quarter a year ago notwithstanding the difficult market for commercial vehicles."

Exchange Rate Information

The Company's functional currency is the U.S. dollar and its reporting currency is Renminbi. The translation of amounts from Renminbi to U.S. dollars is solely for the convenience of the reader. Translation of amounts from Renminbi to U.S. dollars has been made at the rate of RMB 6.3549 = US$ 1.00, the rate quoted by the People's Bank of China at the close of business on September 30, 2011. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. dollars at that rate or at any other certain rate on September 30, 2011 or at any other date.

Third Quarter 2011 Earnings Web Cast

An audio web cast for the investment community has been scheduled for 8:00 A.M. Eastern Standard Time today, November 7, 2011. The call will be hosted by the President, Mr. Benny H Goh, and Chief Financial Officer, Mr. Weng Ming Hoh, who will present and discuss the financial results and business outlook of the Company, followed by a Q&A session. Mr. Qi Wei Wu, General Manager of GYMCL will be available to answer questions during the Q&A session.

The web cast can be accessed at the investor relations section of the Company's website located at http://www.cyilimited.com. Participants are requested to log into the web cast at least 5 minutes prior to the scheduled start time. The recorded web cast will be available on the website shortly after the earnings call.

About China Yuchai International

China Yuchai International Limited, through its subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the manufacture, assembly, and sale of a wide array of light-duty, medium-sized and heavy-duty diesel engines for construction equipment, trucks, buses and cars in China. GYMCL also produces diesel power generators, which are primarily used in the construction and mining industries. Through its regional sales offices and authorized customer service centers, the Company distributes its diesel engines directly to auto OEMs and retailers and provides maintenance and retrofitting services throughout China. Founded in 1951, GYMCL has established a reputable brand name, strong research and development team and significant market share in China with high-quality products and reliable after-sales support. In 2010, GYMCL sold 551,592 diesel engines and is recognised as a leading manufacturer and distributor of diesel engines in China. For more information, please visit http://www.cyilimited.com

Safe Harbor Statement

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time. The Company specifically disclaims any obligation to update the forward-looking information in the future.

For more information, please contact:

Kevin Theiss / Dixon Chen
Grayling
Tel: +1-646-284-9409
Email: kevin.theiss@grayling.com
dixon.chen@grayling.com

-- tables follow --

CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED INCOME STATEMENTS

For the quarter ended September 30, 2011 and 2010

(RMB and US$ amounts expressed in thousands, except per share data)








30 September 2011


30 September 2010


RMB '000

US$ '000


RMB '000

US$ '000

Revenue, net

3,448,254

542,613


3,332,490

524,397

Cost of goods sold

2,757,258

433,879


2,563,167

403,337

Gross profit

690,996

108,734


769,323

121,060

Other expenses/(income)

25,927

4,080


(36,533)

(5,749)

Research & development costs

83,458

13,133


95,705

15,060

Selling, general and administrative expenses

414,673

65,252


355,453

55,934

Operating profit

166,938

26,269


354,698

55,815

Finance cost

24,807

3,904


21,011

3,306

Share of profit of associates

(353)

(56)


(258)

(41)

Share of loss/(profit) of joint ventures

9,916

1,560


(1,104)

(174)

Profit before tax from continuing operations

132,568

20,861


335,049

52,724

Income tax expense

31,456

4,950


51,357

8,081

Profit for the period from continuing operations

101,112

15,911


283,692

44,643

Loss/(profit) from discontinued operations

483

76


(2,179)

(343)

Profit for the period

100,629

15,835


285,871

44,986

Attributable to:






Owners of the Parent

63,641

10,015


217,484

34,224

Non-controlling interests

36,988

5,820


68,387

10,762


100,629

15,835


285,871

44,986

Net earnings per common share

1.71

0.27


5.84

0.92



CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED INCOME STATEMENTS

For the nine months ended September 30, 2011 and 2010

(RMB and US$ amounts expressed in thousands, except per share data)








30 September 2011


30 September 2010


RMB '000

US$ '000


RMB '000

US$ '000

Revenue, net

11,697,838

1,840,759


12,418,092

1,954,097

Cost of goods sold

9,291,595

1,462,115


9,728,471

1,530,861

Gross profit

2,406,243

378,644


2,689,621

423,236

Other income

(14,784)

(2,326)


(72,285)

(11,375)

Research & development costs

243,420

38,304


245,911

38,696

Selling, general and administrative expenses

1,291,951

203,300


1,361,457

214,237

Operating profit

885,656

139,366


1,154,538

181,678

Finance cost

100,149

15,759


97,571

15,354

Share of profit of associates

(1,325)

(208)


(61)

(10)

Share of loss of joint ventures

36,937

5,812


6,513

1,025

Profit before tax from continuing operations

749,895

118,003


1,050,515

165,309

Income tax expense

140,513

22,111


167,918

26,423

Profit for the period from continuing operations

609,382

95,892


882,597

138,886

Loss/(profit) from discontinued operations

483

76


(2,179)

(343)

Profit for the period

608,899

95,816


884,776

139,229

Attributable to:






Owners of the Parent

449,238

70,692


668,372

105,175

Non-controlling interests

159,661

25,124


216,404

34,054


608,899

95,816


884,776

139,229

Net earnings per common share

12.05

1.90


17.93

2.82



CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(RMB and US$ amounts are expressed in thousands)






As of December
31, 2010

As of September 30, 2011


RMB '000

RMB '000

US$ '000


(audited)

(unaudited)

(unaudited)





Cash and cash equivalents

4,060,990

2,583,096

406,473

Trade and bills receivable, net

4,234,475

8,335,725

1,311,700

Inventories, net

2,632,860

2,199,163

346,058

Other current assets

452,578

737,765

116,094

Current assets

11,380,903

13,855,749

2,180,325





Property, plant and equipment

3,276,302

3,438,696

541,109

Prepaid operating leases

407,468

392,203

61,717

Goodwill

212,636

212,636

33,460

Investment in associates and joint ventures

552,923

536,712

84,456

Other non-current assets

416,031

320,781

50,478

Non-current assets

4,865,360

4,901,028

771,220





Total assets

16,246,263

18,756,777

2,951,545





Trade and bills payable

5,699,334

5,882,222

925,620

Interest bearing loans and borrowings

423,543

2,585,577

406,863

Other current liabilities

2,769,730

2,851,677

448,737

Current liabilities

8,892,607

11,319,476

1,781,220





Interest bearing loans and borrowings

201,850

144,951

22,809

Deferred grants

269,736

331,025

52,090

Other non-current liabilities

96,143

78,091

12,289

Non-current liabilities

567,729

554,067

87,188





Total liabilities

9,460,336

11,873,543

1,868,408





Equity attributable to owners of the Parent

5,097,947

5,171,013

813,705

Non-controlling interests

1,687,980

1,712,221

269,432





Total equity

6,785,927

6,883,234

1,083,137





Total equity and liabilities

16,246,263

18,756,777

2,951,545



Source: China Yuchai International Limited
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