BEIJING, May 16, 2012 /PRNewswire-Asia/ -- China New Borun Corporation (NYSE: BORN; "Borun" or the "Company"), a leading producer and distributor of corn-based edible alcohol in China, today announced unaudited financial results for the first quarter of 2012.
First Quarter 2012 Quick View
Commenting on the results for the quarter, Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, stated, "Demand for edible alcohol and our by-products remained strong throughout the quarter, and we continue to operate our facilities at full capacity, making us one of the most efficient producers of edible alcohol in the country. Driven by the strong demand for edible alcohol in China and our effective capacity utilization, our first quarter revenue exceeded our previously stated guidance."
Mr. Wang added, "We are currently in an environment where higher corn prices have resulted in our cost of goods increasing at a faster rate than revenues. This has resulted in pressure on our operating profits. We view these prices as a short-to-medium term aberration and we think that they will normalize over time. In the meantime, while we cannot control the price of corn, we can operate as efficiently as possible in order to mitigate the effect of the high corn prices. Our return on assets and return on equity numbers for the past twelve months are 15.5% and 23.6%, respectively, demonstrating how we are committed to efficiency. At the same time, our business continues to generate healthy cash flows."
(1) This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the quarter ended March 31, 2012 were made at a rate of RMB6.2943 to USD1.00, the rate published by the People's Bank of China on March 31, 2012. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all. |
First Quarter 2012 Financial Performance
For the first quarter of 2012, revenue increased by 26.1% year-over-year to RMB721.2 million ($114.6 million) from RMB571.8 million in the same period of 2011. Key factors affecting the Company's results of operations are as follows:
During the first quarter of 2012, gross profit decreased by 13.6% to RMB109.9 million ($17.5 million) from RMB127.1 million in the same period of 2011. Gross margin for the first quarter of 2012 decreased to 15.2% from 22.2% in the same period of 2011, primarily due to corn cost increasing at a faster rate than selling price during the first quarter of 2012.
Operating income decreased by 15.7% to RMB94.1 million ($15.0 million) in the first quarter of 2012, from RMB111.7 million in the same period of 2011, due to the Company's strong revenue growth and offset by increased cost of goods sold.
Selling expenses were RMB1.2 million ($0.2 million) in the first quarter of 2012, which were stable compared to the same period of 2011.
General and administrative expenses were RMB14.6 million ($2.3 million) in the first quarter of 2012, which were stable compared to RMB14.3 million in the same period of 2011.
Income tax expenses in the first quarter of 2012 were RMB21.2 million ($3.4 million), representing an effective tax rate of 25.0%.
Net income decreased by 17.9% to RMB63.7 million ($10.1 million) in the first quarter of 2012, compared to RMB77.6 million in the same quarter of 2011. In the first quarter of 2012, diluted earnings per share and per ADS were RMB2.48 ($0.39), and the Company had 25.725 million weighted average diluted shares outstanding.
As of March 31, 2012, the Company had cash and bank deposits of RMB337.7 million ($53.7 million), representing an increase from RMB223.9 million as of December 31, 2011. Cash flows provided by operating activities for the quarter ended March 31, 2012 were approximately RMB56.5 million ($9.0 million), reflecting the Company's strong operating results.
Financial Outlook
The Company estimates that its revenue for the second quarter of 2012 will be in the range of RMB735.0 million ($116.8 million) to RMB755.0 million ($120.0 million), an increase of approximately 1.5% to 4.2% over the same quarter in 2011.
This forecast reflects the Company's current and preliminary view, which is subject to change.
Conference Call
Borun's management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. E.T on Wednesday, May 16, 2012 (8:00 p.m. Beijing time on Wednesday, May 16, 2012) to discuss the results and highlights from the first quarter of 2012 and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:
United States Toll Free: 1-866-519-4004
US Toll/International: 1-718-354-1231
Hong Kong Toll Free: 800-930-346
Hong Kong Toll: 852-2475-0994
China Toll Free: 800-819-0121
China Toll Free (Mobile): 400-620-8038
Conference ID: 73960905
A replay of the webcast will be accessible through May 23, 2012 on http://ir.chinanewborun.com or by dialing:
United States toll free: 1-866-214-5335
International: 1-718-354-1232
Passcode 73960905
About China New Borun Corporation
China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol in China. Borun's edible alcohol products are primarily sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage that is sold throughout China in retail stores, restaurants and bars. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at www.sec.gov.
Forward-looking Statements
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Contact Information
Three Part Advisors, LLC
John Palizza
Phone: +1-888-870-0798
Email: jpalizza@threepa.com
CHINA NEW BORUN CORPORATION | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET | |||||
December 31, 2011 |
March 31, 2012
| ||||
RMB | RMB | US$ | |||
Assets | |||||
Cash | 223,875,750 | 337,695,342 | 53,650,977 | ||
Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively | 300,023,348 | 302,203,195 | 48,012,201 | ||
Inventories | 86,205,820 | 115,734,352 | 18,387,168 | ||
Advance to suppliers | 143,742,755 | 143,807,933 | 22,847,327 | ||
Other receivables | 12,682,305 | 13,986,223 | 2,222,046 | ||
Prepaid expenses | 3,957,293 | 4,222,629 | 670,866 | ||
Total current assets | 770,487,271 | 917,649,674 | 145,790,585 | ||
Property, plant and equipment, net | 1,127,381,307 | 1,109,208,062 | 176,224,213 | ||
Land use right, net | 57,583,427 | 57,295,792 | 9,102,806 | ||
Intangible assets, net | 17,301,257 | 16,344,696 | 2,596,746 | ||
Total assets | 1,972,753,262 | 2,100,498,224 | 333,714,350 | ||
Liabilities and shareholders' equity | |||||
Trade accounts payable | 13,200,118 | 17,357,050 | 2,757,582 | ||
Accrued expenses and other payables | 86,945,695 | 93,576,260 | 14,866,826 | ||
Income taxes payable | 34,475,778 | 18,248,169 | 2,899,158 | ||
Short-term borrowings | 508,700,000 | 578,200,000 | 91,860,890 | ||
Total current liabilities | 643,321,591 | 707,381,479 | 112,384,456 | ||
Total liabilities | 643,321,591 | 707,381,479 | 112,384,456 | ||
Shareholders' equity | |||||
Ordinary share - (December 31, 2011 and March 31, 2012: par value of RMB0.0068259, 25,725,000 shares issued and outstanding) | 175,596 | 175,596 | 25,725 | ||
Additional paid-in capital | 468,132,187 | 468,132,187 | 74,373,987 | ||
Retained earnings - appropriated | 99,586,852 | 99,586,852 | 15,821,752 | ||
Retained earnings - unappropriated | 762,010,754 | 825,695,828 | 131,181,518 | ||
Accumulated other comprehensive loss | (473,718) | (473,718) | (73,088) | ||
Total shareholders' equity | 1,329,431,671 | 1,393,116,745 | 221,329,894 | ||
Total liabilities and shareholders' equity | 1,972,753,262 | 2,100,498,224 | 333,714,350 | ||
CHINA NEW BORUN CORPORATION | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
For the three-month period ended, | |||||||
March 31, 2011 | December 31, 2011 | March 31, 2012
| |||||
(RMB) | (RMB) | (RMB) | (US$) | ||||
Revenues | 571,811,302 | 762,037,367 | 721,175,850 | 114,576,021 | |||
Cost of goods sold | 444,664,817 | 641,947,866 | 611,298,467 | 97,119,373 | |||
Gross profit | 127,146,485 | 120,089,501 | 109,877,383 | 17,456,648 | |||
Operating expenses: | |||||||
Selling | 1,159,400 | 1,746,508 | 1,162,789 | 184,737 | |||
General and administrative | 14,309,065 | 13,474,509 | 14,580,533 | 2,316,466 | |||
Total operating expenses | 15,468,465 | 15,221,017 | 15,743,322 | 2,501,203 | |||
Operating income | 111,678,020 | 104,868,484 | 94,134,061 | 14,955,445 | |||
Other (income) expenses: | |||||||
Interest income | (309,197) | (373,057) | (319,400) | (50,744) | |||
Interest expense | 8,047,668 | 9,046,705 | 9,555,927 | 1,518,187 | |||
Others, net | 6,332 | (30,810) | (15,898) | (2,526) | |||
Total other expense, net | 7,744,803 | 8,642,838 | 9,220,629 | 1,464,917 | |||
Income before income taxes | 103,933,217 | 96,225,646 | 84,913,432 | 13,490,528 | |||
Income tax expense | 26,319,074 | 24,076,500 | 21,228,358 | 3,372,632 | |||
Net income | 77,614,143 | 72,149,146 | 63,685,074 | 10,117,896 | |||
Earnings per share: | |||||||
Basic and diluted | 3.02 | 2.80 | 2.48 | 0.39 | |||
Weighted average ordinary shares outstanding: | |||||||
Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | 25,725,000 | |||
