BEIJING, May 22, 2015 /PRNewswire/ -- China New Borun Corporation (NYSE: BORN; "Borun" or the "Company"), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the first quarter ended March 31, 2015.
Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "We are glad that our top line beat the high end of our guidance for the first quarter, as we experienced better-than-expected demand for edible alcohol. However, the competitive landscape during the first quarter continued to be very challenging for the mid-to-low end baijiu producers, causing a sequential decline of 2.5% in average selling price ("ASP") for edible alcohol. At the same time, China government's recent move to ease import restrictions on corn caused double-digit percentage decline in the ASP of corn-based by-products.
Recognizing the challenging environment for corn processors, authorities in Heilongjiang province, including Finance Bureau, Food Bureau and Agricultural Development Bank of China, this April, jointly released guidance for subsidies to corn-processing entities with over 100,000 tons of corn capacity. As one of the largest corn processing companies in Heilongjiang province, we are qualified to participate in designated bids to not only purchase corn at favored prices but also potentially to receive RMB200 per ton of corn purchased through such bids and processed by the end of 2015. This subsidy grant coupled with our pre-purchase and storage capability should further enhance our significant cost advantages," Mr. Wang concluded.
First Quarter 2015 Quick View
First Quarter 2015 Financial Performance
For the first quarter of 2015, revenue decreased by 8.8% year-over-year to RMB570.9 million ($93.0 million) from RMB625.7 million in the same period of 2014. The decrease in revenue was mainly due to the decrease in the average selling price in edible alcohol and its by-products and lower sales volume in by-products.
Revenue breakdown by product lines is as follows:
During the first quarter of 2015, gross profit decreased by 34.5% to RMB59.2 million ($9.6 million) from RMB90.5 million in the same period of 2014. Gross margin for the first quarter of 2015 decreased to 10.4%, from 14.5% in the same period of 2014, which was primarily attributable to a decrease in average selling price of edible alcohol and its by-products.
Operating income decreased by 41.3% to RMB46.2 million ($7.5 million) in the first quarter of 2015, from RMB78.8 million in the same period of 2014, primarily due to lower gross profit earned.
Selling expenses were RMB1.2 million ($0.2 million) in the first quarter of 2015, remain stable with that in the same period of 2014.
General and administrative expenses increased by RMB1.3 million, or 12.6% to RMB11.8 million ($1.9 million) in the first quarter of 2015, from RMB10.5 million in the same period of 2014.
Income tax expenses in the first quarter of 2015 were RMB5.3 million ($0.9 million), representing an effective tax rate of 25.0%.
Net income decreased by 59.8% to RMB15.8 million ($2.6 million) in the first quarter of 2015, compared to RMB39.3 million in the same quarter of 2014. In the first quarter of 2015, basic and diluted earnings per share and per ADS were RMB0.61 ($0.10), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
As of March 31, 2015, cash and bank deposits of RMB664.6 million ($108.2 million) decreased by RMB165.8 million, compared with RMB830.4 million as of December 31, 2014. Cash flows generated from operating activities for the first quarter of 2015 were RMB14.1 million ($2.3 million), compared with cash flow used in operating of RMB332.0 million in the first quarter of 2014.
Financial Outlook
The Company estimates that its revenue for the second quarter of 2015 will be in the range of RMB620 million ($100.9 million) to RMB660 million ($107.5 million), a decrease of approximately 1.3% to a decrease of 7.3% over the same quarter of 2014.
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all 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 Friday, May 22, 2015 (8:00 p.m. Beijing time on Friday, May 22, 2015) to discuss the results and highlights from the first quarter of 2015 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: |
1-845-675-0437 |
Hong Kong Toll Free: |
800-906-601 |
Hong Kong Toll: |
852-3018-6771 |
China Toll Free: |
800-819-0121 |
China Toll Free (Mobile): |
400-620-8038 |
Conference ID: |
43241938 |
A replay of the webcast will be accessible through May 30, 2015 on http://ir.chinanewborun.com or by dialing:
United States toll free: |
1-855-452-5696 |
International: |
61-2-8199-0299 |
Passcode |
43241938 |
About China New Borun Corporation
China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE and foam insulation that are widely used in chemical industries. 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 http://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
Asia Bridge Capital Limited
Wendy Sun
Phone: +86-10-8556-9033 (China)
+1-888-870-0798 (U.S.)
Email: wendy.sun@asiabridgegroup.com
[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, 2015 were made at a rate of RMB6.1422 to USD1.00, the rate published by the People's Bank of China on March 31, 2015. 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. |
CHINA NEW BORUN CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|||||
December 31, 2014 |
March 31, 2015 |
||||
RMB |
RMB |
US$ |
|||
Assets |
|||||
Cash |
830,430,168 |
664,551,444 |
108,194,367 |
||
Restricted cash |
62,370,000 |
35,000,000 |
5,698,284 |
||
Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively |
531,480,981 |
400,888,182 |
65,267,849 |
||
Held-to-maturity debt securities |
———— |
98,933,968 |
16,107,253 |
||
Inventories |
496,754,625 |
680,248,928 |
110,750,045 |
||
Advance to suppliers |
52,577,513 |
80,252 |
13,066 |
||
Other receivables |
73,593,217 |
147,023,724 |
23,936,655 |
||
Prepaid expenses |
4,562,333 |
3,249,982 |
529,123 |
||
Total current assets |
2,051,768,837 |
2,029,976,480 |
330,496,642 |
||
Property, plant and equipment, net |
1,096,055,659 |
1,077,959,792 |
175,500,601 |
||
Land use right, net |
136,125,360 |
135,417,215 |
22,047,021 |
||
Intangible assets, net |
5,822,528 |
4,865,967 |
792,219 |
||
Other non-current assets |
5,562,810 |
4,279,085 |
696,670 |
||
Total assets |
3,295,335,194 |
3,252,498,539 |
529,533,153 |
||
Liabilities and shareholders' equity |
|||||
Trade accounts payable |
17,055,679 |
15,330,471 |
2,495,925 |
||
Accrued expenses and other payables |
86,729,443 |
61,314,379 |
9,982,478 |
||
Income taxes payable |
6,205,515 |
7,526,510 |
1,225,377 |
||
Short-term borrowings |
901,000,000 |
914,200,000 |
148,839,178 |
||
Current portion of long-term borrowings |
24,000,000 |
24,000,000 |
3,907,395 |
||
Bonds Payable |
500,000,000 |
460,000,000 |
74,891,733 |
||
Total current liabilities |
1,534,990,637 |
1,482,371,360 |
241,342,086 |
||
Long-term borrowings |
84,000,000 |
78,000,000 |
12,699,033 |
||
Total liabilities |
1,618,990,637 |
1,560,371,360 |
254,041,119 |
||
Shareholders' equity |
|||||
Ordinary share - (December 31, 2014 and March 31, 2015: 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 |
76,215,719 |
||
Retained earnings - appropriated |
134,277,095 |
134,277,095 |
21,861,401 |
||
Retained earnings - unappropriated |
1,074,210,923 |
1,089,996,897 |
177,460,339 |
||
Accumulated other comprehensive loss |
(451,244) |
(454,596) |
(71,150) |
||
Total shareholders' equity |
1,676,344,557 |
1,692,127,179 |
275,492,034 |
||
Total liabilities and shareholders' equity |
3,295,335,194 |
3,252,498,539 |
529,533,153 |
||
CHINA NEW BORUN CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||
For the three-month period ended, |
|||||||
March 31, 2014 |
December 31, 2014 |
March 31, |
|||||
(RMB) |
(RMB) |
(RMB) |
(US$) |
||||
Revenues |
625,731,081 |
610,013,951 |
570,925,219 |
92,951,258 |
|||
Cost of goods sold |
535,247,941 |
553,101,972 |
511,689,155 |
83,307,146 |
|||
Gross profit |
90,483,140 |
56,911,979 |
59,236,064 |
9,644,112 |
|||
Operating expenses: |
|||||||
Selling |
1,214,951 |
1,045,480 |
1,202,672 |
195,805 |
|||
General and administrative |
10,490,866 |
11,521,209 |
11,813,709 |
1,923,368 |
|||
Total operating expenses |
11,705,817 |
12,566,689 |
13,016,381 |
2,119,173 |
|||
Operating income |
78,777,323 |
44,345,290 |
46,219,683 |
7,524,939 |
|||
Other (income) expenses: |
|||||||
Interest income |
(525,335) |
(1,074,378) |
(2,263,389) |
(368,498) |
|||
Interest expense |
26,024,958 |
24,757,422 |
26,409,354 |
4,299,657 |
|||
Others, net |
855,570 |
3,231,807 |
1,025,752 |
167,000 |
|||
Total other expense, net |
26,355,193 |
26,914,851 |
25,171,717 |
4,098,159 |
|||
Income before income taxes |
52,422,130 |
17,430,439 |
21,047,966 |
3,426,780 |
|||
Income tax expense |
13,105,533 |
4,357,609 |
5,261,992 |
856,695 |
|||
Net income |
39,316,597 |
13,072,830 |
15,785,974 |
2,570,085 |
|||
Earnings per share: |
|||||||
Basic and diluted |
1.53 |
0.51 |
0.61 |
0.10 |
|||
Weighted average ordinary shares outstanding: |
|||||||
Basic and diluted |
25,725,000 |
25,725,000 |
25,725,000 |
25,725,000 |
|||
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