omniture

China New Borun Announces Second Quarter 2015 Unaudited Financial Results

2015-08-12 04:30 2399

BEIJING, August 12, 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 second quarter ended June 30, 2015.

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "We are ecstatic in being able to deliver a strong second quarter of 2015 that significantly exceeded our top line expectations. During the quarter, the baijiu industry showed improved demand, driven by the mass market; while at the same time, the number of edible alcohol producers had contracted, as many smaller and inefficient edible alcohol producers exited the industry. This enabled Borun to maintain a solid average selling price for edible alcohol at better-than-expected shipment volume, which drove strong revenue and profitability."

"We believe the improved competitive landscape and pricing for edible alcohol will likely sustain, and as we had already proactively upgraded our production facilities and conducted partial maintenance during the first quarter of 2015, we plan a shorter annual maintenance period this third quarter. With our solid market position and the improved fundamentals in the baijiu industry, we anticipate greater profits in 2015," Mr. Wang concluded.

Second Quarter 2015 Quick View

  • Total revenue increased 7.7% to RMB720.6 million ($117.9 million[1]) from RMB668.9 million in the second quarter of 2014.
  • Gross profit increased 29.8% to RMB87.7 million ($14.3 million) from RMB67.5 million in the second quarter of 2014.
  • Net income increased 81.7% to RMB38.1 million ($6.2 million) from RMB21.0 million in the second quarter of 2014.
  • Basic and diluted earnings per American Depositary Share ("ADS") were RMB1.48 ($0.24) for the quarter ended June 30, 2015. Each ADS represents one of the Company's ordinary shares.

Second Quarter 2015 Financial Performance

For the second quarter of 2015, revenue increased by 7.7% year-over-year to RMB720.6 million ($117.9 million) from RMB668.9 million in the same period of 2014. The increase in revenue was mainly attributable to higher sales volume in edible alcohol and its by-products.

Revenue breakdown by product lines is as follows:

  • Revenue from edible alcohol increased by 11.2% to RMB473.8 million ($77.5 million) in the second quarter of 2015, compared to RMB425.9 million in the second quarter of 2014. The sales volume of edible alcohol in the second quarter of 2015 increased by 11.2% year-over-year to 92,864 tons, and the average selling price of edible alcohol was unchanged at RMB5,102 per ton.
  • Revenue from DDGS Feed increased slightly by 0.1% to RMB159.9 million ($26.2 million) in the second quarter of 2015, compared to RMB159.8 million in the second quarter of 2014. The sales volume of DDGS Feed in the second quarter of 2015 increased by 11.1% year-over-year to 82,418 tons, while the average selling price decreased by 10.0% year-over-year to RMB1,940 per ton.
  • Revenue from liquid carbon dioxide decreased by 53.8% to RMB5.2 million ($0.8 million) in the second quarter of 2015, compared to RMB11.4 million in the second quarter of 2014. The sales volume of liquid carbon dioxide in the second quarter of 2015 increased by 6.4% year-over-year to 34,837 tons, while the average selling price decreased by 56.5% year-over-year to RMB151 per ton.
  • Revenue from crude corn oil decreased by 3.3% to RMB46.9 million ($7.7 million) in the second quarter of 2015, compared to RMB48.5 million in the second quarter of 2014. The sales volume of crude corn oil in the second quarter of 2015 increased by 7.2% year-over-year to 7,233 tons, while the average selling price decreased by 9.8% year-over-year to RMB6,483 per ton.
  • Revenue from chlorinated polyethylene (CPE) increased by 63.2% to RMB34.8 million ($5.7 million) in the second quarter of 2015, compared to RMB21.3 million in the second quarter of 2014. The sales volume of CPE in the second quarter of 2015 increased by 66.5% year over year to 4,075 tons, while the average selling price decreased by 2.0% to RMB8,547 per ton.

During the second quarter of 2015, gross profit increased by 29.8% to RMB87.7 million ($14.3 million) from RMB67.5 million in the same period of 2014. Gross margin for the second quarter of 2015 increased to 12.2%, from 10.1% in the same period of 2014, which was primarily attributable to the decrease in average corn cost, partly offset by the decrease in average selling price of by-products.

Operating income increased by 30.8% to RMB72.3 million ($11.8 million) in the second quarter of 2015, from RMB55.3 million in the same period of 2014, primarily attributable to higher gross profit earned.

Selling expenses increased by RMB0.4 million, or 21.6% to RMB1.9 million ($0.3 million) in the second quarter of 2015, from RMB1.5 million in the same period of 2014, which increased in line with the sales volume.

General and administrative expenses increased by RMB2.8 million, or 26.2% to RMB13.5 million ($2.2 million) in the second quarter of 2015, from RMB10.7 million in the same period of 2014.

Income tax expenses in the second quarter of 2015 were RMB12.7 million ($2.1 million), representing an effective tax rate of 25.0%.

Net income increased by 81.7% to RMB38.1 million ($6.2 million) in the second quarter of 2015, compared to RMB21.0 million in the same quarter of 2014. In the second quarter of 2015, basic and diluted earnings per share and per ADS were RMB1.48 ($0.24), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

As of June 30, 2015, cash and bank deposits of RMB496.1 million ($81.1 million) decreased by RMB334.3 million, compared with RMB830.4 million as of December 31, 2014. Cash flows used in operating activities for the second quarter of 2015 were RMB59.0 million ($9.7 million), which was mainly due to the increase in inventories.

Financial Outlook

The Company estimates that its revenue for the third quarter of 2015 will be in the range of RMB630 million ($103.0 million) to RMB670 million ($109.6 million), an increase of approximately 19.1% to 26.6% 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 Wednesday, August 12, 2015 (8:00 p.m. Beijing time on Wednesday, August 12, 2015) to discuss the results and highlights from the second 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:

93908929

A replay of the webcast will be accessible through August 20, 2015 on http://ir.chinanewborun.com or by dialing:

United States toll free:

1-855-452-5696

International:

61-2-8199-0299

Passcode

93908929

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 June 30, 2015 were made at a rate of RMB6.1136 to USD1.00, the rate published by the People's Bank of China on June 30, 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


June 30, 2015


RMB


RMB


US$

Assets






Cash

830,430,168


496,058,045


81,140,088

Restricted cash

62,370,000


20,000,000


3,271,395

Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively

531,480,981


476,548,904


77,948,983

Held-to-maturity debt securities

————


98,720,762


16,147,730

Inventories

496,754,625


756,230,968


123,696,507

Advance to suppliers

52,577,513


398,501


65,183

Other receivables

73,593,217


130,973,945


21,423,375

Prepaid expenses

4,562,333


1,881,997


307,838

Total current assets

2,051,768,837


1,980,813,122


324,001,099

Property, plant and equipment, net

1,096,055,659


1,058,919,284


173,207,158

Land use right, net

136,125,360


134,709,071


22,034,329

Intangible assets, net

5,822,528


3,909,406


639,461

Other non-current assets

5,562,810


3,649,726


596,985

Total assets

3,295,335,194


3,182,000,609


520,479,032







Liabilities and shareholders' equity






Trade accounts payable

17,055,679


13,316,381


2,178,157

Accrued expenses and other payables

86,729,443


62,302,341


10,190,777

Income taxes payable

6,205,515


16,935,689


2,770,166

Short-term borrowings

901,000,000


943,200,000


154,278,985

Current portion of long-term borrowings

24,000,000


24,000,000


3,925,674

Bonds Payable

500,000,000


320,000,000


52,342,319

Total current liabilities

1,534,990,637


1,379,754,411


225,686,078

Long-term borrowings

84,000,000


72,000,000


11,777,022

Total liabilities

1,618,990,637


1,451,754,411


237,463,100







Shareholders' equity






Ordinary share - (December 31, 2014 and June 30, 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


76,572,263

Retained earnings - appropriated

134,277,095


134,277,095


21,963,670

Retained earnings - unappropriated

1,074,210,923


1,128,112,247


184,525,034

Accumulated other comprehensive loss

(451,244)


(450,927)


(70,760)

Total shareholders' equity

1,676,344,557


1,730,246,198


283,015,932

Total liabilities and shareholders' equity

3,295,335,194


3,182,000,609


520,479,032


CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME




For the three-month period ended,


June 30,
2014


March 31,
2015


June 30,
2015


(RMB)


(RMB)


(RMB)


(US$)









Revenues

668,887,775


570,925,219


720,638,443


117,874,647

Cost of goods sold

601,348,437


511,689,155


632,954,711


103,532,241

Gross profit

67,539,338


59,236,064


87,683,732


14,342,406

Operating expenses:








Selling

1,534,527


1,202,672


1,866,280


305,267

General and administrative

10,703,722


11,813,709


13,506,488


2,209,253

Total operating expenses

12,238,249


13,016,381


15,372,768


2,514,520

Operating income

55,301,089


46,219,683


72,310,964


11,827,886









Other (income) expenses:








Interest income

(637,612)


(2,263,389)


(4,017,821)


(657,194)

Interest expense

26,695,034


26,409,354


24,018,082


3,928,632

Others, net

1,273,848


1,025,752


1,490,237


243,757

Total other expense, net

27,331,270


25,171,717


21,490,498


3,515,195

Income before income taxes

27,969,819


21,047,966


50,820,466


8,312,691

Income tax expense

6,992,455


5,261,992


12,705,116


2,078,173

Net income

20,977,364


15,785,974


38,115,350


6,234,518









Earnings per share:








Basic and diluted

0.82


0.61


1.48


0.24

Weighted average ordinary shares outstanding:








Basic and diluted

25,725,000


25,725,000


25,725,000


25,725,000









CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME




For the six-month period ended,


June 30, 2014


June 30, 2015


(RMB)


(RMB)


(US$)







Revenues

1,294,618,856


1,291,563,662


211,260,740

Cost of goods sold

1,136,596,378


1,144,643,866


187,229,107

Gross profit

158,022,478


146,919,796


24,031,633

Operating expenses:






Selling

2,749,478


3,068,952


501,988

General and administrative

21,194,588


25,320,197


4,141,618

Total operating expenses

23,944,066


28,389,149


4,643,606

Operating income

134,078,412


118,530,647


19,388,027







Other (income) expenses:






Interest income

(1,162,947)


(6,281,210)


(1,027,416)

Interest expense

52,719,992


50,427,436


8,248,403

Others, net

2,129,418


2,515,989


411,540

Total other expense, net

53,686,463


46,662,215


7,632,527

Income before income taxes

80,391,949


71,868,432


11,755,500

Income tax expense

20,097,988


17,967,108


2,938,875

Net income

60,293,961


53,901,324


8,816,625







Earnings per share:






Basic and diluted

2.34


2.10


0.34

Weighted average ordinary shares outstanding:






Basic and diluted

25,725,000


25,725,000


25,725,000







To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-new-borun-announces-second-quarter-2015-unaudited-financial-results-300126921.html

Source: China New Borun Corporation
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