omniture

China New Borun Announces Second Quarter 2016 Unaudited Financial Results

2016-08-18 04:30 2011

BEIJING, August 18, 2016 /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, 2016.

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "Despite a lower average selling price ("ASP") of edible alcohol, we exceeded our previous revenue guidance for the second quarter of 2016, driven by our better-than-expected utilization of 94%. The sharp decline in ASP, while partially negated by lower corn costs, compressed our second quarter gross margin to 8.3%."

"Demand for edible alcohol from the baijiu industry continues to gain strength for the fourth consecutive quarter, driving greater industry-wide sales volume. Also, during the second quarter, we already completed ahead of schedule our annual maintenance that historically took place in the summer, and as such, we anticipate strong utilization and solid sales volume for the third quarter of 2016," Mr. Wang concluded.

Second Quarter 2016 Quick View

  • Total revenue decreased 26.4% to RMB530.4 million ($80.0 million[1]) from RMB720.6 million in the second quarter of 2015.
  • Gross profit decreased 49.8% to RMB44.0 million ($6.6 million) from RMB87.7 million in the second quarter of 2015.
  • Net income decreased 61.0% to RMB14.9 million ($2.2 million) from RMB38.1 million in the second quarter of 2015.
  • Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.58 ($0.09) for the quarter ended June 30, 2016. Each ADS represents one of the Company's ordinary shares.

[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, 2016 were made at a rate of RMB6.6312 to USD1.00, the rate published by the People's Bank of China on June 30, 2016. 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.

Second Quarter 2016 Financial Performance

For the second quarter of 2016, revenue decreased by 26.4% year-over-year to RMB530.4 million ($80.0 million) from RMB720.6 million in the same period of 2015. The decrease in revenue was mainly due to a sharp decrease in ASP for edible alcohol and its by-products, and decline in sales from crude corn oil due to a temporary shut-down for the crude corn oil facility in Daqing.

Revenue breakdown by product lines is as follows:

  • Revenue from edible alcohol decreased by 23.8% to RMB360.9 million ($54.4 million) in the second quarter of 2016, compared to RMB473.8 million in the second quarter of 2015. The sales volume of edible alcohol in the second quarter of 2016 decreased by 9.5% year-over-year to 84,086 tons, and the average selling price of edible alcohol decreased by 15.9% year-over-year to RMB4,292 per ton.
  • Revenue from DDGS Feed decreased by 24.7% to RMB120.4 million ($18.2 million) in the second quarter of 2016, compared to RMB159.9 million in the second quarter of 2015. The sales volume of DDGS Feed in the second quarter of 2016 decreased by 2.2% year-over-year to 80,631 tons, and the average selling price decreased by 23.0% year-over-year to RMB1,493 per ton.
  • Revenue from liquid carbon dioxide increased by 3.8% to RMB5.5 million ($0.8 million) in the second quarter of 2016, compared to RMB5.3 million in the second quarter of 2015. The sales volume of liquid carbon dioxide in the second quarter of 2016 decreased by 7.5% year-over-year to 32,226 tons, and the average selling price increased by 13.4% year-over-year to RMB171 per ton.
  • Revenue from crude corn oil decreased by 61.4% to RMB18.1 million ($2.7 million) in the second quarter of 2016, compared to RMB46.9 million in the second quarter of 2015. It was mainly due to the temporary shut down for the crude corn oil facility in Daqing during the second quarter. The sales volume of crude corn oil in the second quarter of 2016 decreased by 61.1% year-over-year to 2,810 tons, and the average selling price decreased by 0.6% year-over-year to RMB6,443 per ton.
  • Revenue from chlorinated polyethylene ("CPE") decreased by 27.0% to RMB25.4 million ($3.8 million) in the second quarter of 2016, compared to RMB34.8 million in the second quarter of 2015. The sales volume of CPE in the second quarter of 2016 decreased by 23.9% year-over-year to 3,100 tons, while the average selling price decreased by 4.0% year-over-year to RMB8,205 per ton.

During the second quarter of 2016, gross profit decreased by 49.8% to RMB44.0 million ($6.6 million) from RMB87.7 million in the same period of 2015. Gross margin for the second quarter of 2016 decreased to 8.3%, from 12.2% in the same period of 2015, which was primarily due to steeper decrease in ASP of edible alcohol and its by-products than the cost of corn.

Operating income decreased by 55.9% to RMB31.9 million ($4.8 million) in the second quarter of 2016, from RMB72.3 million in the same period of 2015, primarily due to lower gross profit earned.

Selling expenses decreased by RMB0.7 million, or 35.4% to RMB1.2 million ($0.2 million) in the second quarter of 2016, from RMB1.9 million in the same period of 2015.

General and administrative expenses decreased by RMB2.6 million, or 19.2% to RMB10.9 million ($1.6 million) in the second quarter of 2016, from RMB13.5 million in the same period of 2015.

Income tax expenses in the second quarter of 2016 were RMB5.0 million ($0.7 million), representing an effective tax rate of 25.0%.

Net income decreased by 61.0% to RMB14.9 million ($2.2 million) in the second quarter of 2016, compared to RMB38.1 million in the same quarter of 2015. The decrease in net income was primarily due to the decrease in revenue and lower gross margin during the second quarter.

In the second quarter of 2016, basic and diluted earnings per share and per ADS were RMB0.58 ($0.09), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

As of June 30, 2016, cash and bank deposits totaled RMB613.9 million ($92.6 million), an increase of RMB118.3 million, compared with RMB495.6 million as of December 31, 2015. Cash flows generated from operating activities for the second quarter of 2016 were RMB204.6 million ($30.9 million), compared with cash outflow of RMB59.0 million in the second quarter of 2015.

Financial Outlook

Reflecting a lower ASP for edible alcohol and its by-products, the Company estimates that its revenue for the third quarter of 2016 will be in the range of RMB550 million ($82.9 million) to RMB600 million ($90.5 million), a decrease of approximately 9.3% to a decrease of 16.8% over the same quarter of 2016.

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 Thursday, August 18, 2016 (8:00 p.m. Beijing time on Thursday, August 18, 2016) to discuss the results and highlights from the second quarter of 2016 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: 61565842

A replay of the webcast will be accessible through June 26, 2016 on http://ir.chinanewborun.com or by dialing:

United States toll free: 1-855-452-5696
International: 61-2-8199-0299
Passcode: 61565842

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 that is 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

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS



December 31, 2015


June 30, 2016


RMB


RMB


US$

Assets






Cash

495,630,607


613,947,197


92,584,630

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

515,520,269


332,064,828


50,076,129

Held-to-maturity debt securities

107,912,111


————


————

Inventories

438,841,092


692,559,243


104,439,505

Advance to suppliers

344,998,183


538,319


81,180

Other receivables

59,032,438


86,758,385


13,083,360

Prepaid expenses

3,645,396


1,419,442


214,055

Total current assets

1,965,580,096


1,727,287,414


260,478,859

Property, plant and equipment, net

988,392,988


927,931,996


139,934,250

Land use right, net

133,292,782


131,876,494


19,887,274

Intangible assets, net

1,996,285


83,163


12,541

Deferred income tax assets

1,755,197


1,755,197


264,688

Total assets

3,091,017,348


2,788,934,264


420,577,612







Liabilities and shareholders' equity






Trade accounts payable

22,292,132


48,144,929


7,260,364

Accrued expenses and other payables

80,201,926


49,770,101


7,505,444

Income taxes payable

26,175,329


11,537,071


1,739,816

Short-term borrowings

753,200,000


762,200,000


114,941,489

Current portion of long-term borrowings

84,000,000


72,000,000


10,857,763

Bonds Payable

320,000,000


————


————

Total current liabilities

1,285,869,387


943,652,101


142,304,876

Total liabilities

1,285,869,387


943,652,101


142,304,876







Shareholders' equity






Ordinary share - (December 31, 2015 and June 30, 2016: 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


70,595,396

Retained earnings - appropriated

147,162,560


147,162,560


22,192,448

Retained earnings - unappropriated

1,190,180,107


1,230,309,595


185,533,477

Accumulated other comprehensive loss

(502,489)


(497,775)


(74,310)

Total shareholders' equity

1,805,147,961


1,845,282,163


278,272,736

Total liabilities and shareholders' equity

3,091,017,348


2,788,934,264


420,577,612


CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME



For the three-month period ended,


June 30, 2015


March 31, 2016


June 30, 2016


(RMB)


(RMB)


(RMB)


(US$)









Revenues

720,638,443


486,582,235


530,379,367


79,982,412

Cost of goods sold

632,954,711


427,070,211


486,353,803


73,343,257

Gross profit

87,683,732


59,512,024


44,025,564


6,639,155

Operating expenses:








Selling

1,866,280


1,084,968


1,206,445


181,935

General and administrative

13,506,488


12,033,658


10,910,620


1,645,346

Total operating expenses

15,372,768


13,118,626


12,117,065


1,827,281

Operating income

72,310,964


46,393,398


31,908,499


4,811,874









Other (income) expenses:








Interest income

(4,017,821)


(1,994,062)


(467,853)


(70,553)

Interest expense

24,018,082


14,310,350


12,563,890


1,894,663

Others, net

1,490,237


408,635


(25,047)


(3,777)

Total other expense (income), net

21,490,498


12,724,923


12,070,990


1,820,333

Income before income taxes

50,820,466


33,668,475


19,837,509


2,991,541

Income tax expense

12,705,116


8,417,118


4,959,378


747,885

Net income

38,115,350


25,251,357


14,878,131


2,243,656









Earnings per share:








Earnings per share:








Basic and diluted

1.48


0.98


0.58


0.09

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, 2015


June 30, 2016


RMB


RMB


US$







Revenues

1,291,563,662


1,016,961,602


153,360,116

Cost of goods sold

1,144,643,866


913,424,014


137,746,413

Gross profit

146,919,796


103,537,588


15,613,703

Operating expenses:






Selling

3,068,952


2,291,413


345,550

General and administrative

25,320,197


22,944,278


3,460,049

Total operating expenses

28,389,149


25,235,691


3,805,599

Operating income

118,530,647


78,301,897


11,808,104







Other (income) expenses:






Interest income

(6,281,210)


(2,461,915)


(371,262)

Interest expense

50,427,436


26,874,240


4,052,696

Others, net

2,515,989


383,588


57,846

Total other expense, net

46,662,215


24,795,913


3,739,280

Income before income taxes

71,868,432


53,505,984


8,068,824

Income tax expense

17,967,108


13,376,496


2,017,206

Net income

53,901,324


40,129,488


6,051,618







Earnings per share:






Basic and diluted

2.10


1.56


0.24

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-2016-unaudited-financial-results-300314897.html

Source: China New Borun Corporation
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