Revenue Ups 187.5% to RMB4.2 billion
Turnaround to Net Profits of RMB85.5 million
Interim Highlights
| Financial Summary |
For the 6 months ended 30 June (RMB'000) |
||
| 2017 |
2016 |
Change |
|
| Revenue |
4,208,903 |
1,464,127 |
+187.5% |
| Gross profit/(loss) |
42,761 |
(1,608) |
N/A |
| Net profit/(loss) attributable to the shareholders of the Company |
85,454 |
(37,913) |
N/A |
| Earnings/(loss) per share |
RMB0.04 |
RMB(0.02) |
N/A |
| Gross profit margin (%) |
1.0% |
(0.1)% |
N/A |
| Net profit/(loss) margin (%) |
2.0% |
(2.6)% |
N/A |
| Return on equity |
16.1% |
(10.2)% |
N/A |
HONG KONG, Sept. 1, 2017 /PRNewswire/ -- China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636.HK), announced its 2017 interim results for the 6 months ended 30 June 2017 (the "Period"). During the period, the revenue significantly increased by 187.5% to RMB4.2 billion (1H2016: RMB1.4 billion). The Company turned a gross loss of RMB1.6 million of the corresponding period of last year to a gross profit RMB42.8 million. Moreover, the Company turned a net loss of RMB37.9 in the first half of 2016 to a net profit of RMB85.5 million for the first half of 2017. Earnings per share were RMB0.04 cent.
Business Review
The significant increase in revenue was due to the surge in sales from the trading of electrolytic copper as well as recycled copper products. During the period, the sales volume of all copper products increased as a result of the increase in the demand for copper products and an increase in copper prices nearly doubled to 105,508 metric tons (1H2016: 46,314 metric tons). Besides, the average selling price also increased by RMB8,398 per ton to RMB 39,598 per ton (1H2016: RMB31,200 per ton). As a result, revenue from copper products amounted to RMB4.2 billion for the six months ended 30 June 2017, representing an increase of 189.4% from RMB1.4 billion for the six months ended 30 June 2016. During the period, revenue from sales of power transmission and distribution cables, sales of scrap materials and contract manufacturing income also recorded significant growth.
In order to take advantage of the expected recovery of the industrial metal market and to purchase raw materials for the Company's expansion, the Company underwent several fund raising activities during and subsequent to the period ended 30 June 2017, namely, an issuance of 74,074,074 new ordinary shares for HK$200 million in June 2017, and the issuance of convertible bonds with a total principal amount of HK$250 million and of HK$600 million in April and August 2017 respectively.
During the period, the Company also showed healthy and strong liquidity and financial position. The improvement in the liquidity of the Company's customers has resulted in the recovery of several long overdue trades balances. During the six months ended 30 June 2017, the receivables turnover days were 13.5 days as compared with 26.4 days for the year ended 31 December 2016. The significant improvement in receivable turnover days reflected the increase in sales from trading of copper products and shorter turnover days of which was shorter. The Group's total interest-bearing borrowings decreased by RMB107.6 million to RMB810.4 million as at 30 June 2017 (31 December 2016: RMB918.0 million) mainly due to the repayment of bank loans and other borrowings and the decrease in obligations under finance lease as the maturity of the finance lease is approaching. This has resulted in the increase in current asset of the Company and thereby improved current ratio and quick ratio of the Company as at 30 June 2017 compared with those as at 31 December 2016.
Due to the continued improvement in China's economy, commodity prices in China, especially industrial metal prices, are expected to increase in the future. Potential demand for industrial metals will also increase if the global economy continues to improve. It is reported that China is considering to prohibit the import of scrap metals next year. The new policy will be a further catalyst for the improvement of industrial metal prices if it is instigated and properly enforced.
Mr. Yu Jianqiu, Chairman of the Company, concluded, "We are delighted to see the robust growth and the turnaround of profitability of the Company after the pickup of utilization of production capacity. We are dedicated to strengthen our business in order to meet the market demand and take full advantage of further improvements in the market environment to increase profitability for our shareholders. In light of the continuous improvement of China's financial markets, we shall also continue to seek suitable acquisition opportunities to grow our business."
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About China Metal Resources Utilization Limited
China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636.HK) is a leading manufacturer in scrap copper industry. The Company has a fully integrated value chain with a production and service business model, with business consisting of scrap metal recycling, standard processing and metal deep processing products. By making use of the internet, the Company also provides a comprehensive platform combined with recycle metal information, warehouse logistics and financial services, providing services including recycled metal production, sale and related services. China Metal Resources is mainly involved in the sale of deep processed metal products and scrap metal value chain integrated services, in which deep processing metal includes the processing of recycled scrap copper, scrap aluminium, turning them into different copper and aluminium products such as copper rod, copper bar, copper wire as well as cable, wire and network cable; while scrap metal value chain integrated services include standard metal recovery processing, warehouse logistics, transaction settlement and financial services.
