omniture

China Ceramics Announces Second Quarter 2010 Financial Results

2010-08-16 15:07 1344
    JINJIANG, Fujian, China, Aug. 16 /PRNewswire-Asia-FirstCall/ -- China Ceramics Co., Ltd. (OTC Bulletin Board: CCLTF, CCLWF, CCLUF) ("China Ceramics" or the "Company"), a leading Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings, today announced financial results for the second quarter ended June 30, 2010. 

    Second Quarter 2010 Highlights
    -- Revenue was RMB 272.3 million (US$ 39.8 million), up 18.9% from the 
       first quarter of 2010 and up 29.5% from the second quarter of 2009;
    -- Gross profit was RMB 84.8 million (US$ 12.4 million), up 22.4% from the 
       first quarter of 2010 and up 40.6% from the second quarter of 2009;
    -- Gross profit margin was 31.2%, compared to 30.2% in the first quarter 
       of 2010 and 28.7% in the second quarter of 2009;
    -- Net profit was RMB 56.5 million (US$ 8.3 million), up 24.8% from the 
       first quarter of 2010 and up 31.2% from the second quarter of 2009; 
    -- Earnings per fully diluted share were RMB 5.55 (US$ 0.81).

    Six Months 2010 Highlights
    -- Revenue was RMB 501.4 million (US$ 73.4 million), up 31.9% from the 
       same period of 2009;
    -- Gross profit was RMB 154.1 million (US$ 22.5 million), up 44.9% from 
       the same period of 2009;
    -- Gross profit margin was 30.7%, compared to 28.0% in the same period of 
       2009;
    -- Net profit was RMB 101.7 million (US$ 14.9 million), up 37.1% from the 
       same period of 2009; 
    -- Earnings per fully diluted share were RMB 10.01 (US$ 1.46).

    Second quarter 2010 Results
    Revenue for the second quarter ended June 30, 2010 increased by 18.9% to RMB 272.3 million (US$ 39.8 million) compared to the first quarter ended March 31, 2010, and increased by 29.5% compared to the second quarter ended June 30, 2009. The sequential increase in revenue from the first quarter of 2010 was mainly driven by higher sales volume. The year-over-year increase in revenue was primarily driven by a 21.8% increase in volume from 8.7 million square meters to 10.6 million square meters in the second quarter of 2010 compared with the same period in 2009, as well as a 5.9% increase in average selling prices as a result of price increases in the second half of 2009. The growth in volume was mainly due to production capacity contributed by the Gaoan plant acquisition in January 2010. The Gaoan facility accounted for 26.7% of production volume in the quarter. In addition, outsourced manufacturing accounted for 18.3% of production volume in the quarter.
    Gross profit was RMB 84.8 million (US$ 12.4 million), up 22.4% from RMB 69.3 million in the first quarter ended March 31, 2010, and up 40.6% from RMB 60.3 million for the quarter ended June 30, 2009. Gross margin was 31.2% compared to 30.2% in the first quarter of 2010 and 28.7% for the same period last year.  The sequential increase in gross profit was driven by the increase in sales volume, and the year-over-year increase in gross profit was mostly driven by the increase in sales volume and average selling prices. 
    Administrative expenses were RMB 6.0 million (US$ 0.9 million), up 3.3% from RMB 5.8 million in the first quarter of 2010, and up 164.8% from RMB 2.3 million in the second quarter of 2009. The year-over-year increase in administrative expenses resulted mainly from depreciation and amortization incurred at the newly acquired Gaoan facility as well as from legal and other expenses related to China Ceramics' status as a public company.
    Finance costs were RMB 1.5 million (US$ 0.2 million), compared to RMB 1.5 million in the first quarter of 2010, and up 650.0% from RMB 0.2 million in the second quarter of 2009. The year-over-year increase in finance costs resulted from the loans assumed in connection with the acquisition of the Gaoan facility.
    Profit from operations for the second quarter ended June 30, 2010 was RMB 77.6 million (US$ 11.4 million), up 25.1% from RMB 62.0 million in the first quarter of 2010, and up 34.7% from RMB 57.6 million in the second quarter of 2009. The sequential increase in operating profit resulted from higher gross profit. The year-over-year increase in profit from operations was the result of higher revenue and improved gross margin, partially offset by higher operating costs. 
    Net profit for the second quarter ended June 30, 2010 was RMB 56.5 million (US$ 8.3 million), up 31.2% from the comparable period in 2009. Net profit for the second quarter ended June 30, 2010 was up 24.8% compared to the first quarter of 2010. The sequential increase in net profit was mainly driven by higher revenue and improved gross margin. The year-over-year increase in net profit was mainly driven by strong growth in revenue and improved gross margin resulting from higher efficiency of the new plant as well as lower raw material costs. 
    Earnings per fully diluted share were RMB 5.55 (US$ 0.81) for the second quarter of 2010, up 24.7% from RMB 4.45 (US$ 0.65) in the first quarter of 2010, and down 25.9% from RMB 7.5 (US$ 1.10) in the same period in 2009. 

    Six Months 2010 Results
    Revenue for the six months ended June 30, 2010 increased by 31.9% to RMB 501.4 million (US$ 73.4 million) compared to the six months ended June 30, 2009. Gross profit was RMB 154.1 million (US$ 22.5 million), up 44.9% from RMB 106.3 million in the six months ended June 30, 2009. Gross margin was 30.7% compared to 28.0% in the same period of 2009. Selling expenses were RMB 3.0 million (US$ 0.4 million), compared to RMB 3.2 million in the same period of 2009. Administrative expenses were RMB 11.8 million (US$ 1.7 million), compared to RMB 4.8 million for the same period of 2009. Net profit for the six months ended June 30, 2010 was RMB 101.7 million (US$ 14.9 million), up 37.1% from the comparable period in 2009. Earnings per fully diluted share were RMB 10.01 (US$ 1.46) for the six months 2010, down from RMB 12.92 in the comparable period of 2009.

    Second Quarter 2010 Balance Sheet Items
    -- Cash and bank balances were RMB 68.0 million (US$ 10.0 million) as of 
       June 30, 2010, compared with RMB 131.9 million (US$ 19.3 million) as of 
       March 31, 2010 and RMB 150.1 million (US$ 22.0 million) as of December 
       31, 2009.  In the second quarter of 2010, the Company purchased new 
       kilns and production lines to replace older manufacturing equipments at 
       the Jinjiang plant. In addition, the Gaoan plant completed its phase I 
       construction, and launched the initial stage of phase II construction. 
       The capital expenditures incurred were approximately RMB 106.3 million 
       (US$ 15.6 million) in the quarter and these capital expenditures 
       resulted in a decrease in cash and bank balances; 
    -- Inventory turnover was 70 days as of June 30, 2010 compared with 73 as 
       of March 31, 2010 and 77 as of December 31, 2009;
    -- Trade receivables turnover was 109 days as of June 30, 2010 compared 
       with 109 as of March 31, 2010 and 102 days as of December 31, 2009. The 
       Company's trade receivables include a 17% value-added-tax ("VAT"), 
       whereas its reported revenue is net of VAT. Trade receivables turnover 
       excluding VAT amounts from both the numerator and denominator was 93 
       days as of June 30, 2010 compared with 93 as of March 31, 2010 and 87 
       days as of December 31, 2009.
    -- Trade payables turnover was 77 days as of June 30, 2010 compared with 
       79 as of March 31, 2010 and 69 days as of December 31, 2009. The 
       decrease in the trade payables turnover compared to the first quarter 
       of 2010 resulted from production outsourcing arrangements with the 
       Company's Original Equipment Manufacturer ("OEM") in the second quarter 
       of 2010. The use of manufacturing outsourcing was necessary to meet 
       strong demand for the Company's products which exceeded its current 
       capacity despite the additional production from the Gaoan facility 
       which already significantly increased the Company's manufacturing 
       capacity in the first quarter of 2010. 
    -- Bank borrowings (both short-term borrowings and long-term borrowings) 
       increased to RMB 104.7 million (US$ 15.4 million) as of June 30, 2010 
       compared to RMB 90 million (US$13.2 million) as of March 31, 2010 and 
       RMB 26.5 million (US$ 3.90 million) as of December 31, 2009, due to 
       capital expenditures to finish Phase I of the Gaoan facility expansion 
       and to install new kilns and production lines to replace older 
       manufacturing equipments at the Jinjiang plant.
    -- Capital expenditures for the Jinjiang facility are expected to be 
       approximately RMB 117.0 million (US$17.2 million) in 2010. In the six 
       months ended June 30, 2010, the Company invested RMB 32.8 million (US$ 
       4.8 million) to replace and improve older manufacturing equipment at 
       its Jinjiang facility. The enhancement of production lines is expected 
       to increase capacity at the Jinjiang facility to 32.2 million square 
       meters of ceramic tiles by the end of 2010 from 28 million square 
       meters. In the six months ended June 30, 2010 the Company invested RMB 
       30 million (US$ 4.4 million) to complete Phase I of the Gaoan facility 
       expansion. The capital expenditures for phase II of the Gaoan facility 
       expansion is expected to be approximately RMB 136.4 million (US$ 20 
       million) in 2010. The completion of phase II construction at the Gaoan 
       facility is expected to increase capacity to 24 million square meters  
       of ceramic tiles by the end of 2010. As a result China Ceramics expects 
       to have total capacity of approximately 56.2 million square meters by 
       the end of 2010 and to incur total capital expenditure of approximately 
       US$41.6 million in 2010, of which US$ 15.6 million has been spent in 
       the first half (all of which was spent in the second quarter) of 2010.

    Recent Developments
    On July 27, 2010, the Company initiated an exchange offer (the "Offer") pursuant to which holders of all 14,553,949 of the Company's outstanding warrants (the "Warrants") have the opportunity to acquire the Company's shares through a warrant for share exchange. The Company will issue one share for every four warrants tendered. The Offer was set to expire on Tuesday, August 24, 2010, at 5:00 p.m., Eastern Time, or for such additional time as is required under applicable law, but has now been extended to August 30, 2010 to insure that the Company is able to mail its first half 2010 unaudited financial results to warrant holders for their consideration in connection with the exchange offer.  The terms and conditions of the Offer are set forth in the documentation distributed to record holders of the Warrants and units of the Company. Among certain other conditions set forth in the documentation, the Offer is subject to the tender of at least 40% of the Warrants.  In connection with the Offer, warrant holders representing an aggregate of approximately 49.5% of the outstanding warrants have agreed to tender their shares in the Offer.  
    During the second quarter of 2010, China Ceramics started to sell products under a new brand "Hengdeli" or "HDL". The new brand is being used to differentiate products manufactured at the Gaoan facility and are targeted at the mid-level market of the exterior wall ceramics industry, at lower price points than the Company's existing high end products from "Hengda" or "HD" brand. The new "Hengdeli" brand represented 26.7% of the total sales in the second quarter of 2010. 

    Business Outlook 
    The Company's backlog of orders for delivery in the third quarter was at approximately RMB 312.13 million (US$ 45.8 million), representing a year-over-year growth rate of 25.4% compared to the revenue in the third quarter of 2009.  The expected sales volume in the third quarter 2010 is approximately 11.5 million square meters representing a 23.2% increase from 9.4 million square meters sold in the third quarter of 2009.

    Conference Call Information
    The Company will also host a conference call at 9:00 am EDT on Monday, August 16, 2010.   Listeners may access the call by dialing +1 (866) 672-3985 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (706) 902-4207.  The conference participant pass code is 91538461.  A replay of the conference call will be available for 14 days starting from 10:00 am ET on Tuesday, August 17, 2010.  To access the replay, dial +1 (800) 642-1687.  International callers should dial +1 (706) 645-9291. The pass code is 91538461. 
    The company has determined not to have a Q&A session at the end of the call, in light of its ongoing previously announced tender offer.

    About China Ceramics Co., Ltd
    China Ceramics Co., Ltd., formerly China Holdings Acquisition Corp., is a leading manufacturer of ceramic tiles in China.  The company's ceramic tiles are used for exterior siding, interior flooring, and design in residential and commercial buildings. China Ceramics' products, sold under the "Hengda" or "HD" and the "Hengdeli" or "HDL" brands, are available in over 2000 styles, colors and sizes combinations and are distributed through a network of exclusive distributors or directly to large property developers. For more information, please visit http://www.cceramics.com .

    Currency Convenience Translation
    The Company's financial information is stated in RMB.  The translation of RMB amounts into United States dollars in the earning release is included solely for the convenience of readers and has been made at the rate of RMB6.8086 to US$1.00, the closing rate as of June 30, 2010 published on http://www.oanda.com . Such translations should not be construed as representations that RMB amounts could be converted into US dollars at that rate or any other rate, or to be the amounts that would have been reported under IFRS.

    Safe Harbor Statement
    Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future. 
    All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended December 31, 2009 and otherwise in our SEC reports and filings, including the final prospectus for our offering.  Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov . We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

	
FINANCIAL TABLES FOLLOW


                  CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES               
             CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION          
                                (RMB in thousands)                            
                                                                         
                                                As at              As at 
                                            June 30, 2010    December 31, 2009 
    ASSETS AND LIABILITIES                                               
                                                                         
    Non-current assets                                                   
    Property, plant and equipment               362,813             64,184 
    Land use rights                              32,271                165 
    Goodwill                                      3,735                 --
                                                398,819             64,349 
                                                                         
    Current assets                                                       
    Inventories                                 152,849            114,658 
    Trade receivables                           338,120            270,840 
    Prepayments and other receivables             1,744            149,268 
    Cash and bank balances                       67,986            150,121 
                                                560,699            684,887 
                                                                         
    Current liabilities                                                  
    Trade payables                              169,770            126,251 
    Accrued liabilities and other                                        
     payables                                    63,439             74,749 
    Interest-bearing bank borrowings             69,700             26,500 
    Income tax payable                           20,472             16,639 
                                                323,381            244,139 
    Non-current liabilities                                              
    Long term borrowings                         35,000                 --
    Deferred tax liabilities                      1,139                 --
                                                 36,139                 --
                                                                         
    Net current assets                          237,318            440,748 
                                                                         
    Net assets                                  599,998            505,097 
                                                                         
    EQUITY                                                               
    Total shareholders' equity                  599,998            505,097 



                  CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES              
       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
                  (RMB in thousands, except EPS and share data)              
                                                                         
                                 Three months ended          Six months ended  
                           June 30,   March 31,  June 30,   June 30,  June 30,
                             2010        2010      2009       2010      2009 
                                                                         
    Revenue                272,304     229,110   210,336     501,413   380,247 
    Cost of Sales         (187,474)   (159,825) (150,009)   (347,299) (273,900)
    Gross profit            84,830      69,285    60,327     154,114   106,347 
    Selling and                                                          
     distribution                                                        
     expenses               (1,513)     (1,480)   (1,651)    (2,994)   (3,174)
    Administrative                                                       
     expenses               (5,976)     (5,783)   (2,257)   (11,758)   (4,832)
    Finance costs           (1,478)     (1,497)     (208)    (2,974)     (417)
    Other income               257          16     1,205        272     1,271 
    Profit before                                                        
     taxation               76,120      60,541    57,416    136,660    99,195 
    Income tax expense     (19,659)    (15,291)  (14,369)   (34,949)  (24,980)
    Net Profit for the                                                   
     period                 56,461      45,250    43,047    101,711    74,215 
    Attributable to:                                                     
    Shareholders of the                                                  
    Company                                                              
    EPS-Basic                 5.55        4.45      7.50      10.01     12,92 
    EPS-Diluted               5.55        4.45      7.50      10.01     12.92 
    Shares used in                                                       
     calculating                                                         
     basic EPS                                                            
    Basic               10,164,298  10,164,298 5,743,320 10,164,298 5,743,320 
    Diluted             10,164,298  10,164,298 5,743,320 10,164,298 5,743,320 



                  CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES              
                     SALES VOLUME AND AVERAGE SELLING PRICE 
                 
                               Three months ended          Six months ended  
                           June 30,  March 31,   June 30,  June 30,  June 30,
                            2010       2010        2009      2010       2009 
                                                                         
    Sales volume                                                         
     (square meters)    10,631,009  8,798,307  8,692,665 19,429,316 15,658,599 
    Average Selling                                                      
     Price (in                                                           
    RMB/square meter)         25.6       26.0       24.2       25.8      24.3 
    Average Selling                                                      
     Price (in                                                           
     USD/square meter)         3.7        3.8        3.5        3.8       3.6 




                  CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES              
        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION    
                           (U.S Dollars in thousands)  
                      
                                                                   As at 
                                                              June 30, 2010 
    ASSETS AND LIABILITIES                                               
                                                                         
    Non-current assets                                                   
    Property, plant and equipment                                   53,287 
    Land use rights                                                  4,740 
    Goodwill                                                           549 
                                                                    58,576 
                                                                         
    Current assets                                                       
    Inventories                                                     22,449 
    Trade receivables                                               49,661 
    Prepayments and other receivables                                  256 
    Cash and bank balances                                           9,985 
                                                                    82,351 
                                                                         
    Current liabilities                                                  
    Trade payables                                                  24,935 
    Accrued liabilities and other                                        
     payables                                                        9,317 
    Interest-bearing bank borrowings                                10,237 
    Income tax payable                                               3,007 
                                                                    47,496 
    Non-current liabilities                                              
    Long term borrowings                                             5,141 
    Deferred tax liabilities                                           167 
                                                                     5,308 
                                                                         
    Net current assets                                              34,855 
                                                                         
    Net assets                                                      88,123 
                                                                         
    EQUITY                                                               
    Total shareholders' equity                                      88,123 
 


                  CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES              
       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
                  (USD in thousands, except EPS and share data)              
                                                                         
                                                           Three months ended        
                                                              June 30, 2010 
                                                                         
    Revenue                                                         39,847 
    Cost of Sales                                                  (27,435)
    Gross profit                                                    12,412 
    Selling and distribution expenses                                 (222)
    Administrative expenses                                           (874)
    Finance costs                                                     (216)
    Other income                                                        38 
    Profit before taxation                                          11,138 
    Income tax expense                                              (2,876)
    Net Profit for the period                                        8,262 
    Attributable to:                                                     
    Shareholders of the Company                                          
    EPS-Basic                                                         0.81 
    EPS-Diluted                                                       0.81 
    Shares used in calculating basic EPS                                 
    EPS-Basic                                                   10,164,298 
    EPS-Diluted                                                 10,164,298 


    For more information, please contact:

    China Ceramics Co., Ltd.						
     Edmund Hen, Chief Financial Officer				
     Email: info@cceramics.com  					

    CCG Investor Relations Inc.
     Mr. Ed Job, CFA - Account Manager
     Email: ed.job@ccgir.com

     Mr. Bryan Blake, Sr. MI Executive
     Phone: +1-646-833-3416
     Email: bryan.blake@ccgir.com

Source: China Ceramics Co., Ltd.
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