omniture

China Yuchai International Announces Unaudited Second Quarter 2011 Financial Results

SINGAPORE, August 8, 2011 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company"), announced today its unaudited consolidated financial results for the second quarter and six months ended June 30, 2011.

The financial highlights for the second quarter of 2011 are:

  • Net revenue was RMB 4.0 billion (US$ 620.7 million);
  • Total number of diesel engine units sold was 139,236 compared with 132,092 units in the second quarter of 2010;
  • The gross margin was 19.2%, down from 22.3% in the second quarter of 2010;
  • Total net profit attributable to China Yuchai's shareholders was RMB 155.1 million (US$ 24.0 million), compared with RMB 179.1 million (US$ 27.7 million) in the second quarter of 2010;
  • Earnings per share of RMB 4.16 (US$ 0.64), compared with RMB 4.81 (US$ 0.74) in the second quarter of 2010;
  • As of June 30, 2011, cash and cash equivalents were RMB 2.9 billion (US$ 452.2 million).

Net revenue for the second quarter of 2011 was RMB 4.0 billion (US$ 620.7 million), which is similar to the second quarter of 2010. Despite the general slowdown in the Chinese truck market, the total number of diesel engines sold by the Company's main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), during the second quarter of 2011 was 139,236 units compared with 132,092 units in the second quarter of 2010. This was due to increased sales of light-duty engines as well as engines for off-highway applications (mainly engines used in marine, industrial and agriculture applications).

Gross profit was RMB 771.1 million (US$ 119.2 million) compared with RMB 895.1 million (US$ 138.3 million) in the second quarter of 2010. The gross margin was 19.2% in the second quarter of 2011 as compared with 22.3% a year ago. The lower gross margin was mainly due to a change in product mix during the second quarter and an increase in material costs.

Other income increased to RMB 21.4 million (US$ 3.3 million) from RMB 17.2 million (US$ 2.7 million) in the second quarter of 2010, mainly due to currency exchange gains.

Research and development ("R&D") expenses were RMB 82.0 million (US$ 12.7 million) compared with RMB 82.9 million (US$ 12.8 million) in the second quarter of 2010. As a percentage of net revenue, R&D spending was 2.0% in the second quarter of 2011 compared with 2.1% in the same quarter last year.

Selling, general & administrative ("SG&A") expenses in the second quarter of 2011 were RMB 420.2 million (US$ 64.9 million), a reduction of RMB 78.1 million from RMB 498.3 million (US$ 77.0 million) in the second quarter of 2010. These SG&A expenses represented 10.5% of second quarter 2011 net revenue compared with 12.4% for the second quarter of 2010. The decreased expenses resulted mainly from warranty and freight charges and a write-back of doubtful debts provision.

Operating profit declined to RMB 290.2 million (US$ 44.8 million) from RMB 331.1 million (US$ 51.2 million) in the second quarter of 2010, mainly due to lower gross profit. The operating margin was 7.2% in the second quarter of 2011 compared with 8.2% in the second quarter of 2010.

In the second quarter of 2011, net profit attributable to China Yuchai's shareholders was RMB 155.1 million (US$ 24.0 million), or earnings per share of RMB 4.16 (US$ 0.64), compared with RMB 179.1 million (US$ 27.7 million), or earnings per share of RMB 4.81 (US$ 0.74), in the second quarter of 2010.

Six Months Ended June 30, 2011

For the six months ended June 30, 2011, net revenues were RMB 8.2 billion (US$ 1.3 billion) compared with RMB 9.1 billion (US$ 1.4 billion) in the first six months of 2010. The gross profit was RMB 1.7 billion (US$ 265.0 million) representing a 20.8% gross margin.

Operating profit was RMB 718.7 million (US$ 111.1 million). Selling, general and administrative expenses declined 12.8% from RMB 1.0 billion (US$ 155.5 million) in the first six months of 2010 to RMB 877.3 million (US$ 135.6 million) in the six months ended June 30, 2011.

Net profit attributable to China Yuchai's shareholders for the six months ended June 30, 2011 was RMB 385.6 million (US$ 59.6 million), or earnings per share of RMB 10.35 (US$ 1.60) versus RMB 450.9 million (US$ 69.7 million), or earnings per share of RMB 12.10 (US$ 1.87) in the same period in 2010.

As of June 30, 2011, the Company had cash and cash equivalents of RMB 2.9 billion (US$ 452.2 million) compared with total short-term and long-term interest bearing loans and borrowings of RMB 1.4 billion (US$ 221.3 million). Total equity attributable to China Yuchai's shareholders was RMB 5.1 billion (US$ 789.1 million) on June 30, 2011. The total shares issued and outstanding as of June 30, 2011 were 37,267,673 shares.

Mr. Weng Ming Hoh, Acting President and Chief Financial Officer commented, "Our success in selling a greater number of diesel engines in China during the second quarter of 2011 compared with the same quarter a year ago reflect our high-quality, advanced engines and the strength of our diversified product lines. We were able to quickly respond to changes in demand from different diesel engine market segments, providing an advantage over many of our domestic competitors. Sales of our diesel engines in both the off-highway category and our light-duty diesel engines offset lower demand in other market segments in the second quarter of 2011. The Board of Directors of GYMCL recently approved the construction of facilities at GYMCL's main plant at Yulin City, Guangxi Province, to increase the annual production capacity of marine diesel engines and power generators to meet potential demand over the next few years."

"Given the PRC government's current anti-inflationary policies and measures, interest rates have continued to rise and are expected to increase further. The Group continues to explore financing options such as the issuance of short-term financing bonds to improve our profitability, financial flexibility and to meet our working capital requirements," Mr. Hoh concluded.

Exchange Rate Information

The Company's functional currency is the U.S. dollar and its reporting currency is Renminbi. The translation of amounts from Renminbi to U.S. dollars is solely for the convenience of the reader. Translation of amounts from Renminbi to U.S. dollars has been made at the rate of RMB 6.4716 = US$ 1.00, the rate quoted by the People's Bank of China at the close of business on June 30, 2011. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. dollars at that rate or at any other certain rate on June 30, 2011 or at any other date.

Second Quarter 2011 Earnings Web Cast

An audio web cast for the investment community has been scheduled for 8:00 A.M. Eastern Daylight Time today, August 8, 2011. The call will be hosted by the Acting President and Chief Financial Officer, Mr. Weng Ming Hoh, who will present and discuss the financial results and business outlook of the Company, followed by a Q&A session. Mr. Qi Wei Wu, General Manager of GYMCL will be available to answer questions during the Q&A session.

The web cast can be accessed at the investor relations section of the Company's website located at http://www.cyilimited.com. Participants are requested to log into the web cast at least 5 minutes prior to the scheduled start time. The recorded web cast will be available on the website shortly after the earnings call.

About China Yuchai International

China Yuchai International Limited, through its subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the manufacture, assembly, and sale of a wide array of light-duty, medium-sized and heavy-duty diesel engines for construction equipment, trucks, buses and cars in China. GYMCL also produces diesel power generators, which are primarily used in the construction and mining industries. Through its regional sales offices and authorized customer service centers, the Company distributes its diesel engines directly to auto OEMs and retailers and provides maintenance and retrofitting services throughout China. Founded in 1951, GYMCL has established a reputable brand name, strong research and development team and significant market share in China with high-quality products and reliable after-sales support. In 2010, GYMCL sold 551,592 diesel engines and is recognised as a leading manufacturer and distributor of diesel engines in China. For more information, please visit http://www.cyilimited.com

Safe Harbor Statement

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time. The Company specifically disclaims any obligation to update the forward-looking information in the future.

For more information, please contact:


Kevin Theiss / Dixon Chen

Grayling

Tel: +1-646-284-9409

Email: kevin.theiss@grayling.com

dixon.chen@grayling.com



- tables follow --

CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED INCOME STATEMENTS

For the quarter ended June 30, 2011 and 2010

(RMB and US$ amounts expressed in thousands, except per share data)


30 June 2011


30 June 2010


RMB '000

US$ '000


RMB '000

US$ '000

Revenue, net

4,017,242

620,749


4,016,043

620,564

Cost of goods sold

3,246,139

501,598


3,120,913

482,248

Gross profit

771,103

119,151


895,130

138,316

Other income

(21,353)

(3,300)


(17,179)

(2,655)

Research & development costs

81,965

12,665


82,905

12,811

Selling, general and administrative expenses

420,245

64,937


498,258

76,991

Operating profit

290,246

44,849


331,146

51,169

Finance cost

27,976

4,323


37,569

5,805

Share of (profit)/loss of associates

(628)

(97)


245

38

Share of loss/(profit) of joint ventures

9,265

1,432


(163)

(25)

Profit before tax from continuing operations

253,633

39,191


293,495

45,351

Income tax expense

46,864

7,241


51,924

8,023

Profit for the period

206,769

31,950


241,571

37,328







Attributable to:






Owners of the Parent

155,130

23,971


179,096

27,674

Non-controlling interests

51,639

7,979


62,475

9,654


206,769

31,950


241,571

37,328







Net earnings per common share

4.16

0.64


4.81

0.74



CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED INCOME STATEMENTS

For the six months ended June 30, 2011 and 2010

(RMB and US$ amounts expressed in thousands, except per share data)


30 June 2011


30 June 2010


RMB '000

US$ '000


RMB '000

US$ '000

Revenue, net

8,249,584

1,274,736


9,085,601

1,403,919

Cost of goods sold

6,534,337

1,009,694


7,165,303

1,107,192

Gross profit

1,715,247

265,042


1,920,298

296,727

Other income

(40,711)

(6,291)


(35,752)

(5,524)

Research & development costs

159,962

24,718


150,206

23,210

Selling, general and administrative expenses

877,278

135,558


1,006,004

155,449

Operating profit

718,718

111,057


799,840

123,592

Finance cost

75,342

11,642


76,560

11,830

Share of (profit)/loss of associates

(972)

(150)


197

30

Share of loss of joint ventures

27,021

4,175


7,617

1,177

Profit before tax from continuing operations

617,327

95,390


715,466

110,555

Income tax expense

109,057

16,851


116,561

18,011

Profit for the period

508,270

78,539


598,905

92,544







Attributable to:






Owners of the Parent

385,597

59,583


450,888

69,672

Non-controlling interests

122,673

18,956


148,017

22,872


508,270

78,539


598,905

92,544







Net earnings per common share

10.35

1.60


12.10

1.87



CHINA YUCHAI INTERNATIONAL LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(RMB and US$ amounts are expressed in thousands)


As of December
31, 2010

As of June 30, 2011


RMB '000

RMB '000

US$ '000


(audited)

(unaudited)

(unaudited)

Cash and cash equivalents

4,060,990

2,926,329

452,180

Trade and bills receivable, net

4,234,475

7,365,757

1,138,166

Inventories, net

2,632,860

2,184,166

337,500

Other current assets

452,578

710,961

109,859

Current assets

11,380,903

13,187,213

2,037,705





Property, plant and equipment

3,276,302

3,355,090

518,433

Prepaid operating leases

407,468

393,295

60,772

Goodwill

212,636

212,636

32,857

Investment in associates and joint ventures

552,923

561,444

86,755

Other non-current assets

416,031

319,248

49,331

Non-current assets

4,865,360

4,841,713

748,148





Total assets

16,246,263

18,028,926

2,785,853





Trade and bills payable

5,699,334

6,411,589

990,727

Interest bearing loans and borrowings

423,543

1,211,561

187,212

Other current liabilities

2,769,730

3,018,673

466,449

Current liabilities

8,892,607

10,641,823

1,644,388





Interest bearing loans and borrowings

201,850

220,497

34,071

Deferred grants

269,736

312,511

48,290

Other non-current liabilities

96,143

78,172

12,079

Non-current liabilities

567,729

611,180

94,440





Total liabilities

9,460,336

11,253,003

1,738,828





Equity attributable to owners of the Parent

5,097,947

5,107,041

789,147

Non-controlling interests

1,687,980

1,668,882

257,878





Total equity

6,785,927

6,775,923

1,047,025





Total equity and liabilities

16,246,263

18,028,926

2,785,853



Source: China Yuchai International Limited
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