WUHAN, China, Dec. 19, 2019 /PRNewswire/ -- Dunxin Financial Holdings Limited ("Dunxin" or the "Company") (NYSE American: DXF), a leading licensed microfinance lender serving individuals and small and medium enterprises (SMEs) in Hubei Province, China, today announced its unaudited financial results for the first six months of 2019. The unaudited consolidated financial statements and other financial information included in this press release have been prepared in conformity with International Financial Reporting Standards ("IFRS") and stated in Renminbi ("RMB") unless otherwise indicated.
First Six Months 2019 Highlights
First Six Months 2019 Financial Results
Interest Income on Loans
Interest income on loans for the first six months of 2019 increased by 49.2% to RMB75.5 million (US$11.0 million) from RMB50.6 million in the same period of the prior year. The increase was primarily attributable to the accrued interest of Stage 3 credit-impaired loans. Accrued interest is the present value of the estimated future cash flows of credit-impaired loans expected to be recovered, discounted at the loan's original effective interest rate.
Interest expense
Interest expenses on loans decreased to RMB9.8 million (US$1.4 million) for the first six months of 2019 from RMB13.6 million in the same period of the prior year. The reduction was mainly due to the decrease in average outstanding borrowings from RMB240.2 million in the first six months of 2018 to RMB203.8 million (US$29.7 million) in the first six months of 2019, which resulted in a RMB1.9 million (US$0.3 million) decrease in the Company's interest expenses on loans. Also, the effective cost of borrowings decreased from 11.3% in the first six months of 2018 to 9.6% in the first six months of 2019, which resulted in a RMB1.9 million (US$0.3 million) decrease in the Company's interest expenses on loans.
Net interest income
Net interest income for the first six months of 2019 was RMB65.5 million (US$9.5 million), representing a 78.0% increase from RMB36.8 million in the same period of the prior year.
Credit impairment losses
Credit impairment losses for the first six months of 2019 decreased from RMB11.6 million to RMB11.3 million (US$1.6 million). The credit impairment losses were provided at a similar level last year.
Operation expenses
Sales and marketing expenses for the first six months of 2019 increased to RMB0.6 million (US$0.1 million) from RMB0.5 million in the same period of the prior year. The increase was primarily attributable to the cost incurred in developing the new supply chain finance cloud platform.
General and administrative expenses increased from RMB6.7 million for the first six months of 2018 to RMB7.5 million (US$1.1 million) for the first six months of 2019. The increase was primarily attributable to the increase in certain administrative and miscellaneous expenses.
Net Profit and Earnings per ADS
Net profit was RMB34.5 million (US$5.0 million) for the first six months of 2019, as compared to RMB13.5 million in the same period of the prior year.
Earnings per ADS for the first six months of 2019 was US$0.19, compared to US$0.08 in the same period of the prior year.
Balance Sheet
As of June 30, 2019, the Company had cash and cash equivalents of RMB0.1 million (US$0.02 million) compared to RMB3.2 million as of December 31, 2018.
Loans receivable, net of credit impairment losses of RMB405.6 million (US$59.1 million), was RMB620.1 million (US$90.3 million) as of June 30, 2019, representing an increase of 7.0% from RMB579.7 million as of December 31, 2018, primarily due to the accrued interest of Stage 3 credit-impaired loans. Accrued interest is the present value of the estimated future cash flows of credit-impaired loans expected to be recovered, discounted at the loan's original effective interest rate.
Cash Flow
Net cash generated by operating activities for the first six months of 2019 was RMB2.5 million (US$0.4 million) compared to RMB12.7 million net cash used in operating activities in the same period of prior year.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
Exchange Rate Information
The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from Renminbi ("RMB") into United States dollars for the convenience of the reader were calculated at the certified exchange rate of US$1.00 = RMB6.8650 on June 30, 2019 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2019, or at any other date. The percentages stated are calculated based on RMB amounts.
About Dunxin Financial Holdings Limited
Dunxin Financial Holdings Limited ("DXF") is one of the leading licensed microfinance lenders in Hubei Province, China. We have been granted a microfinance license by the Financial Affairs Office of the Hubei Provincial People's Government to provide loans to individuals, small and medium-sized enterprises. We were awarded as the Vice President Unit of China Micro-credit Companies Association under the China Banking Regulatory Commission in January 2017 and the President Unit of Hubei Micro-credit Company Association in December 2017. In 2016, we were recognized as a "National Excellent Microfinance Company" by China Micro-credit Companies Association. We have been named one of the "Top 100 Most Competitive Microfinance Companies in China" by China Microfinance Institution Association for four consecutive years since 2013, an "AA- Credit Rating Enterprise" by China Credit Management Co., Ltd in August 2017, and a "Top 10 Private Enterprises in Wuchang District, Wuhan City" by the People's Government of Wuchang District in July 2017. The Group has a strong capital base and professional credit business experience in microfinance industry. For more information, please visit the Company's website at www.dunxin.us.
DUNXIN FINANCIAL HOLDINGS LIMITED |
||||
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||
(Expressed in Thousands of Chinese Renminbi Yuan, except per share and per ADS amounts) |
||||
For the six months ended June 30 |
||||
2018 RMB |
2019 RMB |
2019 US$ |
||
Interest income on loans |
50,606 |
75,472 |
10,994 |
|
Interest expense: |
||||
Interest expenses on loans |
(13,619) |
(9,766) |
(1,422) |
|
Business related taxes and surcharges |
(198) |
(217) |
(32) |
|
Total interest expense |
(13,817) |
(9,983) |
(1,454) |
|
Net interest income |
36,789 |
65,489 |
9,540 |
|
Credit impairment losses |
(11,606) |
(11,338) |
(1,652) |
|
Net interest income after credit impairment losses |
25,183 |
54,151 |
7,888 |
|
Non-interest and other income |
174 |
3 |
- |
|
Operating costs and expenses |
||||
Sales and marketing |
(509) |
(642) |
(94) |
|
General and administrative |
(6,720) |
(7,505) |
(1,093) |
|
Total operating costs and expenses |
(7,229) |
(8,147) |
(1,187) |
|
Profit before income taxes |
18,128 |
46,007 |
6,701 |
|
Income tax expense |
(4,580) |
(11,502) |
(1,675) |
|
Net profit |
13,548 |
34,505 |
5,026 |
|
Other comprehensive income for the period: |
||||
Exchange differences on translation of financial |
29 |
(398) |
(58) |
|
Total comprehensive income for the period |
13,577 |
34,107 |
4,968 |
|
Net profit attributable to: |
||||
Equity holders of the Company |
10,838 |
27,604 |
4,021 |
|
Non-controlling interests |
2,710 |
6,901 |
1,005 |
|
Net profit |
13,548 |
34,505 |
5,026 |
|
Total comprehensive income attributable to: |
||||
Equity holders of the Company |
10,862 |
27,286 |
3,975 |
|
Non-controlling interests |
2,715 |
6,821 |
993 |
|
Total comprehensive income |
13,577 |
34,107 |
4,968 |
|
Earnings per share - basic and diluted (in RMB) |
0.01 |
0.03 |
||
Earnings per ADS - basic and diluted (in US$) |
0.08 |
0.19 |
||
Weighted average shares outstanding in the period ('000) |
1,000,000 |
1,000,862 |
||
Weighted average ADS outstanding in the period ('000) |
20,833 |
20,851 |
||
One ADS represents 48 ordinary shares. |
||||
DUNXIN FINANCIAL HOLDINGS LIMITED |
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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
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(Expressed in Thousands of Chinese Renminbi Yuan) |
||||
As of |
||||
December 31, |
June 30, |
June 30, |
||
2018 |
2019 |
2019 |
||
RMB |
RMB |
US$ |
||
Unaudited |
Unaudited |
|||
Assets |
||||
Current assets |
||||
Cash and cash equivalents |
3,188 |
139 |
20 |
|
Interest receivables, net of credit impairment losses |
7,057 |
19,298 |
2,811 |
|
Loans receivable, net of credit impairment losses |
579,654 |
620,088 |
90,326 |
|
Prepaid expenses and others |
1,038 |
794 |
116 |
|
Total current assets |
590,937 |
640,319 |
93,273 |
|
Non-current assets |
||||
Property and equipment, net |
50,824 |
49,639 |
7,231 |
|
Intangible asset |
9 |
8 |
1 |
|
Total non-current assets |
50,833 |
49,647 |
7,232 |
|
Total assets |
641,770 |
689,966 |
100,505 |
|
Liabilities |
||||
Loans payable |
200,417 |
195,608 |
28,494 |
|
Salary and benefit payable |
1,411 |
3,228 |
470 |
|
Income taxes payable |
32,477 |
43,979 |
6,406 |
|
Interest payable |
5,139 |
10,982 |
1,600 |
|
Other payable |
35,260 |
34,200 |
4,982 |
|
Total current liabilities |
274,704 |
287,997 |
41,952 |
|
Shareholders' equity |
||||
Capital and reserve attributable to equity holders of |
||||
Share capital |
326 |
326 |
47 |
|
Additional paid-in capital |
383,174 |
383,174 |
55,816 |
|
Statutory reserve |
14,017 |
14,017 |
2,042 |
|
General risk reserve |
9,885 |
9,885 |
1,440 |
|
Foreign currency translation reserve |
(493) |
(174) |
(25) |
|
Accumulated losses |
(113,257) |
(85,652) |
(12,477) |
|
Non-controlling interests in equity |
73,414 |
80,393 |
11,710 |
|
Total shareholders' equity |
367,066 |
401,969 |
58,553 |
|
Total equity and liabilities |
641,770 |
689,966 |
100,505 |
|
DUNXIN FINANCIAL HOLDINGS LIMITED |
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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(Expressed in Thousands of Chinese Renminbi Yuan) |
||||
For the six months ended June 30, |
||||
2018 |
2019 |
2019 |
||
RMB |
RMB |
US$ |
||
Cash flows from operating activities: |
||||
Profit before income taxes |
18,128 |
46,007 |
6,701 |
|
Adjustments for: |
||||
Depreciation of property and equipment |
202 |
1,455 |
212 |
|
Amortization of intangible asset |
- |
1 |
- |
|
Credit impairment losses |
11,606 |
11,338 |
1,652 |
|
Share-based compensation |
297 |
- |
- |
|
Operating profit before working capital changes |
30,233 |
58,801 |
8,565 |
|
Interest receivables |
(14,028) |
(15,228) |
(2,218) |
|
Loan receivables |
(23,890) |
(48,785) |
(7,106) |
|
Prepaid expenses and others |
(500) |
244 |
35 |
|
Advance from customers |
(112) |
- |
- |
|
Salary and benefit payable |
(2,378) |
1,817 |
265 |
|
Interest payable |
1,450 |
5,843 |
851 |
|
Other payable |
(2,927) |
(217) |
(32) |
|
Cash (used in)/generated by operating activities |
(12,152) |
2,475 |
360 |
|
Income tax paid |
(509) |
- |
- |
|
Net cash (used in)/generated by operating activities |
(12,661) |
2,475 |
360 |
|
Cash flows from investing activities: |
||||
Purchase of property and equipment |
(18) |
(270) |
(39) |
|
Prepayment for property |
(11,654) |
- |
- |
|
Net cash used in investing activities |
(11,672) |
(270) |
(39) |
|
Cash flows from financing activities: |
||||
Proceeds received from related party loans |
- |
17,350 |
2,527 |
|
Repayment of loans to related party |
- |
(11,800) |
(1,719) |
|
Proceeds received from shareholders loans |
- |
13,000 |
1,894 |
|
Repayment of shareholders loans |
- |
(3,000) |
(437) |
|
Proceeds received from loan payable |
200,180 |
47,300 |
6,890 |
|
Repayments of loan payable |
(196,960) |
(68,502) |
(9,978) |
|
Net cash generated by/(used in) financing activities |
3,220 |
(5,652) |
(823) |
|
Net decrease in cash and cash equivalents |
(21,113) |
(3,447) |
(502) |
|
Cash and cash equivalents at beginning of the period |
21,717 |
3,188 |
464 |
|
Exchange (losses)/gains on cash and cash equivalents |
(29) |
398 |
58 |
|
Cash and cash equivalents at end of the period |
575 |
139 |
20 |
|
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