omniture

Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2020

-Teleconference to be Held on Friday, September 4, 2020 at 9:00 am ET-
2020-09-04 04:15 24168

BEIJING, Sept. 4, 2020 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the second quarter of 2020 ended June 30, 2020.

Second Quarter 2020 Financial Highlights

  • Net sales during the second quarter ended June 30, 2020 were RMB82.9 million (US$11.7 million), compared to RMB88.1 million during the same period in 2019.
  • Sales of specialty films were RMB48.1 million (US$6.8 million) or 58.0% of our total revenues as compared to RMB42.0 million or 47.6% in the same period of 2019, which was an increase of RMB6.1 million, or 14.5% year-over-year.
  • Overseas sales were RMB7.5 million (US$1.1 million), or 9.1% of total revenues, compared with RMB14.3 million in the second quarter of 2019.
  • Gross profit was RMB34.4 million (US$4.9 million) for the second quarter ended June 30, 2020, representing a gross profit rate of 41.6%, as compared to a gross profit rate of 21.1% for the same period in 2019.
  • Net profit attributable to the Company was RMB14.1 million (US$2.0 million) while net profit attributable to the Company was RMB1.0 million during the same period in 2019.

First Six Months 2020 Financial Highlights

  • Net sales were RMB166.1 million (US$23.5 million), compared to RMB169.2 million in the same period in 2019.
  • Sales of specialty films were RMB88.0 million (US$12.5 million) or 53.0% of our total revenues as compared to RMB74.2 million or 43.8% in the same period of 2019, which was an increase of RMB13.8 million, or 18.6% year-over-year.
  • Overseas sales were RMB13.3 million or US$1.9 million, or 8.0% of total revenues.
  • Gross profit was RMB64.2 million (US$9.1 million), representing a gross margin rate of 38.7%, as compared to a gross margin rate of 18.3% for the same period in 2019.
  • Net profit attributable to the Company was RMB27.0 million (US$3.8 million) while net loss attributable to the Company was RMB2.4 million during the same period in 2019.

Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant and adverse effects on the global economy, we achieved positive trends in  our mix of sales, especially sales of specialty films which accounted for 58% of our total revenues. In addition, we achieved net profit for five consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions."

Second Quarter 2020 Results

Net sales during the second quarter ended June 30, 2020 were RMB82.9 million (US$11.7 million), compared to RMB88.1 million during the same period in 2019. The decrease of average sales price caused a decrease of RMB3.6 million and lower sales volume caused a decrease of RMB1.6 million.

In the second quarter of 2020, sales of specialty films were RMB48.1 million (US$6.8 million) or 58.0% of our total revenues as compared to RMB42.0 million or 47.6% in the same period of 2019, which was an increase of RMB6.1 million, or 14.5% year-over-year. The increase of sales volume caused an increase of RMB8.9 million and the decrease in the average sales price caused a decrease of RMB2.8 million.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):


Three-Month Period
Ended
 June 30, 2020

% of
Total


Three-Month Period
Ended
June 30, 2019

% of
Total


RMB

US$



RMB


Stamping and transfer film

25,885

3,665

31.3%


28,596

32.4%

Printing film

5,746

813

6.9%


8,512

9.7%

Metallization film

1,159

164

1.4%


1,938

2.2%

Specialty film

48,088

6,806

58.0%


41,958

47.6%

Base film for other
application

1,978

280

2.4%


7,113

8.1%









82,856

11,728

100.0%


88,117

100.0%

Overseas sales were RMB7.5 million or US$1.1 million, or 9.1% of total revenues, compared with RMB14.3 million or 16.3% of total revenues in the second quarter of 2019. The increase of average sales price caused an increase of RMB0.5 million and the decrease in sales volume resulted in a decrease of RMB7.3 million.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):



Three-Month Period
Ended
June 30, 2020

% of Total

Three-Month Period
Ended
June 30, 2019

% of Total



RMB

US$


RMB


Sales in China


75,334

10,663

90.9%

73,777

83.7%

Sales in other countries


7,522

1,065

9.1%

14,340

16.3%










82,856

11,728

100.0%

88,117

100.0%

Gross profit was RMB34.4 million (US$4.9 million) for the second quarter ended June 30, 2020, representing a gross profit rate of 41.6%, as compared to a gross profit rate of 21.1% for the same period in 2019. Correspondingly, gross profit rate increased by 20.5 percentage point compared to the same period in 2019. Our average product sales prices decreased by 4.2% compared to the same period last year while the average cost of goods sold decreased by 29.0% due to the decrease in raw materials cost. Consequently, it resulted in an increase in our gross profit.

Operating expenses for the second quarter ended June 30, 2020 were RMB18.7 million (US$2.7 million), as compared to RMB15.0 million for the same period in 2019. The increase was mainly due to the change of accounting estimate which caused the increase of accrual depreciation of the third production line. 

Net profit attributable to the Company during the second quarter ended June 30, 2020 was RMB14.1 million (US$2.0 million) while net profit attributable to the Company was RMB1.0 million during the same period in 2019.

Financial Results for the Six Months Ended June 30, 2020

Net sales during the six-month period ended June 30, 2020 were RMB166.1 million (US$23.5 million), compared to RMB169.2 million in the same period in 2019. The increase in average sales price caused an increase of RMB0.7 million and the decrease in the sales volume caused a decrease of RMB3.8 million.

In the six-month period ended June 30, 2020, sales of specialty films were RMB88.0 million (US$12.5 million) or 53.0% of our total revenues as compared to RMB74.2 million or 43.8% in the same period of 2019, which was an increase of RMB13.8 million, or 18.6% year-over-year. The increase in sales volume caused an increase of RMB17.7 million and the decrease in the average sales price caused a decrease of RMB3.9 million.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):


Six-Month Period
Ended
 June 30, 2020

% of
Total


Six-Month Period
Ended
June 30, 2019

% of
Total


RMB

US$



RMB


Stamping and transfer film

60,406

8,548

36.3%


60,123

35.6%

Printing film

11,591

1,641

7.0%


20,732

12.3%

Metallization film

2,661

377

1.6%


2,614

1.5%

Specialty film

87,965

12,451

53.0%


74,154

43.8%

Base film for other
application

3,466

491

2.1%


11,568

6.8%









166,089

23,508

100.0%


169,191

100.0%

Overseas sales during the six months ended June 30, 2020 were RMB13.3 million (US$1.9 million), or 8.0% of total revenues, compared with RMB30.6 million or 18.1% of total revenues in the same period in 2019. The decrease in sales volume resulted in a decrease of RMB18.2 million and was mainly due to the antidumping measures while higher average sales price caused an increase of RMB0.9 million.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):



Six-Month Period
Ended
 June 30, 2020

% of Total

Six-Month Period
Ended
June 30, 2019

% of Total



RMB

US$


RMB


Sales in China


152,783

21,625

92.0%

138,631

81.9%

Sales in other countries


13,306

1,883

8.0%

30,560

18.1%










166,089

23,508

100.0%

169,191

100.0%

Our gross profit was RMB64.2 million (US$9.1 million) for the first six months ended June 30, 2020, representing a gross margin rate of 38.7%, as compared to a gross margin rate of 18.3% for the same period in 2019. Correspondingly, gross margin rate increased by 20.4 percentage points. Our average product sales prices increased by 0.4% compared to the same period last year while the average cost of goods sold decreased by 24.6%. Consequently, it resulted in an increase in our gross margin.

Operating expenses for the six months ended June 30, 2020 were RMB33.8 million (US$4.8 million), compared to RMB28.5 million in the same period in 2019. This increase was mainly due to the change of accounting estimate which caused the increase of accrual depreciation of the third production line.

Net income attributable to the Company during the first half of 2020 was RMB27.0 million (US$3.8 million) compared to net loss attributable to the Company of RMB2.4 million during the same period in 2019, representing an increase of RMB29.4 million from the same period in 2019 due to the factors described above.

Cash, cash equivalent and restricted cash totaled RMB81.3 million (US$11.5 million) as of June 30, 2020. Total shareholders' equity was RMB235.2 million (US$33.3 million).

As of June 30, 2020, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, September 4, 2020, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 36765. The replay will be available until September 18, 2020.

About Fuwei Films

Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.

Safe Harbor

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the uncertainty of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.

For more information, please contact:

In China:

Ms. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:

Shiwei Yin
Investor Relations
Grayling
Phone: +1-646-284-9474
Email: shiwei.yin@grayling.com

 

 

 

Financial Tables to Follow

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2020 AND DECEMBER 31, 2019

(amounts in thousands except share and per share value)

(Unaudited)




June 30, 2020


December 31, 2019


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


76,318

10,802


60,871

Restricted cash


5,000

708


25,500

Accounts and bills receivable, net


41,829

5,921


26,960

Inventories


26,107

3,695


23,584

Advance to suppliers


8,852

1,253


6,277

Prepayments and other receivables


1,156

164


1,058

Deferred tax assets - current


1,290

183


1,266

Total current assets


160,552

22,726


145,516







Property, plant and equipment, net


285,888

40,465


302,642

Construction in progress


999

141


-

Lease prepayments, net


15,485

2,192


15,762

Advance to suppliers - long term, net


1,542

218


1,542

Deferred tax assets - non current


439

62


509







Total assets


464,905

65,804


465,971







LIABILITIES AND EQUITY

Current liabilities






Short-term borrowings


65,000

9,200


65,000

Due to related parties


-

-


119,297

Accounts payables


20,711

2,931


19,532

Notes payable


10,000

1,415


41,000

Advance from customers


4,411

624


5,204

Accrued expenses and other payables

127,414

18,034


5,454

Total current liabilities


227,536

32,204


255,487







Deferred tax liabilities


2,163

306


2,290







Total liabilities


229,699

32,510


257,777







Equity






Shareholders' equity






Registered capital (of US$0.519008 par value; 5,000,000 shares
authorized; 3,265,837 issued and outstanding)


13,323

1,886


13,323

Additional paid-in capital


311,907

44,148


311,907

Statutory reserve


37,441

5,299


37,441

Accumulated deficit


(128,305)

(18,160)


(155,317)

Cumulative translation adjustment


840

121


840

Total shareholders' equity


235,206

33,294


208,194

Total equity


235,206

33,294


208,194

Total liabilities and equity


464,905

65,804


465,971

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(amounts in thousands except share and per share value)

(Unaudited)








The Three-Month Period Ended June 30,


The Six-Month Period Ended June 30, 



2020


2019


2020


2019


RMB

US$


RMB


RMB

US$


RMB

Net sales


82,856

11,728


88,117


166,089

23,508


169,191

Cost of sales


48,421

6,854


69,488


101,895

14,422


138,158












Gross profit


34,435

4,874


18,629


64,194

9,086


31,033












Operating expenses











Selling expenses


3,372

477


3,537


7,458

1,056


6,501

Administrative expenses


15,368

2,175


11,453


26,323

3,726


22,030

Total operating
expenses


18,740

2,652


14,990


33,781

4,782


28,531












Operating income 


15,695

2,222


3,639


30,413

4,304


2,502












Other income (expense)











- Interest income


567

80


202


857

121


416

- Interest expense


(2,241)

(317)


(2,244)


(4,457)

(631)


(4,435)

- Others income
(expense), net


49

7


(630)


118

17


(872)

Total other expenses


(1,625)

(230)


(2,672)


(3,482)

(493)


(4,891)












Income(loss) before
provision for income
taxes


14,070

1,992


967


26,931

3,811


(2,389)

Income tax benefit
(expense)


(13)

(2)


(16)


81

11


(33)












Net income (loss)


14,057

1,990


951


27,012

3,822


(2,422)












Net income (loss)
attributable to
non-controlling interests


-

-


-


-

-


-

Net income (loss)
attributable to the
Company


14,057

1,990


951


27,012

3,822


(2,422)

Other comprehensive
income (loss)











- Foreign currency
translation adjustments
attributable to
non-controlling interest


-

-


-


-

-


-

- Foreign currency
translation adjustments
attributable to the
Company


-

-


-


-

-


(1)












Comprehensive loss
attributable to
non-controlling interest


-

-


-


-

-


-

Comprehensive income(loss )
attributable to the
Company


14,057

1,990


951


27,012

3,822


(2,423)












Earnings (loss) per
share,
Basic and diluted


4.30

0.61


0.29


8.27

1.17


(0.74)

Weighted average
number ordinary shares,
Basic and diluted


3,265,837

3,265,837


3,265,837


3,265,837

3,265,837


3,265,837













 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(amounts in thousands except share and per share value)

(Unaudited)




The Six-Month Period Ended June 30, 



2020


2019



RMB

US$


RMB

Cash flow from operating activities






Net income (loss)


27,012

3,822


(2,422)

Adjustments to reconcile net loss to net cash






used in operating activities












- Depreciation of property, plant and equipment


17,986

2,546


23,892

- Amortization of intangible assets


267

38


267

- Deferred income taxes


(81)

(11)


33

- Bad debt recovery


160

23


(903)

-Inventory provision


-

-


724

Changes in operating assets and liabilities 






- Accounts and bills receivable


(15,026)

(2,127)


(222)

- Inventories


(2,523)

(357)


(323)

- Advance to suppliers


(2,497)

(353)


794

- Prepaid expenses and other current assets


(87)

(12)


(116)

- Accounts payable


1,176

168


1,692

- Accrued expenses and other payables


210

30


319

- Advance from customers


(793)

(112)


2,203

- Tax payable


65

9


(212)







Net cash provided by (used in) operating activities


25,869

3,664


25,726







Cash flow from investing activities






Purchases of property, plant and equipment


(1,232)

(174)


(3,574)

Restricted cash related to trade finance


-

-


-

Advanced to suppliers - non current


-

-


-

Amount change in construction in progress


(999)

(141)


83







Net cash provided by (used in) investing activities


(2,231)

(315)


(3,491)







Cash flow from financing activities






Principal payments of bank loans


-

-


-

Proceeds from (payment to) short-term bank loans


-

-


-

Proceeds from (payment to) related party


2,309

327


2,296

Change in notes payable


(31,000)

(4,388)


1,980













Net cash (used in) provided by financing activities


(28,691)

(4,061)


4,276







Effect of foreign exchange rate changes


-

(185)


-







Net increase in cash and cash equivalent


(5,053)

(897)


26,511







Cash and cash equivalent






At beginning of period


86,371

12,407


46,908

At end of period


81,318

11,510


73,419







SUPPLEMENTARY DISCLOSURE:






Interest paid


4,457

631


4,435







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


1,010

143


1,010

 

 

Cision View original content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-second-quarter-of-2020-301123088.html

Source: Fuwei Films (Holdings) Co., Ltd.
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