BEIJING, Aug. 21, 2014 /PRNewswire/ -- China New Borun
Corporation (NYSE: BORN; "Borun" or the "Company"), a leading
producer and distributor of corn-based edible alcohol in
China, today announced its
unaudited financial results for the second quarter of
2014.
Mr. Jinmiao Wang, Chairman and
Chief Executive Officer of Borun, commented on the results,
"Although demand and average selling price for edible alcohol were
solid in the first half of the second quarter, the market
encountered an unexpected sharp drop nation-wide in demand and
average selling price this June. As a result, even though we
recorded revenue growth at the high end of our second quarter
guidance on better-than-expected volume shipment, our gross profits
contracted year-over-year."
"Despite the challenging month of June, we continued to make
progress in ramping up our chlorinated polyethylene ("CPE") and
foam insulation businesses. During the quarter, we successfully
scaled our CPE plant to full production capacity and grew total
revenue from CPE and foam insulation by 47% sequentially to
RMB23.4 million. It is worth noting
that the new business has surpassed its gross breakeven point
during the second quarter, and therefore we anticipate incremental
positive contributions to profitability from the new business in
the months ahead," Mr. Wang concluded.
Second Quarter 2014 Quick
View
- Total revenue increased 6.4% to RMB668.9
million ($108.7 million[1])
from RMB628.5 million in the second
quarter of 2013.
- Gross profit decreased 5.4% to RMB67.5
million ($11.0 million) from
RMB71.4 million in the second quarter
of 2013.
- Net income decreased 17.8% to RMB21.0
million ($3.4 million) from
RMB25.5 million in the second quarter
of 2013.
- Basic and diluted earnings per American Depositary Share
("ADS") were RMB0.82 ($0.13) for the quarter ended June 30, 2014. Each ADS represents one of the
Company's ordinary shares.
Second Quarter 2014 Financial
Performance
For the second quarter of 2014, revenue increased by 6.4%
year-over-year to RMB668.9 million
($108.7 million) from RMB628.5 million in the same period of 2013. The
increase in revenue was mainly attributable to higher sales volume
of edible alcohol, partially offset by lower average selling
prices, as well as incremental revenue contribution from the
Company's CPE and foam insulation businesses that were introduced
in the fourth quarter of 2013.
Revenue breakdown by product lines is as follows:
- Revenue from edible alcohol increased by 4.1% to RMB425.9 million ($69.2
million) in the second quarter of 2014, compared to
RMB409.0 million in the second
quarter of 2013. Driven by higher production, the sales volume of
edible alcohol in the second quarter of 2014 increased by 6.1%
year-over-year to 83,505 tons, while the average selling price of
edible alcohol decreased by 1.9% year-over-year to RMB5,100 per ton.
- Revenue from DDGS Feed increased by 2.1% to RMB159.8 million ($26.0
million) in the second quarter of 2014, compared to
RMB156.5 million in the second
quarter of 2013. The sales volume of DDGS Feed in the second
quarter of 2014 decreased by 1.2% year-over-year to 74,155 tons,
while the average selling price increased by 3.3% year-over-year to
RMB2,155 per ton.
- Revenue from liquid carbon dioxide decreased by 17.0% to
RMB11.4 million ($1.8 million) in the second quarter of 2014
compared to RMB13.7 million in the
second quarter of 2013. The sales volume of liquid carbon dioxide
in the second quarter of 2014 decreased by 2.6% year-over-year to
32,751 tons, and the average selling price decreased by 14.8%
year-over-year to RMB347 per
ton.
- Revenue from crude corn oil decreased by 1.4% to RMB48.5 million ($7.9
million) in the second quarter of 2014 compared to
RMB49.2 million in the second quarter
of 2013. The sales volume of crude corn oil in the second quarter
of 2014 increased by 4.0% year-over-year to 6,746 tons, while the
average selling price decreased by 5.3% year-over-year to
RMB7,185 per ton.
- Revenue from CPE was RMB21.3
million ($3.5 million) in the
second quarter of 2014, and the sales volume was 2,448 tons at an
average selling price of RMB8,718 per
ton. Revenue from foam insulation was RMB2.0
million ($0.3 million) in the
second quarter of 2014, and the sales volume was 1,868 cubic meters
at an average selling price of RMB1,094 per cubic meter.
During the second quarter of 2014, gross profit decreased by
5.4% to RMB67.5 million ($11.0 million) from RMB71.4 million in the same period of 2013. Gross
margin for the second quarter of 2014 decreased to 10.1%, from
11.4% in the same period of 2013, which was primarily attributable
to a decrease in average selling price of edible alcohol, as well
as lower gross margin from the new CPE and foam insulation
businesses during its initial production ramp up.
Operating income decreased by 7.8% to RMB55.3 million ($9.0
million) in the second quarter of 2014, from RMB60.0 million in the same period of 2013,
primarily due to lower gross profit earned.
Selling expenses were RMB1.5
million ($0.2 million) in the
second quarter of 2014, which remained stable with that in the same
period of 2013.
General and administrative expenses increased by RMB0.8 million, or 8.0% to RMB 10.7 million ($1.7
million) in the second quarter of 2014, from RMB9.9 million in the same period of 2013, mainly
due to the increasing management cost for our new CPE and foam
insulation businesses.
Income tax expenses in the second quarter of 2014 were
RMB7.0 million ($1.1 million), representing an effective tax rate
of 25.0%.
Net income decreased by 17.8% to RMB21.0
million ($3.4 million) in the
second quarter of 2014, compared to RMB25.5
million in the same quarter of 2013. In the second quarter
of 2014, basic and diluted earnings per share and per ADS were
RMB0.82 ($0.13), and the Company had 25.7 million
weighted average basic and diluted shares outstanding.
As of June 30, 2014, cash and bank
deposits of RMB361.8 million
($58.8 million) decreased by
RMB159.5 million, compared with
RMB521.3 million as of December 31, 2013. Cash flows provided by
operating activities for the second quarter of 2014 were
RMB77.3 million ($12.6 million), compared with operating cash
outflow of $148.1 million in the
second quarter of 2013.
Financial Outlook
During the third quarters, the Company historically conducts an
annual maintenance of its production facilities, which requires a
temporary shut down of all production lines for edible alcohol for
approximately one month.
Reflecting the annual maintenance period this summer, and lower
average selling prices, the Company estimates that its revenue for
the third quarter of 2014 will be in the range of RMB520 million ($84.5
million) to RMB540 million ($87.8
million), an increase of approximately 0.4% to 4.2% over the
same quarter of 2013.
This guidance is based on the current market conditions and
reflects the Company's current and preliminary estimates of market
and operating conditions and customer demand, which are all subject
to change.
Conference Call
Borun's management will hold a corresponding earnings conference
call and live webcast at 8:00 a.m.
EDT on Friday, August 22, 2014
(8:00 p.m. Beijing time on Friday,
August 22, 2014) to discuss the results and highlights from
the second quarter and answer questions from investors. A webcast
of the call will be available at http://ir.chinanewborun.com.
Listeners may access the call by dialing:
United States Toll
Free:
|
1-866-519-4004
|
US
Toll/International:
|
1-845-675-0437
|
Hong Kong Toll
Free:
|
800-930-346
|
Hong Kong
Toll:
|
852-2475-0994
|
China Toll
Free:
|
800-819-0121
|
China Toll Free
(Mobile):
|
400-620-8038
|
Conference
ID:
|
85386554
|
A replay of the webcast will be accessible through August 30, 2014 on http://ir.chinanewborun.com or
by dialing:
United States toll
free:
|
1-855-452-5696
|
International:
|
61-2-8199-0299
|
Passcode
|
85386554
|
About China New Borun Corporation
China New Borun Corporation (NYSE: BORN) is a leading producer
and distributor of corn-based edible alcohol sold as an ingredient
to producers of baijiu, a popular grain-based alcoholic
beverage in China. The Company
also produces DDGS Feed, liquid carbon dioxide and crude corn oil
as by-products of edible alcohol production, and CPE and foam
insulation that are widely used in chemical industries.
China New Borun is based in
Shouguang, Shandong Province. Additional information about
the company can be found at http://www.chinanewborun.com and in
documents filed with the U.S. Securities and Exchange Commission,
which are available on the SEC's website at http://www.sec.gov.
Forward-looking Statements
All statements included in this press release, other than
statements or characterizations of historical fact, are
forward-looking statements. These forward-looking statements are
based on our current expectations, estimates and projections about
our industry, management's beliefs, and certain assumptions made by
us, all of which are subject to change. Forward-looking statements
can often be identified by words such as "anticipates," "expects,"
"intends," "plans," "predicts," "believes," "seeks," "estimates,"
"may," "will," "should," "would," "could," "potential," "continue,"
"ongoing," similar expressions, and variations or negatives of
these words. These forward-looking statements are not guarantees of
future results and are subject to risks, uncertainties and
assumptions that could cause our actual results to differ
materially and adversely from those expressed in any
forward-looking statement.
[1]
|
This press release
contains translations of certain Renminbi amounts into US dollars
at specified rates solely for the convenience of readers. Unless
otherwise noted, all translations from Renminbi to US dollars for
the period ended June 30, 2014 were made at a rate of RMB6.1528 to
USD1.00, the rate published by the People's Bank of China on June
30, 2014. China New Borun Corporation makes no representation that
the Renminbi or US dollar amounts referred to in this press release
could have been or could be converted into US dollars or Renminbi,
at any particular rate or at all.
|
Contact Information
Asia Bridge Capital Limited
Wendy Sun
Phone: +86-10-8556-9033 (China)
+1-888-870-0798 (U.S.)
Email: wendy.sun@asiabridgegroup.com
CHINA NEW BORUN
CORPORATION
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
December 31,
2013
|
|
June 30,
2014
|
|
RMB
|
|
RMB
|
|
US$
|
Assets
|
|
|
|
|
|
Cash
|
521,270,799
|
|
361,770,279
|
|
58,797,666
|
Restricted
cash
|
42,040,667
|
|
32,000,000
|
|
5,200,884
|
Trade accounts
receivable, net of allowance for doubtful accounts of nil and nil,
respectively
|
358,463,468
|
|
353,450,451
|
|
57,445,464
|
Available-for-sale
securities
|
16,783,869
|
|
—
|
|
—
|
Inventories
|
353,206,120
|
|
915,014,772
|
|
148,715,182
|
Advance to
suppliers
|
276,245,034
|
|
191,099
|
|
31,059
|
Other
receivables
|
58,510,165
|
|
114,562,500
|
|
18,619,572
|
Prepaid
expenses
|
3,773,980
|
|
2,299,637
|
|
373,755
|
Deferred income tax
assets
|
248,712
|
|
—
|
|
—
|
Total current
assets
|
1,630,542,814
|
|
1,779,288,738
|
|
289,183,582
|
Property, plant and
equipment, net
|
1,143,722,628
|
|
1,106,121,274
|
|
179,775,269
|
Land use right,
net
|
138,944,251
|
|
137,541,648
|
|
22,354,318
|
Intangible assets,
net
|
9,648,771
|
|
7,735,649
|
|
1,257,257
|
Other non-current
assets
|
10,697,712
|
|
8,130,261
|
|
1,321,392
|
Total
assets
|
2,933,556,176
|
|
3,038,817,570
|
|
493,891,818
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Trade accounts
payable
|
29,272,232
|
|
15,877,284
|
|
2,580,497
|
Accrued expenses and
other payables
|
106,574,084
|
|
66,479,333
|
|
10,804,728
|
Income taxes
payable
|
9,119,258
|
|
7,038,216
|
|
1,143,905
|
Short-term
borrowings
|
620,200,000
|
|
732,000,000
|
|
118,970,225
|
Current portion of
long-term borrowings
|
24,000,000
|
|
24,000,000
|
|
3,900,663
|
Total current
liabilities
|
789,165,574
|
|
845,394,833
|
|
137,400,018
|
Long-term
borrowings
|
48,000,000
|
|
36,000,000
|
|
5,850,995
|
Bonds
Payable
|
500,000,000
|
|
500,000,000
|
|
81,263,815
|
Total
liabilities
|
1,337,165,574
|
|
1,381,394,833
|
|
224,514,828
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary share –
(December 31, 2013 and June 30, 2014: par value of RMB0.0068259,
25,725,000 shares issued and outstanding)
|
175,596
|
|
175,596
|
|
25,725
|
Additional paid-in
capital
|
468,132,187
|
|
468,132,187
|
|
76,084,415
|
Retained earnings –
appropriated
|
126,356,029
|
|
126,356,029
|
|
20,536,346
|
Retained earnings –
unappropriated
|
1,002,921,340
|
|
1,063,215,301
|
|
172,801,863
|
Accumulated other
comprehensive loss
|
(1,194,550)
|
|
(456,376)
|
|
(71,359)
|
Total shareholders'
equity
|
1,596,390,602
|
|
1,657,422,737
|
|
269,376,990
|
Total liabilities and
shareholders' equity
|
2,933,556,176
|
|
3,038,817,570
|
|
493,891,818
|
CHINA NEW BORUN
CORPORATION
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
For the
three-month period ended,
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
2014
|
|
2013
|
2014
|
|
|
(RMB)
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
628,493,979
|
|
625,731,081
|
|
668,887,775
|
|
108,712,745
|
Cost of goods
sold
|
|
557,088,612
|
|
535,247,941
|
|
601,348,437
|
|
97,735,736
|
Gross
profit
|
|
71,405,367
|
|
90,483,140
|
|
67,539,338
|
|
10,977,009
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling
|
|
1,509,414
|
|
1,214,951
|
|
1,534,527
|
|
249,403
|
General and
administrative
|
|
9,912,973
|
|
10,490,866
|
|
10,703,722
|
|
1,739,651
|
Total operating
expenses
|
|
11,422,387
|
|
11,705,817
|
|
12,238,249
|
|
1,989,054
|
Operating
income
|
|
59,982,980
|
|
78,777,323
|
|
55,301,089
|
|
8,987,955
|
Other (income)
expenses:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
(990,007)
|
|
(525,335)
|
|
(637,612)
|
|
(103,630)
|
Interest
expense
|
|
26,418,467
|
|
26,024,958
|
|
26,695,034
|
|
4,338,681
|
Others,
net
|
|
(105,210)
|
|
855,570
|
|
1,273,848
|
|
207,035
|
Total other expense,
net
|
|
25,323,250
|
|
26,355,193
|
|
27,331,270
|
|
4,442,086
|
Income before income
taxes
|
|
34,659,730
|
|
52,422,130
|
|
27,969,819
|
|
4,545,869
|
Income tax
expense
|
|
9,142,375
|
|
13,105,533
|
|
6,992,455
|
|
1,136,467
|
Net income
|
|
25,517,355
|
|
39,316,597
|
|
20,977,364
|
|
3,409,402
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
0.99
|
|
1.53
|
|
0.82
|
|
0.13
|
Weighted average
ordinary shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
25,725,000
|
|
25,725,000
|
|
25,725,000
|
|
25,725,000
|
CHINA NEW BORUN
CORPORATION
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
|
For the
six-month period ended,
|
|
June 30,
2013
|
|
June 30,
2014
|
|
(RMB)
|
|
(RMB)
|
|
(US$)
|
|
|
|
|
|
|
Revenues
|
1,079,186,038
|
|
1,294,618,856
|
|
210,411,334
|
Cost of goods
sold
|
960,690,062
|
|
1,136,596,378
|
|
184,728,315
|
Gross
profit
|
118,495,976
|
|
158,022,478
|
|
25,683,019
|
Operating
expenses:
|
|
|
|
|
|
Selling
|
2,558,750
|
|
2,749,478
|
|
446,866
|
General and
administrative
|
19,721,770
|
|
21,194,588
|
|
3,444,706
|
Total operating
expenses
|
22,280,520
|
|
23,944,066
|
|
3,891,572
|
Operating
income
|
96,215,456
|
|
134,078,412
|
|
21,791,447
|
Other (income)
expenses:
|
|
|
|
|
|
Interest
income
|
(1,616,097)
|
|
(1,162,947)
|
|
(189,011)
|
Interest
expense
|
46,298,133
|
|
52,719,992
|
|
8,568,455
|
Others, net
|
(131,154)
|
|
2,129,418
|
|
346,089
|
Total other expense,
net
|
44,550,882
|
|
53,686,463
|
|
8,725,533
|
Income before income
taxes
|
51,664,574
|
|
80,391,949
|
|
13,065,914
|
Income tax
expense
|
13,393,586
|
|
20,097,988
|
|
3,266,478
|
Net income
|
38,270,988
|
|
60,293,961
|
|
9,799,436
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
Basic and
diluted
|
1.49
|
|
2.34
|
|
0.38
|
Weighted average
ordinary shares outstanding:
|
|
|
|
|
|
Basic and
diluted
|
25,725,000
|
|
25,725,000
|
|
25,725,000
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE China New Borun Corporation