CF Energy Corp., (TSX-V: CFY) (“CF Energy” or the “Company”,
together with its subsidiaries, the “Group”), an energy provider in
the People’s Republic of China (the ”PRC” or “China”), announces
that the Company has filed its audited consolidated financial
results for the year ended December 31, 2021.
Results for the year ended December 31,
2021
In millions |
2021 |
|
2020 |
|
Change |
|
% |
|
2021 |
|
2020 |
|
Change |
|
% |
|
(except for % figures) |
RMB |
|
RMB |
|
RMB |
|
|
|
CAD |
|
CAD |
|
CAD |
|
|
|
Continuing Operations |
|
|
|
|
|
|
|
|
Revenue |
355.2 |
|
340.3 |
|
14.9 |
|
4 |
% |
69.0 |
|
66.2 |
|
2.8 |
|
4 |
% |
Gross Profit |
134.0 |
|
139.0 |
|
(5.0 |
) |
-4 |
% |
26.0 |
|
27.0 |
|
(1.0 |
) |
-4 |
% |
Gross Profit Margin |
37.7 |
% |
40.9 |
% |
-3.2 |
% |
|
37.7 |
% |
40.9 |
% |
-3.2 |
% |
|
Net Profit |
21.7 |
|
52.7 |
|
(31.0 |
) |
-59 |
% |
4.2 |
|
10.2 |
|
(6.0 |
) |
-59 |
% |
Adjusted net Profit |
25.5 |
|
38.0 |
|
(12.5 |
) |
-33 |
% |
5.0 |
|
7.3 |
|
(2.3 |
) |
-33 |
% |
EBITDA |
77.4 |
|
98.6 |
|
(21.2 |
) |
-21 |
% |
15.0 |
|
19.2 |
|
(4.1 |
) |
-21 |
% |
Adjusted EBITDA |
81.2 |
|
83.9 |
|
(2.7 |
) |
-3 |
% |
15.8 |
|
16.3 |
|
(0.5 |
) |
-3 |
% |
Revenue in 2021 was RMB355.2 million (approx.
CAD69.0 million), an increase of RMB14.9 million (approx. CAD2.8
million), or 4%, from RMB340.3 million (approx. CAD66.2 million) in
2020. With the resurgence of the outbreak of COVID-19 confirmed
cases in China around the end of July 2021, the Central Government
had re-instated certain travel restrictions which led to a drop in
demand for natural gas in Sanya City in the month of August 2021
and worsened in September 2021. Such drop in sales volume from
commercial customers and the resultant decrease in gas sales
revenue for the third quarter of 2021 had carried forward to impact
the last quarter of 2021, which eroded part of the increase of
revenue in the first half of 2021. This resulted in an overall
marginal increase in commercial customers and total revenue of gas
sales for the whole of 2021 as compared to 2020.
Gross profit in 2021 was RMB134.0 million
(approx. CAD26.0 million), a decrease of RMB5.0 million (approx.
CAD1.0 million), or 4%, from RMB139.0 million (approx. CAD27.0
million) in 2020. Gross margin in 2021 was 37.7%, a decrease of 3.2
percentage points as compared to 40.9% in 2020. Lower gross profit
and margin in 2021 were mainly attributable to the higher gross
profit margin for revenue from commercial customers in pipeline
connection which was offset by the lowering of gas selling price as
a result of further price control imposed by the Sanya government
which commenced from September 1, 2021 and the raise in purchase
price of LNG which could not be fully transferred to our customers
in Sanya CNG vehicle station.
In millions |
2021 |
|
2020 |
|
Change |
|
% |
|
2021 |
|
2020 |
|
Change |
|
% |
|
(except for % figures) |
RMB |
|
RMB |
|
RMB |
|
|
|
CAD |
|
CAD |
|
CAD |
|
|
|
Continuing Operations |
|
|
|
|
|
|
|
|
Net profit for the year |
21.7 |
|
52.7 |
|
(31.0 |
) |
-59 |
% |
4.2 |
|
10.2 |
|
(6.0 |
) |
-59 |
% |
Non-recurring items |
|
|
|
|
|
|
|
|
Fair value change on derivative financial instrument |
4.8 |
|
(11.4 |
) |
16.2 |
|
142 |
% |
0.9 |
|
(2.2 |
) |
3.1 |
|
142 |
% |
Recognition of share-based payment expenses |
0.8 |
|
1.7 |
|
(0.9 |
) |
-53 |
% |
0.2 |
|
0.3 |
|
(0.1 |
) |
-53 |
% |
Government financial assistance |
(1.8 |
) |
(5.0 |
) |
3.2 |
|
-64 |
% |
(0.3 |
) |
(1.0 |
) |
0.7 |
|
-64 |
% |
Adjusted net profit for the year (non-IFRS) |
25.5 |
|
38.0 |
|
(12.5 |
) |
-33 |
% |
5.0 |
|
7.3 |
|
(2.3 |
) |
-33 |
% |
Net profit in 2021 was RMB21.7 million (approx.
CAD4.2 million), a decrease of RMB31.0 million (approx. CAD6.0
million), or 59%, from RMB52.7 million (approx. CAD10.2 million) in
2021. Net profit in 2021 included non-recurring items. On a
comparable basis, after excluding the loss of RMB4.8 million
(approx. CAD0.9 million) in fair value change on derivative
financial instrument of loan discharge agreement in respect of the
commitment by the estate of Mr. Lin to subscribe for common shares
under a related party loan (please refer to the Related Party
Transaction section of the MD&A for more details) , share-based
payment charges of RMB0.8 million (approx. CAD0.2 million) and the
non-recurring government relief of RMB1.8 million (approx. CAD0.3
million), the Company reported a comparatively respectable adjusted
net profit of RMB25.5 million (approx. CAD5.0 million) in 2021, a
decrease of RMB12.5 million (approx. CAD2.3 million), or 33% from
that of RMB38.0 million (approx. CAD7.3 million) reported in
2020.
In millions |
2021 |
|
2020 |
|
Change |
|
% |
|
2021 |
|
2020 |
|
Change |
|
% |
|
(except for % figures) |
RMB |
|
RMB |
|
RMB |
|
|
|
CAD |
|
CAD |
|
CAD |
|
|
|
Continuing Operations |
|
|
|
|
|
|
|
|
EBITDA for the year |
77.4 |
|
98.6 |
|
(21.2 |
) |
-21 |
% |
15.0 |
|
19.2 |
|
(4.2 |
) |
-21 |
% |
Non-recurring items |
|
|
|
|
|
|
|
|
Fair value change on derivative financial instrument |
4.8 |
|
(11.4 |
) |
16.2 |
|
142 |
% |
0.9 |
|
(2.2 |
) |
3.1 |
|
142 |
% |
Recognition of share-based payment expenses |
0.8 |
|
1.7 |
|
(0.9 |
) |
-53 |
% |
0.2 |
|
0.3 |
|
(0.1 |
) |
-53 |
% |
Government financial assistance |
(1.8 |
) |
(5.0 |
) |
3.2 |
|
-64 |
% |
(0.3 |
) |
(1.0 |
) |
0.7 |
|
-64 |
% |
Adjusted EBITDA for the year |
81.2 |
|
83.9 |
|
(2.7 |
) |
-3 |
% |
15.8 |
|
16.3 |
|
(0.5 |
) |
-3 |
% |
EBITDA in 2021 was RMB77.4 million (approx.
CAD15.0 million), a decrease of RMB21.2 million (approx. CAD4.2
million), or 21% from RMB98.6 million (approx. CAD19.2 million) in
2020.
On a comparable basis, the adjusted EBITDA in
2021 was RMB81.2 million (approx. CAD15.8 million), a decrease of
RMB2.7 million (approx. CAD0.5 million), or 3%, from RMB83.9
million (approx. CAD16.3 million) in 2020.
Basic earnings per share (“EPS”) in 2021 was
RMB0.35 (CAD0.07) per share. Adjusted EPS in 2021 was RMB0.38
(CAD0.07) per share (non-IFRS).
Completion of 2021 Target
In millions |
2021 Projection |
2021 Actual |
Completed |
|
(except for % figures) |
RMB |
RMB |
% |
|
Revenue |
410.7 |
355.2 |
86.5% |
|
Gross Profit |
187.3 |
134.0 |
71.6% |
|
Projected Net Profit (Recurring)/Adjusted Net Profit |
28.9 |
25.5 |
88.4% |
|
Benchmarking against the annual target for the
2021 year, we have achieved 86.5% of the revenue, 71.6% of gross
profit and 88.4% of adjusted net profit targets set for the whole
of the 2021 year.
2021 was a major milestone year for us as we
commemorated the commencement of commercial operation of our
Haitang Bay Integrated Smart Energy Project with three hotel users
beginning to use our system and others in the pipeline committed to
tap into our system to rip the benefits of cost savings while, as
good corporate citizens, contributing towards a greener Hainan.
The Company will be making strategic and
directional changes in 2022 to drive the Company’s performance back
on track. With the new strategy and stronger, more efficient
management team, the Company will continue to strive to make
meaningful progress despite the COVID-19 pandemic and grow across
our business segments. We will continue to look for new
opportunities in the energy sector, including gas procurements,
alternative energy resources to ensure multi-dimensional growth of
the Company and further mitigate potential risks as the world
navigates through the energy and resource transition.
As part of the plan to contribute to the carbon
neutrality plan in China, the Company has started planning around
this goal and making contributions to help achieve net-zero carbon
emissions. Therefore, the Company will continue to invest in the
integrated smart energy and smart mobility business segments. For
the smart mobility segment, we have been working with local taxi
and ride-sharing companies, municipal public transportation
ministries in various cities in different provinces, and we have
signed several new agreements with some of those companies in
Haikou, Sanya and Zhuhai cities with execution targeted in 2022. In
addition, we are also exploring opportunities to expand the
electric vehicle (“EV”) battery swap service into light and heavy
trucks in China as well.
Chairman Statement
Ann Siyin Lin, CEO and Chair of the Board,
states that:
“Our revenues have taken a big hit this year as
COVID-19 loomed over the Chinese and global economy for a second
year running. In addition, the lower net profit was also caused by
the decreasing gas selling price which was regulated by the
government, even though the volume of gas sold in Sanya City
increased by 12% compared to that of 2020.
“On the smart energy front, the Haitang Bay
Integrated Smart Energy Project has commenced commercial operation
in early third quarter of 2021 as planned, and is now in
implementation stage. Three (3) of the hotels in Haitang Bay are
currently using the system and connection of two other hotels are
under construction. In 2022, we are anticipating additional hotels
will be connecting and using our system as the economy slowly
recovers. However, the growth of hotel clients will be slow since
most hotels are not operating at their normal capacities due to low
volume of visitors in Sanya, and hence their incentive to connect
to our cooling system, which is more cost-effective, is diminished.
Our EV battery swap business is still facing some difficulties in
the operating cities since most public transportation companies
have postponed their plans to replace their taxis due to reduced
travelling requirement during the pandemic. However, as the market
gradually recovers from the post-pandemic effect, we are hoping to
see a positive momentum of in EV battery swap service.
“Now more than ever we need to make strategic
changes and plans to navigate through this crisis and prepare for a
prolonged period of uncertainty and new crises to come. This
includes improving efficiencies and productivities via leaning out
the processes across all functions in the Group, and implementing
organizational labor restructuring to minimize operational &
human resources costs. We aim to upgrade and transition the
management team into a more commercialized standard in the coming
year. We believe this change will set new goals and directions for
the Company to drive up the profitability and transition towards
healthier, more sustainable stage.”
The audited consolidated financial results and
Management’s Discussion and Analysis (MD&A) can be downloaded
from www.SEDAR.com or from the Company's website at
www.cfenergy.com.
About CF Energy Corp.
CF Energy Corp. is a Canadian public company
currently traded on the Toronto Venture Exchange (“TSX-V”) under
the stock symbol “CFY”. It is an integrated energy provider and
natural gas distribution company (or natural gas utility) in the
PRC. CF Energy strives to combine leading clean energy technology
with natural gas usage to provide sustainable energy to its
customer base in the PRC. In 2009, CF Energy was recognized as
being one of China’s the Top Ten Most Influential Brands in the
Natural Gas Industry and in 2019, ranked amongst the 2019 TSX
Venture 50 top performers on the TSXV for the 2018 year.
CONTACT INFORMATION
Corporate Investment
RelationsInvestor.relations@changfengenergy.cn
Charles WangExecutive Assistant to CEO & Chair of the
BoardZhaoyu.wang@changfengenergy.cn
Frederick WongDirector of the
Boardfred.wong@changfengenergy.cn
Mike LiuVP Capital Marketmike.liu@changfengenergy.cn
Forward-Looking Statements
Certain statements contained in this news
release constitute forward-looking statements and forward-looking
information (collectively, “Forward-Looking Statements”). All
statements, other than statements of historical fact, included or
incorporated by reference in this document are Forward-Looking
Statements, including statements regarding activities, events or
developments that the Company expects or anticipates may occur in
the future (including, without limitation, no significant
adjustments to the gas selling price and charges for related
services imposed by the relevant PRC government, the tourism
industry continues to recover from COVID-19 impact and no delay in
the development of the electric vehicle battery swap stations or
the Haitang Bay Integrated Smart Energy Project). These
Forward-Looking Statements can be identified by the use of
forward-looking words such as “will”, “expect”, “intend”, “plan”,
“estimate”, “anticipate”, “believe” or “continue” or similar words
or the negative thereof. No assurance can be given that the plans,
intentions or expectations or assumptions upon which these
Forward-Looking Statements are based will prove to be correct and
such Forward-Looking Statements included in this news release
should not be unduly relied upon. Although management believes that
the expectations represented in such Forward-Looking Statements are
reasonable, there can be no assurance that such expectations will
prove to be correct. Such Forward-Looking Statements are not a
guarantee of performance and involve known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, performance or achievements to differ materially
from the anticipated results, performance or achievements or
developments expressed or implied by such Forward-Looking
Statements. These factors include, without limitation, no
significant and continuing adverse changes in general economic
conditions or conditions in the financial, tourism, and gas
distribution and electric vehicle markets or delays in the
development of key projects. Readers are cautioned that all
Forward-Looking Statements involve risks and uncertainties,
including those risks and uncertainties detailed in the Company’s
filings with applicable Canadian securities regulatory authorities,
copies of which are available at www.sedar.com. The Company urges
readers to carefully consider those factors. The Forward-Looking
Statements included in this news release are made as of the date of
this document and the Company disclaims any intention or obligation
to update or revise any Forward-Looking Statements, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable securities legislation. This news
release does not constitute an offer to sell or solicitation of an
offer to buy any of the securities described herein and accordingly
undue reliance should not be put on such. This news release
contains future oriented financial information and financial
outlook information (collectively, "FOFI") (including, without
limitation, statements regarding expected average production), and
are subject to the same assumptions, risk factors, limitations and
qualifications as set forth in the above paragraph. The FOFI has
been prepared by management to provide an outlook of the Company's
activities and results, and such information may not be appropriate
for other purposes. The Company and management believe that the
FOFI has been prepared on a reasonable basis, reflecting
management's reasonable estimates and judgments, however, actual
results of operations of the Company and the resulting financial
results may vary from the amounts set forth herein. Any FOFI speaks
only as of the date on which it is made, and the Company disclaims
any intent or obligation to update any FOFI, whether as a result of
new information, future events or results or otherwise, unless
required by applicable laws.
Non-IFRS Financial Measures
This news release contains financial terms that
are not considered in the International Financial Reporting
Standards ("IFRS"): EBITDA, Adjusted EBITDA and Adjusted Net
Profit. These financial measures, together with measures prepared
in accordance with IFRS, provide useful information to investors
and shareholders, as management uses them to evaluate the operating
performance of the Company. The Company's determination of these
non-IFRS measures may differ from other reporting issuers, and
therefore are unlikely to be comparable to similar measures
presented by other companies. Further, these non-IFRS measures
should not be considered in isolation or as a substitute for
measures of performance or cash flows prepared in accordance with
IFRS. These financial measures are included because management uses
this information to analyze operating performance and
liquidity.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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