CFY CF Energy Corp

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 unaudited condensed interim consolidated financial results for the three-month and nine-month periods ended September 30, 2023 (“Q3 2023 and Nine Months in 2023” respectively).

Q3 2023 Financial Highlights

Continuing Operations

In millions	Q3 2023	Q3 2022		Change	%	Q3 2023	Q3 2022		Change
(except for % figures)	RMB	RMB		RMB		CAD	CAD		CAD
Continuing Operations
Revenue	125.4	59.0		66.4	112%	24.0	11.4		12.6
Gross Profit	31.6	18.1		13.5	75%	6.1	3.5		2.6
Gross Profit Margin	25.2%	30.6%		-5.4%
Net Profit	8.2	0.3		7.9	>999%	1.6	0.1		1.5
Adjusted net Profit (loss) [Non-IFRS]	6.9	(1.6	)	8.5	519%	1.4	(0.3	)	1.7
EBITDA	26.1	15.5		10.6	69%	5.0	3.0		2.0
Adjusted EBITDA [Non-IFRS]	24.8	13.6		11.2	83%	4.8	2.6		2.2

Revenue in Q3 2023 was RMB125.4 million (approx. CAD24.0 million), an increase of RMB66.4 million (approx. CAD12.6 million), or 112%, from RMB59.0 million (approx. CAD11.4 million) for the three-month period ended September 30, 2022 (“Q3 2022”).

Gross profit in Q3 2023 was RMB31.6 million (approx. CAD6.1 million), an increase of RMB13.5 million (CAD2.6 million) or 75% from RMB18.1 million (approx. CAD3.5 million) in Q3 2022. Overall Gross margin in Q3 2023 was 25.2%, a decrease of 5.4 percentage points from 30.6% in Q3 2022.

In millions	Q3 2023		Q3 2022		Change		%	Q3 2023		Q3 2022		Change
(except for % figures)	RMB		RMB		RMB			CAD		CAD		CAD
Continuing Operations
Net profit for the period	8.2		0.3		7.9		>999%	1.6		0.1		1.5
Non-recurring items
Fair value change on derivative financial instrument	(1.3	)	(2.1	)	0.8		39%	(0.2	)	(0.4	)	0.2
Recognition of share-based payment expenses	-		0.2		(0.2	)	-100%	-		0.0		(0.0	)
Adjusted net profit (loss)  for the period (Non-IFRS)	6.9		(1.6	)	8.5		519%	1.4		(0.3	)	1.7

Net profit in Q3 2023 was RMB8.2 million (approx. CAD1.6 million), an increase of RMB7.9 million (approx. CAD1.5 million) from RMB0.3 million (approx. CAD0.1 million) in Q3 2022. Net profit in Q3 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB1.3 million (approx. CAD0.2 million), the adjusted net profit in Q3 2023 (non-IFRS) was RMB6.9 million (approx. CAD1.4 million), an increase of RMB8.5 million (approx. CAD1.7 million) or 519% from adjusted net loss of RMB1.6 million (approx. CAD0.3 million) in Q3 2022.

Basic earnings per share (“EPS”) in Q3 2023 was RMB0.15 (CAD0.03) per share. Adjusted EPS in Q3 2023 was RMB0.10 (CAD0.02) per share (non-IFRS).

In millions	Q3 2023		Q3 2022		Change		%	Q3 2023		Q3 2022		Change
(except for % figures)	RMB		RMB		RMB			CAD		CAD		CAD
Continuing Operations
EBITDA for the period	26.1		15.5		10.6		69%	5.0		3.0		2.0
Non-recurring items
Fair value change on derivative financial instrument	(1.3	)	(2.1	)	0.8		39%	(0.2	)	(0.4	)	0.2
Recognition of share-based payment expenses	-		0.2		(0.2	)	-100%	-		0.0		(0.0	)
Adjusted EBITDA for the period (Non-IFRS)	24.8		13.6		11.2		83%	4.8		2.6		2.2

EBITDA (Non-IFRS measure) in Q3 2023 was RMB26.1 million (approx. CAD5.0 million), an increase of RMB10.6 million (approx. CAD2.0 million), or 69%, from RMB15.5 million (approx. CAD3.0 million) in Q3 2022. EBITDA in Q3 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB1.3 million (approx. CAD0.2 million), the adjusted EBITDA in Q3 2023 (non-IFRS) was RMB24.8 million (approx. CAD4.8 million), an increase of RMB11.2 million (approx. CAD2.2 million), or 83%, from RMB13.6 million (approx. CAD2.6 million) in Q3 2022.

Nine Months 2023 Financial Highlights

Continuing Operations

In millions	1-9 2023	1-9 2022	Change	%	1-9 2023	1-9 2022	Change
(except for % figures)	RMB	RMB	RMB		CAD	CAD	CAD
Continuing Operations
Revenue	333.3	228.4	104.9	46%	63.8	44.2	19.6
Gross Profit	94.5	78.6	15.9	20%	18.1	15.2	2.9
Gross Profit Margin	28.4%	34.4%	-6.0%
Net Profit	28.6	12.7	15.9	125%	5.5	2.5	3.0
Adjusted net Profit [Non-IFRS]	21.8	0.4	21.4	>999%	4.2	0.1	4.1
EBITDA	78.4	63.4	15.0	24%	15.0	12.3	2.7
Adjusted EBITDA [Non-IFRS]	71.6	51.1	20.5	40%	13.7	9.9	3.8

Revenue for Nine Months in 2023 was RMB333.3 million (approx. CAD63.8 million), an increase of RMB104.9 million (approx. CAD19.6 million), or 46%, from RMB228.4 million (approx. CAD44.2 million) for the nine-month period ended September 30, 2022 (“Nine Months in 2022”).

Gross profit for Nine Months in 2023 was RMB94.5 million (approx. CAD18.1 million), an increase of RMB15.9 million (CAD2.9 million) or 20% from RMB78.6 million (approx. CAD15.2 million) for Nine Months in 2022. Overall Gross margin for Nine Months in 2023 was 28.4%, a decrease of 6.0 percentage points from 34.4% for Nine Months in 2022.

In millions	1-9 2023		1-9 2022		Change		%	1-9 2023		1-9 2022		Change
(except for % figures)	RMB		RMB		RMB			CAD		CAD		CAD
Continuing Operations
Net profit for the period	28.6		12.7		15.9		125%	5.5		2.5		3.0
Non-recurring items
Fair value change on derivative financial instrument	(6.0	)	(12.9	)	6.9		53%	(1.2	)	(2.5	)	1.3
Recognition of share-based payment expenses	-		0.6		(0.6	)	-100%	-		0.1		(0.1	)
Government financial assistance	(0.8	)	-		(0.8	)	100%	(0.1	)	-		(0.1	)
Adjusted net profit for the period (Non-IFRS)	21.8		0.4		21.4		>999%	4.2		0.1		4.1

Net profit for Nine Months in 2023 was RMB28.6 million (approx. CAD5.5 million), an increase of RMB15.9 million (approx. CAD3.0 million), or 125%, from RMB12.7 million (approx. CAD2.5 million) for Nine Months in 2022. Net profit for Nine Months in 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of RMB6.0 million (approx. CAD1.2 million) and government financial assistance of RMB0.8 million (approx. CAD0.1 million), the adjusted net profit for Nine months in 2023 (non-IFRS) was RMB21.8 million (approx. CAD4.2 million), an increase of RMB21.4 million (approx. CAD4.1 million) from RMB0.4 million (approx. CAD0.1 million) for Nine Months in 2022.

Basic earnings per share (“EPS”) for Nine Months in 2023 was RMB0.51 (CAD0.10) per share. Adjusted EPS for Nine Months in 2023 was RMB0.33 (CAD0.06) per share (non-IFRS).

In millions	1-9 2023		1-9 2022		Change		%	1-9 2023		1-9 2022		Change
(except for % figures)	RMB		RMB		RMB			CAD		CAD		CAD
Continuing Operations
EBITDA for the period	78.4		63.4		15.0		24%	15.0		12.3		2.7
Non-recurring items
Fair value change on derivative financial instrument	(6.0	)	(12.9	)	6.9		53%	(1.2	)	(2.5	)	1.3
Recognition of share-based payment expenses	-		0.6		(0.6	)	-100%	-		0.1		(0.1	)
Government financial assistance	(0.8	)	-		(0.8	)	100%	(0.1	)	-		(0.1	)
Adjusted EBITDA for the period (Non-IFRS)	71.6		51.1		20.5		40%	13.7		9.9		3.8

EBITDA (Non-IFRS measure) for Nine Months in 2023 was RMB78.4 million (approx. CAD15.0 million), an increase of RMB15.0 million (approx. CAD2.7 million), or 24%, from RMB63.4 million (approx. CAD12.3 million) for Nine Months in 2022. EBITDA for Nine Months in 2023 included non-recurring items. On a comparable basis, after excluding the effects of non-recurring items, the fair value change on derivative financial instrument of RMB6.0 million (approx. CAD1.2 million) and government financial assistance of RMB0.8 million (approx. CAD0.1 million), adjusted EBITDA for Nine Months in 2023 was RMB71.6 million (approx. CAD13.7 million), an increase of RMB20.5 million (approx. CAD3.8 million), or 40%, from RMB51.1 million (approx. CAD9.9 million) for Nine Months in 2022.

Following on from the business and economic recovery reported in the interim period to June 30, 2023, such momentum has continued to gather pace. We are very pleased to report that the Group reported a 112% period-to-period increase in revenue for Q3 2023 with an overall increase of 46% for the Nine Months in 2023. Bottom line profit also improved significantly as a result with adjusted net profit (non-IFRS) of RMB6.9 million for Q3 2023 (2022: adjusted loss of RMB1.6 million) and RMB21.8 million for the Nine Months in 2023 (2022: adjusted net profit of RMB0.4 million). We will continue to focus on the development of the integrated smart energy and the smart mobility segments and will continue to expand the businesses in China and transition clean energy business as an integrated energy player.

The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.sedarplus.ca or from the Company's website at www.cfenergy.com.

About CF Energy Corp. (Previously known as: Changfeng Energy Inc.)

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.

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. 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 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.sedarplus.ca. 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.