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 period ended March 31, 2024.

Results for the three-month period ended March 31, 2024 (“Q1 2024”)

Continuing Operations

In millions	Q1 2024		Q1 2023		Change		%		Q1 2024		Q1 2023		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Revenue	149.0		93.8		55.2		59	%	28.0		18.5		9.5
Gross Profit	32.7		28.2		4.5		16	%	6.1		5.6		0.5
Gross Profit Margin	21.9	%	30.1	%	-8.2	%
Net Profit	9.9		4.2		5.7		136	%	1.9		0.8		1.1
Adjusted net Profit [Non-IFRS]	9.9		1.4		8.5		581	%	1.9		0.2		1.7
EBITDA	29.6		20.6		9.0		44	%	5.6		4.1		1.5
Adjusted EBITDA [Non-IFRS]	29.6		17.8		11.8		66	%	5.6		3.5		2.1

Revenue in Q1 2024 was RMB149.0 million (approx. CAD28.0 million), an increase of RMB55.2 million (approx. CAD9.5 million), or 59%, from RMB93.8 million (approx. CAD18.5 million) for the three-month period ended March 31, 2023 (“Q1 2023”).

Gross profit in Q1 2024 was RMB32.7 million (approx. CAD6.1 million), an increase of RMB4.5 million (CAD0.5 million) or 16% from RMB28.2 million (approx. CAD5.6 million) in Q1 2023. Overall Gross profit margin in Q1 2024 was 21.9%, a decrease of 8.2 percentage points from 30.1% in Q1 2023.

In millions	Q1 2024		Q1 2023		Change		%		Q1 2024		Q1 2023		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
Net profit for the period	9.9		4.2		5.7		136	%	1.9		0.8		1.1
Non-recurring/non-operating items
Fair value change on derivative financial instrument	-		(2.0	)	2.0		-100	%	-		(0.4	)	0.4
Government financial assistance	-		(0.8	)	0.8		-100	%	-		(0.2	)	0.2
Adjusted net profit for the period (Non-IFRS)	9.9		1.4		8.5		581	%	1.9		0.2		1.7

Net profit in Q1 2024 was RMB9.9 million (approx. CAD1.9 million), an increase of RMB5.7 million (approx. CAD1.1 million) from RMB4.2 million (approx. CAD0.8 million) in Q1 2023. Net profit in Q1 2024 included non-recurring/non-operating items. On a comparable basis, after excluding the fair value change on derivative financial instrument of RMB nil million (Q1 2023: fair value gain of RMB2.0 million, approx. CAD0.4 million) and the government financial assistance of RMB nil million (Q1 2023 RMB0.8 million, approx. CAD0.2 million), the adjusted net profit in Q1 2024 (non-IFRS) remained at RMB9.9 million (approx. CAD1.9 million), an increase of RMB8.5 million (approx. CAD1.7 million) or 581% from adjusted net gain of RMB1.4 million (approx. CAD0.2 million) in Q1 2023.

Basic earnings per share (“EPS”) in Q1 2024 from continuing operations was RMB0.18 (CAD0.03) (basic and diluted) per share. Adjusted EPS in Q1 2024 was RMB0.15 (CAD0.03) (basic and diluted) per share (non-IFRS).

In millions	Q1 2024		Q1 2023		Change		%		Q1 2024		Q1 2023		Change
(except for % figures)	RMB		RMB		RMB				CAD		CAD		CAD
Continuing Operations
EBITDA for the period	29.6		20.6		9.0		44	%	5.6		4.1		1.5
Non-recurring/non-operating items
Fair value change on derivative financial instrument	-		(2.0	)	2.0		-100	%	-		(0.4	)	0.4
Government financial assistance	-		(0.8	)	0.8		-100	%	-		(0.2	)	0.2
Adjusted EBITDA for the period (Non-IFRS)	29.6		17.8		11.8		66	%	5.6		3.5		2.1

EBITDA (Non-IFRS measure) in Q1 2024 was RMB29.6 million (approx. CAD5.6 million), an increase of RMB9.0 million (approx. CAD1.5 million), or 44%, from RMB20.6 million (approx. CAD4.1 million) in Q1 2023. EBITDA in Q1 2024 included non-recurring/non-operating items. On a comparable basis, after excluding the fair value change on derivative financial instrument of RMB nil million (Q1 2023 fair value gain RMB2.0 million, approx. CAD0.4 million) and the government financial assistance of RMB nil million (Q1 2023 RMB0.8 million, approx. CAD0.2 million), the adjusted EBITDA in Q1 2024 (non-IFRS) was RMB29.6 million (approx. CAD5.6 million), an increase of RMB11.8 million (approx. CAD2.1 million), or 66%, from RMB17.8 million (approx. CAD3.5 million) in Q1 2023.

Company Outlook

The natural gas industry faces a variety of challenges ranging from regulatory impacts to market dynamics, and in the competitive and shifting landscape, we must evolve to embrace the changes and plan ahead.

Distributed Smart Energy Ecosystem – What We Achieved:

CF Energy Corp. has developed from a traditional natural gas company into a comprehensive energy solutions provider that aims to incorporate its smart energy system and battery swapping network via energy storage technology to create a highly integrated and efficient framework for sustainable energy management.

CF Energy’s Haitang Bay integrated smart energy project and Meishan project are examples of standalone distributed energy system with advanced grid technologies that enable real-time monitoring and responsive energy distribution based on demand and supply conditions. Through ice storage technology, the Haitang Bay integrated smart energy system was founded.

We have entered the field of electrochemical energy storage for cost reduction and energy conservation through the mode of battery swapping in new energy vehicles. The CF Energy battery swap station network in Sanya already successfully provides an energy storage and distribution network for the EV taxis in Sanya city.

Distributed Smart Energy Ecosystem – What We Are Currently Doing:

The company is working with partners in the IoT (internet of things), and cloud services field to create an efficient EMS (energy management system) that connects the standalone distributed smart energy systems with various energy storage technologies (including battery storage). - IoT Devices and Sensors are deployed across all components of the energy system—solar panels, energy storage units, battery swapping stations, and consumer endpoints. They collect real-time data on energy production, storage levels, battery health, and consumption patterns. Using historical data and machine learning models, the EMS can predict demand spikes, potential system disruptions, and optimal energy production schedules. This helps in preemptive management, reducing wastage, and increasing system reliability.

Distributed Smart Energy Ecosystem – Vision Moving Forward:

The Company envisions the smart energy centralized cooling for hotels, battery swap stations, and operates as a virtual power plant with active end user participation. The combined energy capacity from the cooling system, battery swap stations, and possibly additional storage units, can act as a virtual power plant, providing grid services such as peak shaving, load balancing, and frequency regulation.

The Company is working to integrate a demand response system where hotels and other end users can opt-in to adjust their energy usage during peak periods in response to incentives. For example, shifting non-essential power usage to off-peak hours. EV owners can charge their vehicles during off-peak hours to benefit from lower rates and reduce grid strain during high-demand periods. Alternatively, V2G (Vehicle to Grid) concept allows EVs to return energy to the grid during peak times, effectively using the vehicle’s battery as a grid resource. Furthermore, utilizing a platform for energy trading that allows surplus energy (from renewable sources and stored energy) to be sold back to the grid or shared among participants will add additional revenue stream and encouraging sustainable practices. The integration must connect all components through a smart grid that enables two-way communication between the energy providers and consumers.

The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.sedarplus.com 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 (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.