TORONTO, Nov. 28, 2019 (GLOBE NEWSWIRE) -- 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”), announces that the Company has filed its unaudited condensed interim consolidated financial results for the nine-month period ended September 30, 2019 (“3Q 2019”).
Results for the Nine-Month Period Ended September 30, 2019
Revenue from continuing operations for 3Q 2019 was RMB316.6 million (approx. CAD61.4 million), an increase of RMB26.0 million (approx. CAD3.9 million), or 9%, from RMB290.6 million (approx. CAD57.5 million) for the nine-month period ended September 30, 2018 (“3Q 2018”).
Gross profit for 3Q 2019 was RMB124.0 million (approx. CAD24.0 million), an increase of RMB4.4 million (CAD0.3 million) or 4% from RMB119.6 million (approx. CAD23.7 million) for 3Q 2018. Gross profit margin for 3Q 2019 was 39.2%, a decrease of 2 percentage points from 41.2% for 3Q 2018.
Profit attributable to owners of the Company from continuing operations for 3Q 2019 on a comparable basis was RMB29.8 million (approx. CAD5.8 million), an increase of RMB12.2 million (approx. CAD2.3 million), or 69%, as compared to RMB17.6 million (approx. CAD3.5 million) after excluding the one-off gain of RMB22.6 million (approx. CAD4.5 million) (the “3Q 2018 One-off Gain”) related to the disposal of the discontinued operation for 3Q 2018.
EBITDA from continuing operations on a comparable basis for 3Q 2019 was RMB64.9 million (approx. CAD12.6 million), an increase of RMB28.8 million (approx. CAD5.5 million), or 80%, after excluding the 3Q 2018 One-off Gain from RMB36.1 million (approx. CAD7.1 million) for 3Q 2018.
Despite the overall gross margin for 3Q 2019 was at 39.2%, lower than that of 41.2% for 3Q 2018, it represents a significant improvement from the 37% recorded for the preceding six-months ended June 30, 2019 as since late June 2019 new supply source of pipeline gas helped to reduce the Group’s significant reliance on more expensive LNG supplies, which in turn, lowered the overall cost of gas supply and raised the overall gross profit margin for 3Q 2019.
Going forward, with the guaranteed supply of pipeline gas with price for the 2019 and 2020 years agreed at RMB1.88/m3 and RMB1.93/m3 respectively, it is expected that the gross profit margin of the Company will continue to improve and normalized at previous levels.
Comparison of third quarter of 2019 and third quarter of 2018 Results
Revenue from continuing operations for the third quarter of 2019 (“3rd Q 2019”) was RMB106.6 million (approx. CAD20.7 million), an increase of RMB10.4 million (approx. CAD1.7 million), or 11%, from RMB96.2 million (approx. CAD19.0 million) for the third quarter of 2018 (“3rd Q 2018”), mainly reflected the increase in gas sales of RMB12.4 million (approx. CAD2.2 million), or 28% from RMB45.3 million (approx. CAD9.0 million) for 3rd Q 2018 to RMB57.7 million (approx. CAD11.2 million) for 3rd Q 2019 and the 15% increase in vehicle refuelling revenue for 3rd Q 2019, which was partially offset by the 12% drop in revenue from pipeline installation and connection revenue as certain customers deferred the construction works from 3rd Q 2019 to the fourth quarter of 2019 to align with their revised plans.
Goss profit for 3rd Q 2019 was RMB45.3 million (approx. CAD8.8 million), an increase of RMB4.4 million (approx. CAD0.7 million), or 11% from RMB41.0 million (approx. CAD8.1 million) for 3rd Q 2018. Despite gross profit margin for 3rd Q 2019 was 43%, at similar level as 3rd Q 2018, it signifies a turnaround from the decreasing trend and represents a significant improvement from the 37% reported in the preceding six months to June 30, 2019
Profit attributable to owners of the Company from continuing operations for 3rd Q 2019 on a comparable basis was RMB18.4 million (approx. CAD3.6 million), an increase of RMB12.8 million (approx. CAD2.5 million) from RMB5.6 million (approx. CAD1.1 million) after excluding the one-off gain of RMB8.1 million (approx. CAD1.6 million) related to the disposal of the discontinued operation for 3rd Q 2018, which reflected the improvement in gross profit and gross profit margins as well as the continuing result of effective cost control measures by management in 2019.
Chairman Statement
While operating in a slowing economic growth environment in China, the Group has continued to report growth in the third quarter of 2019 as compared to the same quarter last year. The recent initiatives of the Chinese Central and provincial governments in developing Hainan into a clean energy island and a Free Trade Pilot Zone have solidified the future development potentials of Hainan. With our significant and long presence in Hainan and our strong and experienced management team, we have every confidence in continuing to deliver positive returns and create value to our Shareholders.
I want to extend my heartfelt gratitude to all our Shareholders for their, trust, encouragement and recognition. I would also like to thank the Board and staff for their valuable contributions and devotion to the Company.
The unaudited condensed interim 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. (Formerly “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. 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.
TELE-CONFERENCE
A tele-conference will be held following the release of this press release and the results of the Group, details of which will be provided by way of a separate press release in due course.
CONTACT INFORMATION
Corporate Investment Relations
Investor.relations@changfengenergy.cn
Charles Wang
Executive Assistant to CEO & Chair of the Board
Zhaoyu.wang@changfengenergy.cn
Frederick Wong
Director of the Board
fred.wong@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 markets. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’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.
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