TORONTO, April 28, 2020 (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” or “China”), is pleased to announce today its consolidated financial results for the year ended December 31, 2019.
Results for the Year Ended December 31, 2019
Revenue
Revenue from continuing operations in 2019 was RMB438.0 million (approx. CAD84.2 million), an increase of RMB37.5 million (approx. CAD5.7 million), or 9%, from RMB400.5 million (approx. CAD78.5 million) in 2018.
Gross profit and margin
Gross profit in 2019 was RMB174.7 million (approx. CAD33.6 million), an increase of RMB9.7 million (CAD1.3 million) or 6% from RMB165.0 million (approx. CAD32.3 million) in 2018. Gross profit margin for 2019 was 39.9%, a decrease of 1.3 percentage points from 41.2% in 2018.
While the shortage of pipeline gas supply to the Group in the first half of 2019 had affected the profit margin for that period as more expensive LNGs had to be purchased to fulfill requirements, the new supply source of pipeline gas made available in late June of 2019 helped to reduce the Group’s reliance on more expensive LNG supplies, which in turn, lowered the cost of gas supply in the second half of 2019, and normalized the overall gross profit margin for the year to a level very close to that in 2018.
Profit attributable to owners of the Company
Profit attributable to owners of the Company from continuing operations in 2019 on a comparable basis was RMB47.0 million (approx. CAD9.0 million), an increase of RMB33.1 million (approx. CAD6.5 million), or 238%, as compared to RMB13.9 million (approx. CAD2.7 million) after excluding the one-off gain of RMB22.6 million (approx. CAD4.4 million) (the “2018 One-off Gain”) related to the disposal of the discontinued operation in 2018. This reflected the improvement in gross profit as well as the continuing result of effective cost control measures by management in 2019.
EBITDA
EBITDA from continuing operations in 2019 was RMB97.1 million (approx. CAD18.7 million), an increase of RMB8.4 million (approx. CAD1.3 million), or 9%, from RMB88.7 million (approx. CAD17.4 million) in 2018.
Chair’s Statement
Against the backdrop of slowing economic environment in China, I am very pleased to deliver good results with improvements in profitability and working capital position for my first year as CEO and Chair of the Board. As good corporate citizens serving the community, we made donations of personal hygiene products and masks to medical personnel in China while China was combating the coronavirus (“COVID-19”). Recently, CF Energy has also secured and is in the process of donating medical supplies including over 50,000 medical grade masks to medical personnel and others in the community of the Greater Toronto Area. COVID-19 has significantly interrupted our operations across all business segments in the first quarter of this year and such impact is expected to continue for the rest of the year. The Board and management are braced for such challenges and fully committed to continue with the cost control initiatives and put various contingency measures in place to minimize impact on the bottom line.
On the more positive front, the commencement of construction of the Haitang Bay Smart Energy Project on March 8, 2020, an important milestone by the management team amid complicated local issues on land procurement, is a vote of confidence in our decision to take a controlling interest in the project. The project company has also now received the land-use-right certification as well as the construction permit for the construction of the B energy station for the project. With this major hurdle now overcome, we look forward to another milestone of elevating us to the new role of an operator of the integrated smart energy system in China with completion of phase one construction and commence operation of the project by the first quarter of 2021. This will pave the way for us to replicate the success of this project outside of Hainan and expand into other parts of China.
Finally, I want to extend my heartfelt gratitude to all our shareholders for their trust, encouragement and recognition. I would also like to thank all members of the Board, management and staff for their valuable contributions and devotion to the Company and look forward to your continuing support while facing the challenges we are likely to be facing ahead.
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. (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.
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.