JINJIANG, China, May 20, 2020
/PRNewswire/ -- China Ceramics Co., Ltd. (NASDAQ Capital Market:
CCCL) ("China Ceramics" or the "Company"), a leading Chinese
manufacturer of ceramic tiles used for exterior siding and for
interior flooring and design in residential and commercial
buildings, today announced its financial results for the second
half and fiscal year ended December 31,
2019.
Second Half 2019 Summary
- Revenue was RMB 150.2 million
(US$ 21.4 million) as compared to
RMB 142.6 million (US$ 20.8 million) for the same period of
2018.
- Net profit was RMB 183.7 million
(US$ 26.1 million) as compared to a
net loss of RMB 346.8 million
(US$ 50.6 million) for the same
period of 2018.
- Earnings per share were RMB 30.67
(US$ 4.36) as compared to a loss per
share of RMB 75.95 (US$ 11.07) for the same period of 2018.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization), deducting for non-cash deductions, was
RMB 8.0 million (US$ 1.1 million), as compared to RMB 10.3 million (US$ 1.5
million) for the same period
of 2018.
Operating Results for Second Half 2019 were Affected by the
Following Significant Items:
- In October 2019, we decreased the
pricing of our ceramic tile products by an average of 15%. This
resulted in a 26% increase in our sales volume for the second half
of 2019 as compared to the same period of 2018.
- A provision for a reversal of inventory impairment was
RMB 56.8 million (US$ 8.1 million) as compared to an inventory
impairment of RMB 56.0 million
(US$ 8.2 million) for the same period
of 2018.
- A provision for a reversal of bad debt was RMB 125.2 million (US$
17.8 million) as compared to bad debt of RMB 210.1 million (US$
30.6 million) for the same period of 2018.
Ms. Meishuang Huang, Chief Executive Officer of China Ceramics,
commented, "During the second half of 2019, we continued to
experience challenging market conditions as we did in the same
period of 2018. However, as a result of a 15% average price
decrease of our products in October
2019, our revenue increased modestly in the second half of
2019 due to a robust increase in our sales volume."
"For fiscal year 2019, we utilized production facilities capable
of producing 12.4 million square meters of ceramic tiles per year
out of our effective total annual production capacity of 51.6
million square meters of ceramic tiles. Consistent with our
practices in past quarters, we maintained a reduced utilization of
existing plant capacity based on the current market environment to
keep our operating costs low. We intend to bring additional
capacity online as the business environment improves."
"In December 2019, a novel strain
of coronavirus (COVID-19) was reported in Wuhan, China which the World Health
Organization has declared a global pandemic. The pandemic disrupted
supply chains and affected production and sales across a range of
industries in China as a result of
quarantines, facility closures, travel and logistics restrictions
and related public health orders. Consequently, we experienced
a significant adverse effect of the pandemic on our business in the
first four months of 2020. Although our manufacturing plants are
now fully operational, our production was halted due to the
pandemic for most of the month of February. The disruption of
normal business activity has resulted in a reduced demand for our
products as evidenced by a high number of purchase order
cancellations which have resulted in reduced sales."
"However, in the long-term we believe that our building
materials sector will continue to benefit from growth in the real
estate sector due to continued urbanization and its importance to
China's domestic growth. Further,
we believe that local governments will take measures to stimulate
property sales and pent-up consumer demand for residential
properties due to the coronavirus will ultimately benefit our
building materials sector," concluded Ms. Huang.
Six Months Results Ended December 31,
2019
Revenue for the six months ended December 31, 2019 was RMB
150.2 million (US$ 21.4
million), a 5.3% increase from RMB
142.6 million (US$ 20.8
million) for the same period of 2018. The year-over-year
increase in revenue was due to (i) the 25.5% increase in our sales
volume to 6.3 million square meters of ceramic tiles for the second
six months of 2019 compared to 5.0 million square meters of ceramic
tiles for the same period of 2018, offset by (ii) the 16.0%
decrease in average selling price to RMB
24.0 (US$ 3.41) for the second
six months of 2019 from RMB 28.6
(US$ 4.05) for the same period of
2018.
Gross profit for the six months ended December 31, 2019 was RMB
66.0 million (US$ 9.4
million), as compared to gross loss of RMB 46.0 million (US$ 6.7
million) for the same period of 2018.
The gross profit margin was 44.0% as compared to a 32.3%
gross loss margin for the same period of 2018. The increase in
gross profit margin for the six months ending December 31, 2019 was due to the 25.5% increase
in sales volume.
Other income for the six months ended December 31, 2019 was RMB
7.5 million ($1.1 million),
equivalent to the RMB 7.5 million
($1.1 million) for the comparable
period of 2018. Other income primarily consists of rental income
that the Company received by leasing out one of its production
lines from its Hengdali facility pursuant to an eight-year lease
contract.
Selling and distribution expenses for the six months
ended December 31, 2019 were
RMB 5.6 million (US$ 0.8 million), a slight increase from
RMB 5.3 million (US$ 0.8 million) for the comparable period of
2018.
Administrative expenses for the six months ended
December 31, 2019 were RMB 9.2 million (US$ 1.3
million), as compared to RMB 7.5
million (US$ 1.1 million), for
the same period of 2018. The increase in administrative expenses
was primarily due to increased start-up and related expenses from
our newly incorporated entities.
Bad debt expense for the six months ended
December 31, 2019 entailed a reversal
of bad debt of RMB 125.2 million
(US$ 17.8 million), as compared to
bad debt expense of RMB 210.1 million
(US$ 30.6 million) for the same
period of 2018. We recognize a loss allowance for expected credit
loss on our financial assets, primarily on trade receivables, which
are subject to impairment under IFRS 9, Financial Instruments,
first effective for year 2018. We believe that we have undertaken
appropriate measures to resolve our bad debt expense. We will
continue to review each of our customers for credit quality as well
as assiduously test their accounts receivables balances in each
upcoming fiscal period.
Loss from asset devaluation resulting from an impairment
of non-current assets (fixed assets and land use rights) for the
six months ended December 31, 2019
was RMB nil (US$ nil) as compared to RMB
85.0 million (US$ 12.9
million) for the same period of 2018.
Other expenses for the six months ended December 31, 2019 were RMB nil (US$ nil), as
compared to RMB 0.2 million
(US$ 0.03 million) for the same
period of 2018. The decrease in other expenses was mainly due to a
decrease in depreciation expense resulting from the impairment of
fixed assets and land use rights that occurred in the six months
ended December 31, 2018.
Net profit for the six months ended December 31, 2019 was RMB
183.7 million (US$ 26.1
million), as compared to a net loss of RMB 346.8 million (US$
50.6 million) for the same period of 2018. The increase in
net income was mainly due to the increase in gross profit, the
decrease in bad debt expense (the reversal of bad expense) and nil
loss from asset devaluation for the six months ended December 31, 2019 as compared to an impairment of
non-current assets of RMB 56.0
million (US$ 8.2 million) in
the same period of 2018.
Profit per basic share and fully diluted share for the
six months ended December 31, 2019
were RMB 30.67 (US$ 4.36), as compared to loss per basic and
fully diluted share of RMB 75.95
(US$ 11.07) for the same period of
2018.
Adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) was RMB 8.0
million (US$ 1.1 million) for
the six months ended December 31,
2019, adjusted for the non-cash operating lease charge, the
inventory impairment provision, and bad debt expense, as compared
to RMB 10.2 million (US$ 1.5 million), adjusted for the write-off of
fixed assets, slow-moving inventory and bad debt expense for the
same period of 2018.
Full Year 2019 Financial Results
Revenue for the year ended December 31,
2019 was RMB 327.6 million
(US$ 47.4 million), as compared to
RMB 498.2 million (US$ 75.4 million) for the year ended December 31, 2018. Gross profit was RMB 81.3 million (US$ 11.8
million), as compared to gross loss of RMB 1.2 million (US$ 0.2
million) for the same period of 2018. The gross profit
margin was 24.8%, as compared to a 0.2% gross loss margin for the
same period of 2018. Other income was RMB
14.6 million (US$ 2.1
million), equivalent to RMB 14.6
million (US$ 2.2 million) for
the same period of 2018. Selling expenses were RMB 11.3 million (US$ 1.6
million), as compared to RMB 11.0
million (US$ 1.7 million) for
the same period of 2018. Administrative expenses were RMB 25.1 million (US$ 3.6
million), as compared to RMB 18.0
million (US$ 2.7 million) for
the same period of 2018. Bad debt expense was RMB 68.7 million (US$ 9.9
million), as compared to RMB 316.4
million ($47.9 million) for
the same period of 2018. Loss from asset devaluation resulting
from an impairment of non-current assets was RMB nil (US$ nil), as
compared to RMB 85.0 million
(US$ 12.9 million) for the same
period of 2018. Other expenses were RMB nil (US$ nil), as compared
to RMB 1.5 million (US$ 0.2 million) in the same period of 2018. Net
loss for the year ended December 31,
2019 was RMB 9.5 million
(US$ 1.4 million), as compared to a
net loss of RMB 418.7 million
(US$ 63.4 million) for the same
period of 2018. Loss per share on a basic and fully diluted basis
were RMB 1.56 (US$ 0.23) for the year ended December 31, 2019, as compared to basic and fully
diluted loss per share of RMB 93.18
(US$ 14.10), for the same period of
2018. Adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) was RMB 14.9
million (US$ 2.2 million),
adjusted for the non-cash operating lease charge, inventory
impairment provision, and bad debt expense, as compared to
RMB 50.5 million (US$ 7.6 million), adjusted for the write-off of
fixed assets, slow-moving inventory, and bad debt expense for the
same period of 2018.
Statements of Selected Financial Position Items for the
Fiscal Year Ended 2019
- Cash and bank balances were RMB 8.2
million (US$ 1.2 million) as
of December 31, 2019, compared with
RMB 9.0 million (US$ 1.3 million) as of December 31, 2018.
- Inventory turnover was 217 days as of December 31, 2019, as compared to 117 days as of
December 31, 2018. The increase in
inventory turnover days was primarily due to the 27.0% decrease in
our sales volume for fiscal year 2019 as compared to the fiscal
year 2018 and the reversal of an inventory impairment provision in
fiscal 2019. We recorded a reversal of an inventory impairment
provision of RMB 56.8 million
(US$ 8.2 million) in fiscal 2019
while we recorded an inventory impairment provision of RMB 56.0 million (US$ 8.2
million) in fiscal 2018. We believe that the value of our
current inventories is realizable.
- Trade receivables turnover, net of value added tax, was 194
days as of December 31, 2019, as
compared with 233 days as of December 31,
2018. The decrease in trade receivables turnover was
primarily due to the improved collection of our trade
receivables.
- Trade payables turnover, net of value added tax, was 30 days as
of December 31, 2019 as compared with
26 days as of December 31, 2018. The
average turnover days was within the normal credit period of one to
four months granted by our suppliers.
Liquidity and Capital Resources
Cash flow used in operating activities was
RMB 3.5 million (US$ 0.5 million) for the six months ended
December 31, 2019, as compared to
cash used in operating activities of RMB 2.4
million (US$ 0.3 million) in
the same period of 2018. The increase in cash outflow was mainly
due to increased cash outflow on inventories and decreased cash
inflow on trade receivables which was partly offset by decreased
cash outflow on trade payables.
Cash flow used in investing activities was
RMB 2.8 million (US$ 0.4 million) for the six months ended
December 31, 2019, as compared to
cash flow used in investing activities of RMB 1.7 million (US$ 0.3
million) for the same period of 2018. The increase of cash
outflow was mainly due to the increase in restricted
cash.
Cash flow generated from financing activities was
RMB 5.1 million (US$ 0.8 million) for the six months ended
December 31, 2019, as compared to
cash flow generated from financing activities of RMB 7.5 million (US$ 1.1
million) in the same period of 2018. The decrease in cash
inflow of financing activities is due to the decrease in equity
financing in fiscal 2019 as compared to fiscal 2018.
Plant Capacity and Capital Expenditures Update
We utilized plant capacity capable of producing 6.4 million
square meters of ceramic tiles for the six months ended
December 31, 2019 and 12.4 million
square meters of ceramic tiles for fiscal 2019 out of a total
annual production capacity of 51.6 million square meters.
Our Hengda facility has an annual production capacity of 22.8
million square meters of ceramic tiles as a result of two old
furnaces having been put out of use at the facility. The Company
utilized production capacity at our Hengda facility capable of
producing 2.9 million square meters of ceramic tiles for the six
months ended December 31, 2019.
Our Hengdali facility has an annual production capacity of
28.8 million square meters (which excludes our leasing out 10
million square meters of production capacity to a third party). We
utilized production capacity at our Hengdali facility capable of
producing 3.5 million square meters of ceramic tiles for the six
months ended December 31, 2019.
We intend to bring our unused production capacity
online as customer demand dictates and when there are signs of
improvement in China's real estate
and construction sectors.
We review the level of capital expenditures throughout the
year and make adjustments subject to market conditions. Although
business conditions are subject to change, we anticipate a
modest level of capital expenditures for 2020 other than those
associated with minimal upgrades, small repairs and the maintenance
of equipment.
Business Outlook
In an effort to bolster sales, in October
2019 we decreased the pricing of our ceramic tile products
by an average of 15%. As a result, our sales volume increased
by 26.0% in the second half of 2019 which resulted in a 5.3%
increase in sales for the six months ended December 31, 2019 on a year-over-year basis. We
viewed this as encouraging as it signaled slightly improving market
conditions for the six-month period since a decrease in our product
pricing affected the demand for such products. Conversely, in July
of 2018 we decreased the pricing of our ceramic tile products by an
average of 10% but our sales volume declined which evidenced
deteriorating market conditions.
In order to supplement and expand our current market reach, in
2019 we announced plans to enter the ceramic tile market in
Southeast Asia to capitalize upon
the increased level of the region's new building construction while
its climate conditions make it an ideal fit for many of our ceramic
tile products. Although this effort was temporarily halted due to
the coronavirus pandemic, we have redeployed this strategy with the
goal to diversify our business by generating revenue outside of
China.
A key element of this diversification strategy is to bolster our
research and development efforts in order to expand our market.
Last year, we developed a new type of exterior ceramic tile
designed to cool temperatures of buildings which, once fully tested
and certified as planned for this summer, will target the
Southeast Asia market.
We are also focused upon diversifying our operational
capabilities to fuel our growth. We formed a new subsidiary,
Chengdu Future Talented Management and Consulting Co, Ltd., which
provides computer server consulting that includes on-site training
and online problem-solving to maintain computer systems and
internet connectivity, engage in troubleshooting and repair as
needed, and to provide overall technical support. Although we
expect this subsidiary to contribute only a modest amount of
revenue in 2020, we believe that this venture represents a
substantial growth sector which could lead to additional high
technology growth opportunities.
Because of the significant uncertainties surrounding the
COVID-19 pandemic, the related financial impact on the year 2020
cannot be reasonably ascertained at this time. The pandemic
disrupted supply chains and affected production and sales across a
range of industries in China as a
result of quarantines, facility closures, travel and logistics
restrictions and related public health orders. Although our
manufacturing capabilities have resumed normal operations, our
production was halted for most of the month of February and our
logistics functions are still lagging due to certain regions that
remained closed through April. Consequently, we anticipate that our
sales orders will be significantly reduced for the first four
months of 2020 as compared to the same period in 2019.
As reported, China's economy
declined 6.8% in the first quarter of 2020 following many years of
high growth. Although factories across China have restarted, many of its
international global markets are still in lockdown and business has
not yet returned to normal. It remains to be seen what the economic
recovery in China will look like
for the rest of 2020 and what stimulus programs the central
Government might enact.
In terms of the real estate and construction sectors, the
deleveraging of China's property
developers could continue in 2020 as occurred in 2019 due to
limited borrowing and resulting cash flow issues. Also, new home
sales declined by an estimated 90% from a year ago during the
period of China's lockdown as
potential buyers were not able to view properties. However, early
sales data indicates that pent-up demand has already resulted in
substantial buying activity as consumers are eager to secure
properties in China's major
cities. In addition, some restrictive measures have been loosened
in different cities to support the housing market. As previously
noted, China's real estate sector
has been resilient over time and has been a key driver of
China's economic growth.
Notwithstanding the above-referenced macroeconomic
challenges, we believe that the long-term fundamentals of the
real estate and construction sectors remain intact and these
fundamentals will emerge as business conditions normalize.
China's urbanization trend
continues to underpin its economic growth and the need for housing
leads to a sustained demand for our building materials products. We
believe that we have a competitive advantage in our sector due to
our innovation, brand name recognition and our ability to meet our
customers' needs.
This business outlook reflects the Company's current and
preliminary views, and is based on the information currently
available to us, which are subject to change and is subject to
risks and uncertainties, as well as risks and uncertainties
identified in the Company's public filings.
Conference Call Information
We will host a conference call at 8:00 am ET on May
20, 2020. Listeners may access the call by dialing +1
(877) 275-8968 five to ten minutes prior to the scheduled
conference call time. International callers should dial +1 (706)
643-1666. The conference participant pass code is 1653008. A replay
of the conference call will be available for 14 days starting from
11:00 am ET on May 20, 2020. To access the replay, dial +1 (855)
859-2056. International callers should dial +1 (404)
537-3406. The pass code is 1653008 for the
replay.
About China Ceramics Co., Ltd.
China Ceramics Co., Ltd. is a leading manufacturer of ceramic
tiles in China. The Company's
ceramic tiles are used for exterior siding, interior flooring, and
design in residential and commercial buildings. China Ceramics'
products, sold under the "Hengda" or "HD", "Hengdali" or "HDL", the
"TOERTO" and "WULIQIAO" brands, and the "Pottery Capital of Tang
Dynasty" brands, are available in over 2,000 style, color and size
combinations and are distributed through a network of exclusive
distributors as well as directly to large property developers. For
more information, please visit http://www.cceramics.com.
Currency Convenience Translation
The Company's financial information is stated in Renminbi
("RMB"). Translations of amounts from RMB into
United States dollars ("US$")
in this earnings release are solely for the
convenience of the readers and were calculated at the rate of
US$1.00 = RMB
6.9618 for balance sheet accounts at the balance sheet date,
US$1.00 = RMB
6.9081 for the P&L accounts for the year ended
December 31, 2019, and US$1.00 = RMB
7.0296 for the P&L accounts for the six months ended
December 31, 2019. The exchange rate
refers to the historical rate as set forth in the H.10 statistical
release published by www.federalreserve.gov on December 31, 2019. Such translations should not
be construed as representations that RMB amounts could have
been, or could be, converted realized or settled
into US$ at that rate on December 31, 2019 or any other rate.
Safe Harbor Statement
Certain of the statements made in this press release are
"forward-looking statements" within the meaning and protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions, and future performance, and
involve known and unknown risks, uncertainties and other factors,
which may be beyond our control, and which may cause the actual
results, performance, capital, ownership or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such forward-looking
statements. Forward-looking statements in this press release
include, without limitation, the continued stable macroeconomic
environment in the PRC, the PRC real estate and construction
sectors continuing to exhibit sound long-term fundamentals, our
ability to bring additional capacity online going forward as our
business improves, our customers continuing to adjust to our
product price increases, our ability to sustain our average selling
price increases and to continue to build volume in the quarters
ahead, and whether our enhanced marketing efforts will help to
produce wider customer acceptance of the new price points. All
statements other than statements of historical fact are statements
that could be forward-looking statements. You can identify these
forward-looking statements through our use of words such as "may,"
"will," "anticipate," "assume," "should," "indicate," "would,"
"believe," "contemplate," "expect," "estimate," "continue," "plan,"
"point to," "project," "could," "intend," "target" and other
similar words and expressions of the future.
All written or oral forward-looking statements attributable
to us are expressly qualified in their entirety by this cautionary
notice, including, without limitation, those risks and
uncertainties described in our annual report on Form 20-F for the
year ended December 31, 2019 and
otherwise in our SEC reports and filings. Such reports are
available upon request from the Company, or from the Securities and
Exchange Commission, including through the SEC's Internet website
at http://www.sec.gov. We have no obligation and do not undertake
to update, revise or correct any of the forward-looking statements
after the date hereof, or after the respective dates on which any
such statements otherwise are made.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures and guidance
which are considered "non-GAAP" financial measures under applicable
SEC rules and regulations. As described below, the Company's
management believes that in order to properly understand its
short-term and long-term financial trends, including period over
period comparisons of the Company's operations, investors may find
it useful to exclude the effect of certain charges or gains that
contribute to or reduce earnings but that result from transactions
or events that management believes may or may not recur with
similar materiality or impact to operations in future periods. The
Company generally uses such measures to facilitate management's
review of the operational performance of the Company. For more
detail on these measures and reconciliation of such measure to the
most comparable IFRS financial measures, please refer to page 15 of
this release.
FINANCIAL TABLES
CHINA CERAMICS
CO., LTD AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
As of
December
31, 2019
|
|
As of
December
31, 2018
|
|
USD'000
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
ASSETS AND
LIABILITIES
|
|
|
|
|
NONCURRENT
ASSETS
|
|
|
|
|
Property
and equipment, net
|
5
|
35
|
|
46
|
Investment property, net
|
-
|
-
|
|
-
|
Land use
rights, net
|
-
|
-
|
|
-
|
Deferred
tax assets
|
-
|
-
|
|
-
|
Total noncurrent
assets
|
5
|
35
|
|
46
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Right-of-use assets, net
|
729
|
5,078
|
|
-
|
Inventories, net
|
23,743
|
165,296
|
|
127,346
|
Trade
receivables, net
|
25,428
|
177,023
|
|
224,114
|
Other
receivables and prepayments
|
293
|
2,036
|
|
4,673
|
Taxes
receivable
|
261
|
1,818
|
|
27
|
Restricted Cash
|
400
|
2,785
|
|
1,719
|
Cash and
bank balances
|
1,180
|
8,212
|
|
9,016
|
Total current
assets
|
52,034
|
362,248
|
|
366,895
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Trade
payables
|
3,243
|
22,577
|
|
24,329
|
Unearned
revenue
|
89
|
619
|
|
-
|
Accrued
liabilities and other payables
|
3,353
|
23,342
|
|
25,894
|
Amounts
owed to related parties
|
5,202
|
36,217
|
|
36,203
|
Lease
liabilities
|
832
|
5,793
|
|
-
|
Taxes
payable
|
121
|
842
|
|
4,497
|
Total current
liabilities
|
12,840
|
89,390
|
|
90,923
|
|
|
|
|
|
NET CURRENT
ASSETS
|
39,194
|
272,858
|
|
275,972
|
|
|
|
|
|
NET ASSETS
|
39,199
|
272,893
|
|
276,018
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Share
capital
|
57
|
397
|
|
306
|
Reserves
|
39,142
|
272,496
|
|
275,712
|
Total stockholders' equity
|
39,199
|
272,893
|
|
276,018
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
|
|
|
Six months ended
December 31,
|
|
2019
|
|
2018
|
|
US'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
Net sales
|
21,360
|
|
150,150
|
|
142,559
|
|
|
|
|
|
|
Cost of goods
sold
|
11,969
|
|
84,136
|
|
188,570
|
|
|
|
|
|
|
Gross profit
(loss)
|
9,391
|
|
66,014
|
|
(46,011)
|
|
|
|
|
|
|
Other
income
|
1,070
|
|
7,524
|
|
7,549
|
Selling and
distribution expenses
|
(804)
|
|
(5,649)
|
|
(5,334)
|
Administrative
expenses
|
(1,312)
|
|
(9,226)
|
|
(7,516)
|
Bad debt
expense
|
17,810
|
|
125,199
|
|
(210,058)
|
Loss from assets
devaluation
|
-
|
|
-
|
|
(85,021)
|
Finance
costs
|
(22)
|
|
(158)
|
|
-
|
Other
expenses
|
-
|
|
-
|
|
(168)
|
|
|
|
|
|
|
Profit (loss) before
taxation
|
26,133
|
|
183,704
|
|
(346,559)
|
|
|
|
|
|
|
Income tax
expense
|
4
|
|
29
|
|
(209)
|
|
|
|
|
|
|
Profit (loss)
attributable to shareholders
|
26,129
|
|
183,675
|
|
(346,768)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
|
Basic
(RMB)
|
4.36
|
|
30.67
|
|
(75.95)
|
Diluted
(RMB)
|
4.36
|
|
30.67
|
|
(75.95)
|
CHINA CERAMICS
CO., LTD. AND ITS SUBSIDIARIES
|
SALES VOLUME
AND AVERAGE SELLING PRICE
|
|
|
|
|
|
Six months ended
December 31,
|
|
|
2019
|
2018
|
|
Sales volume
(square meters)
|
6,264,778
|
4,993,244
|
|
Average Selling
Price (in RMB/square meter)
|
23.97
|
28.55
|
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
Years ended
December 31,
|
|
|
2019
|
|
2018
|
|
USD'000
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
Net sales
|
47,420
|
327,581
|
|
498,189
|
|
|
|
|
|
Cost of goods
sold
|
35,647
|
246,255
|
|
499,355
|
|
|
|
|
|
Gross profit
(loss)
|
11,773
|
81,326
|
|
(1,166)
|
|
|
|
|
|
Other
income
|
2,119
|
14,636
|
|
14,637
|
Selling and
distribution expenses
|
(1,639)
|
(11,321)
|
|
(11,026)
|
Administrative
expenses
|
(3,635)
|
(25,111)
|
|
(17,990)
|
Bad debt
expense
|
(9,939)
|
(68,660)
|
|
(316,438)
|
Loss from assets
devaluation
|
-
|
-
|
|
(85,021)
|
Finance
costs
|
(46)
|
(315)
|
|
-
|
Other
expenses
|
-
|
-
|
|
(1,461)
|
|
|
|
|
|
Loss before
taxation
|
(1,367)
|
(9,445)
|
|
(418,465)
|
|
|
|
|
|
Income tax
expense
|
8
|
56
|
|
(209)
|
|
|
|
|
|
Loss attributable to
shareholders
|
(1,375)
|
(9,501)
|
|
(418,674)
|
|
|
|
|
|
Other comprehensive
loss
|
-
|
-
|
|
-
|
Exchange differences
on translation of financial statements of foreign
operations
|
17
|
118
|
|
(807)
|
|
|
|
|
|
Total comprehensive
loss for the year
|
(1,358)
|
(9,383)
|
|
(419,481)
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Basic
(RMB)
|
(0.23)
|
(1.56)
|
|
(93.18)
|
Diluted
(RMB)
|
(0.23)
|
(1.56)
|
|
(93.18)
|
|
|
|
|
|
CHINA CERAMICS
CO., LTD. AND ITS SUBSIDIARIES
|
SALES VOLUME AND
AVERAGE SELLING PRICE
|
|
|
Years ended
December 31,
|
|
2019
|
|
2018
|
|
|
|
|
Sales volume
(square meters)
|
12,888,598
|
|
17,653,219
|
Average Selling
Price (in RMB/square meter)
|
25.42
|
|
28.22
|
|
|
|
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
ended
December
31,
|
|
|
|
2019
|
|
2018
|
|
USD'000
|
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Loss before taxation
|
26,133
|
|
183,704
|
|
(346,559)
|
Adjustments for
|
|
|
|
|
|
Amortization of land use rights
|
-
|
|
-
|
|
54
|
Operating Lease charge
|
867
|
|
6,093
|
|
-
|
Depreciation of property, plant and equipment
|
1
|
|
6
|
|
5,747
|
Amortization of prepaid expenses
|
381
|
|
2,677
|
|
-
|
Gain on disposal of property, plant and equipment
|
-
|
|
-
|
|
-
|
Write down of inventories ( reversal of inventory
provision)
|
(8,075)
|
|
(56,766)
|
|
55,973
|
Bad debt provision of trade receivables
|
(17,810)
|
|
(125,198)
|
|
210,058
|
Loss from assets devaluation
|
-
|
|
-
|
|
85,021
|
Share based compensation
|
45
|
|
318
|
|
321
|
Interest expense
|
22
|
|
158
|
|
-
|
Operating cash flows before working capital changes
|
1,564
|
|
10,992
|
|
10,615
|
Increase (decrease) in inventories
|
(2,420)
|
|
(17,009)
|
|
421
|
Decrease in trade receivables
|
3,837
|
|
26,976
|
|
45,219
|
Decrease in other receivables and prepayments
|
231
|
|
1,621
|
|
5,555
|
Decrease in trade payables
|
(2,721)
|
|
(19,126)
|
|
(57,549)
|
Increase in unearned revenue
|
88
|
|
619
|
|
-
|
Decrease in taxes payable
|
(449)
|
|
(3,154)
|
|
(412)
|
Decrease in accrued liabilities, other payables, and amounts owed
to related parties
|
(624)
|
|
(4,388)
|
|
(6,244)
|
Cash used in operations
|
(494)
|
|
(3,469)
|
|
(2,395)
|
Interest paid
|
-
|
|
-
|
|
-
|
Income tax paid
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
Net
cash used in operating activities
|
(494)
|
|
(3,469)
|
|
(2,395)
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Increase in restricted cash
|
(396)
|
|
(2,785)
|
|
(1,719)
|
|
|
|
|
|
|
Net cash used in investing activities
|
(396)
|
|
(2,785)
|
|
(1,719)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Insurance of share capital for equity financing
|
716
|
|
5,033
|
|
7,310
|
Warrants exercised
|
6
|
|
41
|
|
-
|
Advance from related parties
|
2
|
|
14
|
|
186
|
|
|
|
|
|
|
Net cash
generated from financing activities
|
724
|
|
5,088
|
|
7,496
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH & EQUIVALENTS
|
(166)
|
|
(1,166)
|
|
3,382
|
CASH &
EQUIVALENTS, BEGINNING OF PERIOD
|
1,392
|
|
9,445
|
|
6,042
|
EFFECT OF FOREIGN
EXCHANGE RATE DIFFERENCES
|
(46)
|
|
(67)
|
|
(408)
|
|
|
|
|
|
|
CASH &
EQUIVALENTS, END OF PERIOD
|
1,180
|
|
8,212
|
|
9,016
|
|
|
|
|
|
|
CHINA CERAMICS
CO., LTD AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
|
|
|
|
|
Years ended
December 31,
|
|
|
2019
|
|
2018
|
|
USD'000
|
RMB'000
|
|
RMB'000
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Loss before
taxation
|
(1,368)
|
(9,445)
|
|
(418,465)
|
Adjustments
for
|
|
|
|
|
Amortization of land
use rights
|
-
|
-
|
|
108
|
Operating lease
charge
|
1,763
|
12,187
|
|
-
|
Depreciation of
property, plant and equipment
|
2
|
12
|
|
11,500
|
Amortization of
prepaid expenses
|
387
|
2,677
|
|
-
|
Gain on disposal of
property, plant and equipment
|
-
|
-
|
|
-
|
Write down of
inventories (reversal of inventory provision)
|
(8,217)
|
(56,766)
|
|
55,973
|
Bad debt provision of
trade receivables
|
9,939
|
68,661
|
|
316,438
|
Loss from assets
devaluation
|
-
|
-
|
|
85,021
|
Share based
compensation
|
91
|
627
|
|
619
|
Interest
expense
|
46
|
315
|
|
-
|
Operating cash flows
before working capital changes
|
2,643
|
18,268
|
|
51,194
|
Decrease in
inventories
|
2,724
|
18,817
|
|
8,347
|
Decrease in trade
receivables
|
(3,122)
|
(21,570)
|
|
(23,309)
|
Increase in other
receivables and prepayments
|
(6)
|
(40)
|
|
(2,521)
|
Decrease in trade
payables
|
(254)
|
(1,753)
|
|
(36,755)
|
Increase in unearned
revenue
|
90
|
619
|
|
-
|
Increase (decrease)
in taxes payable
|
(796)
|
(5,502)
|
|
635
|
Decrease in accrued
liabilities, other payables, and
amounts owed to related parties
|
(369)
|
(2,552)
|
|
(3,825)
|
Cash generated from
(used in) operations
|
910
|
6,287
|
|
(6,234)
|
Interest
paid
|
-
|
-
|
|
-
|
Income tax
paid
|
-
|
-
|
|
-
|
|
|
|
|
|
Net cash generated
from (used in) operating activities
|
910
|
6,287
|
|
(6,234)
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Acquisition of fixed
assets
|
-
|
-
|
|
-
|
Proceed from disposal
of property, plant and equipment
|
-
|
-
|
|
-
|
Increase in
restricted cash
|
(154)
|
(1,066)
|
|
(1,719)
|
|
|
|
|
|
Net cash used in
investing activities
|
(154)
|
(1,066)
|
|
(1,719)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Payment for lease
liabilities
|
(2,013)
|
(13,902)
|
|
-
|
Insurance of share
capital for equity financing
|
729
|
5,033
|
|
15,262
|
Warrants
exercised
|
427
|
2,948
|
|
-
|
Advance from related
parties
|
2
|
14
|
|
186
|
|
|
|
|
|
Net cash generated
from (used in) financing activities
|
(855)
|
(5,907)
|
|
15,448
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH & EQUIVALENTS
|
(99)
|
(686)
|
|
7,495
|
CASH &
EQUIVALENTS, BEGINNING OF YEAR
|
1,311
|
9,016
|
|
2,328
|
EFFECT OF FOREIGN
EXCHANGE RATE DIFFERENCES
|
(32)
|
(118)
|
|
(807)
|
|
|
|
|
|
CASH &
EQUIVALENTS, END OF YEAR
|
1,180
|
8,212
|
|
9,016
|
|
|
|
|
|
About Non-GAAP Financial Measures
In addition to China Ceramics' consolidation financial results
under International Financial Reporting Standards ("IFRS"), the
Company also provides certain non-IFRS financial measures (referred
to as the "non-GAAP financial measures") for the second half and
full fiscal years ending December 31,
2018 and December 31, 2019,
respectively, from their comparable IFRS measures. Such non-GAAP
financial measures are offered to supplement the Company's audited
financial statements, this earnings release and the accompanying
tables and include EBITDA and Adjusted EBITDA.
EBITDA is calculated as earnings before interest, tax,
depreciation and amortization (EBITDA). Adjusted EBITDA is
calculated as EBITDA less loss from noncash operating lease charge,
asset devaluation, inventory write-down and bad debt expense. Both
are measures of the Company's operating performance.
The Company uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors in evaluating the Company's ongoing operational
performance. In addition, the Company believes that these non-GAAP
financial measures provide investors with other methods for
assessing China Ceramics' operating results in a manner that is
focused on the performance of its ongoing operations. Readers are
cautioned not to view non-GAAP financial measures on a stand-alone
basis or as a substitute for results under IFRS, or as being
comparable to results reported or forecasted by other companies,
and should refer to the unaudited reconciliation presented below.
The Company has provided a reconciliation of these non-GAAP
financial measures to the most directly comparable IFRS financial
measure below as adjusted for the periods indicated:
CHINA CERAMICS
CO., LTD.
Unaudited
Reconciliation of GAAP to Non-GAAP: Net Income to EBITDA
(1)
Six months ended
December 31, 2019 and December 31, 2018
(all figures in
000's)
|
|
|
|
|
2019
|
|
2018
|
|
|
RMB
|
USD
|
|
RMB
|
USD
|
|
Net income
(loss)
|
183,675
|
26,129
|
|
(346,768)
|
(50,562)
|
|
Interest
expense
|
158
|
22
|
|
-
|
-
|
|
Interest
income
|
(26)
|
(4)
|
|
(36)
|
(5)
|
|
Income tax
expense
|
29
|
4
|
|
209
|
30
|
|
Depreciation
and amortization expense
|
6
|
1
|
|
5,801
|
846
|
|
|
|
|
|
|
|
|
EBITDA
|
183,842
|
26,152
|
|
(340,794)
|
(49,691)
|
|
|
|
|
|
|
|
|
Loss from asset
devaluation (2)
|
-
|
-
|
|
85,021
|
12,397
|
|
Inventory
write-down (reversal) (3)
|
(56,766)
|
(8,075)
|
|
55,973
|
8,161
|
|
Bad debt
expense (reversal) (4)
|
(125,199)
|
(17,810)
|
|
210,058
|
30,628
|
|
Operating lease
charge (5)
|
6,093
|
867
|
|
-
|
-
|
|
Adjusted
EBITDA
|
7,970
|
1,134
|
|
10,258
|
1,495
|
|
|
|
(1) EBITDA is
defined as earnings before interest, taxes, depreciation and
amortization
|
|
(2) Non-cash
write-down of fixed assets and land use rights
|
(3) Non-cash
inventory write-down
|
(4) Non-cash
write-off of bad debt expense
|
(5) Non-cash
operating lease charge (depreciation of right-of-use
assets)
|
CHINA CERAMICS
CO., LTD.
|
Unaudited
Reconciliation of GAAP to Non-GAAP: Net Income to Adjusted EBITDA
(1)
|
Years ended
December 31, 2019 and December 31, 2018
|
(all figures in
000's)
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
RMB
|
USD
|
|
RMB
|
USD
|
Net
loss
|
(9,501)
|
(1,375)
|
|
(418,674)
|
(63,358)
|
Interest
expense
|
315
|
46
|
|
-
|
-
|
Interest
income
|
(72)
|
(10)
|
|
(36)
|
(5)
|
Income tax
expense
|
56
|
8
|
|
209
|
32
|
Depreciation
and amortization expense
|
12
|
2
|
|
11,608
|
1,757
|
|
|
|
|
|
|
EBITDA
|
(9,190)
|
(1,329)
|
|
(406,893)
|
(61,574)
|
|
|
|
|
|
|
Loss from asset
devaluation (2)
|
-
|
-
|
|
85,021
|
12,866
|
Inventory
write-down (reversal) (3)
|
(56,766)
|
(8,217)
|
|
55,973
|
8,470
|
Bad debt
expense (4)
|
68,660
|
9,939
|
|
316,438
|
47,887
|
Operating lease
charge (5)
|
12,187
|
1,764
|
|
-
|
-
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(14,891)
|
(2,157)
|
|
50,539
|
7,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBITDA is defined
as earnings before interest, taxes, depreciation and
amortization
|
(2) Non-cash
write-down of fixed assets and land use rights
|
(3) Non-cash
inventory write-down
|
(4) Non-cash
write-off of bad debt expense
|
(5) Non-cash
operating lease charge (depreciation of right-of-use
assets)
|
View original
content:http://www.prnewswire.com/news-releases/china-ceramics-announces-second-half-and-full-year-financial-results-for-fiscal-2019-301061784.html
SOURCE China Ceramics Co., Ltd.