JINJIANG, Fujian Province, China, April 8, 2016 /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 that the market for building construction products in China is becoming increasingly challenging and that the Company expects to record a non-cash impairment charge of RMB 421.6 million (US$ 65.3 million) for the fourth quarter of 2015 related to non-current assets at its Hengda and Hengdali production facilities. The impairment of the non-current assets is attributable to challenging market conditions in China which are expected to result in a contraction in demand for the Company's products in fiscal 2016. As a result, the Company's fourth quarter earnings will be negatively impacted by this non-recurring, non-cash charge. This non-cash accounting charge will not impact the Company's liquidity, cash flows from operations or compliance with its debt covenants. The Company anticipates that its fourth quarter revenue and gross profit will be generally in line with its previously discussed outlook, with revenue in the range of RMB 195 million to RMB 215 million (US$ 30 million to US$ 33 million), but with gross profit slightly higher than the indicated range of RMB 25 million to RMB 28 million (US$ 3.8 million to US$ 4.3 million). As of the date of this release, our backlog was an estimated RMB 66.8 million (US$ 10.3 million) which represents approximately the next two months of revenue as of the end of the fourth quarter. This compares to a backlog of approximately RMB 137.0 million (US$ 22.1 million) as of December 31, 2014, a year-over-year decrease of 51.2%.
The asset impairment consists of an estimated RMB 124.8 million (US$ 19.3 million) associated with property, plant and equipment, land use rights and goodwill at the Company's Hengda facility and an estimated RMB 296.8 million (US$ 46.0 million) associated with property, plant and equipment, land use rights and goodwill at its Hengdali facility.
"We determined that the current write-down was required given China's decelerating macroeconomic growth and an expected reduction in demand for our building materials products in 2016. With this non-cash adjustment, our long-term assets will be more reflective of current market value," commented Chief Executive Officer Jiadong Huang. "We expect that our marketing initiatives and excellent customer relationships will enable us to maintain market share, and that we will continue to innovate with new products so as to remain a premier competitor in our market."
Fourth Quarter Financial Results Conference Call
The Company will host a conference call following the announcement of its fourth quarter and fiscal year end 2015 financial results. The Company expects that the earnings release and conference call will occur during the week of either April 18th or April 25th and dial-in information will be provided approximately one week in advance of the call.
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, 2014 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.
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SOURCE China Ceramics Co., Ltd.