China New Borun Announces Second Quarter 2015 Unaudited Financial Results

Aug 11, 2015, 16:30 ET from China New Borun Corporation

BEIJING, Aug. 11, 2015 /PRNewswire/ -- China New Borun Corporation (NYSE: BORN; "Borun" or the "Company"), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the second quarter ended June 30, 2015.

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "We are ecstatic in being able to deliver a strong second quarter of 2015 that significantly exceeded our top line expectations. During the quarter, the baijiu industry showed improved demand, driven by the mass market; while at the same time, the number of edible alcohol producers had contracted, as many smaller and inefficient edible alcohol producers exited the industry. This enabled Borun to maintain a solid average selling price for edible alcohol at better-than-expected shipment volume, which drove strong revenue and profitability."

"We believe the improved competitive landscape and pricing for edible alcohol will likely sustain, and as we had already proactively upgraded our production facilities and conducted partial maintenance during the first quarter of 2015, we plan a shorter annual maintenance period this third quarter. With our solid market position and the improved fundamentals in the baijiu industry, we anticipate greater profits in 2015," Mr. Wang concluded.

Second Quarter 2015 Quick View

  • Total revenue increased 7.7% to RMB720.6 million ($117.9 million[1]) from RMB668.9 million in the second quarter of 2014.
  • Gross profit increased 29.8% to RMB87.7 million ($14.3 million) from RMB67.5 million in the second quarter of 2014.
  • Net income increased 81.7% to RMB38.1 million ($6.2 million) from RMB21.0 million in the second quarter of 2014.
  • Basic and diluted earnings per American Depositary Share ("ADS") were RMB1.48 ($0.24) for the quarter ended June 30, 2015. Each ADS represents one of the Company's ordinary shares.

Second Quarter 2015 Financial Performance

For the second quarter of 2015, revenue increased by 7.7% year-over-year to RMB720.6 million ($117.9 million) from RMB668.9 million in the same period of 2014. The increase in revenue was mainly attributable to higher sales volume in edible alcohol and its by-products.

Revenue breakdown by product lines is as follows:

  • Revenue from edible alcohol increased by 11.2% to RMB473.8 million ($77.5 million) in the second quarter of 2015, compared to RMB425.9 million in the second quarter of 2014. The sales volume of edible alcohol in the second quarter of 2015 increased by 11.2% year-over-year to 92,864 tons, and the average selling price of edible alcohol was unchanged at RMB5,102 per ton.
  • Revenue from DDGS Feed increased slightly by 0.1% to RMB159.9 million ($26.2 million) in the second quarter of 2015, compared to RMB159.8 million in the second quarter of 2014. The sales volume of DDGS Feed in the second quarter of 2015 increased by 11.1% year-over-year to 82,418 tons, while the average selling price decreased by 10.0% year-over-year to RMB1,940 per ton.
  • Revenue from liquid carbon dioxide decreased by 53.8% to RMB5.2 million ($0.8 million) in the second quarter of 2015, compared to RMB11.4 million in the second quarter of 2014. The sales volume of liquid carbon dioxide in the second quarter of 2015 increased by 6.4% year-over-year to 34,837 tons, while the average selling price decreased by 56.5% year-over-year to RMB151 per ton.
  • Revenue from crude corn oil decreased by 3.3% to RMB46.9 million ($7.7 million) in the second quarter of 2015, compared to RMB48.5 million in the second quarter of 2014. The sales volume of crude corn oil in the second quarter of 2015 increased by 7.2% year-over-year to 7,233 tons, while the average selling price decreased by 9.8% year-over-year to RMB6,483 per ton.
  • Revenue from chlorinated polyethylene (CPE) increased by 63.2% to RMB34.8 million ($5.7 million) in the second quarter of 2015, compared to RMB21.3 million in the second quarter of 2014. The sales volume of CPE in the second quarter of 2015 increased by 66.5% year over year to 4,075 tons, while the average selling price decreased by 2.0% to RMB8,547 per ton.

During the second quarter of 2015, gross profit increased by 29.8% to RMB87.7 million ($14.3 million) from RMB67.5 million in the same period of 2014. Gross margin for the second quarter of 2015 increased to 12.2%, from 10.1% in the same period of 2014, which was primarily attributable to the decrease in average corn cost, partly offset by the decrease in average selling price of by-products.

Operating income increased by 30.8% to RMB72.3 million ($11.8 million) in the second quarter of 2015, from RMB55.3 million in the same period of 2014, primarily attributable to higher gross profit earned.

Selling expenses increased by RMB0.4 million, or 21.6% to RMB1.9 million ($0.3 million) in the second quarter of 2015, from RMB1.5 million in the same period of 2014, which increased in line with the sales volume.

General and administrative expenses increased by RMB2.8 million, or 26.2% to RMB13.5 million ($2.2 million) in the second quarter of 2015, from RMB10.7 million in the same period of 2014.

Income tax expenses in the second quarter of 2015 were RMB12.7 million ($2.1 million), representing an effective tax rate of 25.0%.

Net income increased by 81.7% to RMB38.1 million ($6.2 million) in the second quarter of 2015, compared to RMB21.0 million in the same quarter of 2014. In the second quarter of 2015, basic and diluted earnings per share and per ADS were RMB1.48 ($0.24), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

As of June 30, 2015, cash and bank deposits of RMB496.1 million ($81.1 million) decreased by RMB334.3 million, compared with RMB830.4 million as of December 31, 2014. Cash flows used in operating activities for the second quarter of 2015 were RMB59.0 million ($9.7 million), which was mainly due to the increase in inventories.

Financial Outlook

The Company estimates that its revenue for the third quarter of 2015 will be in the range of RMB630 million ($103.0 million) to RMB670 million ($109.6 million), an increase of approximately 19.1% to 26.6% over the same quarter of 2014.

This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

Borun's management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. E.T. on Wednesday, August 12, 2015 (8:00 p.m. Beijing time on Wednesday, August 12, 2015) to discuss the results and highlights from the second quarter of 2015 and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:

United States Toll Free:

1-866-519-4004

US Toll/International:

1-845-675-0437

Hong Kong Toll Free:

800-906-601

Hong Kong Toll:

852-3018-6771

China Toll Free:

800-819-0121

China Toll Free (Mobile):

400-620-8038

Conference ID:

93908929

A replay of the webcast will be accessible through August 20, 2015 on http://ir.chinanewborun.com or by dialing:

United States toll free:

1-855-452-5696

International:

61-2-8199-0299

Passcode

93908929

About China New Borun Corporation

China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE and foam insulation that are widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at http://www.sec.gov.

Forward-looking Statements

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

Contact Information

Asia Bridge Capital Limited Wendy Sun Phone: +86-10-8556-9033 (China) +1-888-870-0798 (U.S.) Email: wendy.sun@asiabridgegroup.com

[1]

This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the quarter ended June 30, 2015 were made at a rate of RMB6.1136 to USD1.00, the rate published by the People's Bank of China on June 30, 2015. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all.

 

 

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

December 31, 2014

June 30, 2015

RMB

RMB

US$

Assets

Cash

830,430,168

496,058,045

81,140,088

Restricted cash

62,370,000

20,000,000

3,271,395

Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively

531,480,981

476,548,904

77,948,983

Held-to-maturity debt securities

98,720,762

16,147,730

Inventories

496,754,625

756,230,968

123,696,507

Advance to suppliers

52,577,513

398,501

65,183

Other receivables

73,593,217

130,973,945

21,423,375

Prepaid expenses

4,562,333

1,881,997

307,838

Total current assets

2,051,768,837

1,980,813,122

324,001,099

Property, plant and equipment, net

1,096,055,659

1,058,919,284

173,207,158

Land use right, net

136,125,360

134,709,071

22,034,329

Intangible assets, net

5,822,528

3,909,406

639,461

Other non-current assets

5,562,810

3,649,726

596,985

Total assets

3,295,335,194

3,182,000,609

520,479,032

Liabilities and shareholders' equity

Trade accounts payable

17,055,679

13,316,381

2,178,157

Accrued expenses and other payables

86,729,443

62,302,341

10,190,777

Income taxes payable

6,205,515

16,935,689

2,770,166

Short-term borrowings

901,000,000

943,200,000

154,278,985

Current portion of long-term borrowings

24,000,000

24,000,000

3,925,674

Bonds Payable

500,000,000

320,000,000

52,342,319

Total current liabilities

1,534,990,637

1,379,754,411

225,686,078

Long-term borrowings

84,000,000

72,000,000

11,777,022

Total liabilities

1,618,990,637

1,451,754,411

237,463,100

Shareholders' equity

Ordinary share – (December 31, 2014 and June 30, 2015: par value of RMB0.0068259, 25,725,000 shares issued and outstanding)

175,596

175,596

25,725

Additional paid-in capital

468,132,187

468,132,187

76,572,263

Retained earnings – appropriated

134,277,095

134,277,095

21,963,670

Retained earnings – unappropriated

1,074,210,923

1,128,112,247

184,525,034

Accumulated other comprehensive loss

(451,244)

(450,927)

(70,760)

Total shareholders' equity

1,676,344,557

1,730,246,198

283,015,932

Total liabilities and shareholders' equity

3,295,335,194

3,182,000,609

520,479,032

 

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

For the three-month period ended,

June 30,  2014

March 31, 2015

June 30,  2015

(RMB)

(RMB)

    (RMB)

(US$)

Revenues

668,887,775

570,925,219

720,638,443

117,874,647

Cost of goods sold

601,348,437

511,689,155

632,954,711

103,532,241

Gross profit

67,539,338

59,236,064

87,683,732

14,342,406

Operating expenses:

   Selling

1,534,527

1,202,672

1,866,280

305,267

General and administrative

10,703,722

11,813,709

13,506,488

2,209,253

Total operating expenses

12,238,249

13,016,381

15,372,768

2,514,520

Operating income

55,301,089

46,219,683

72,310,964

11,827,886

Other (income) expenses:

Interest income

(637,612)

(2,263,389)

(4,017,821)

(657,194)

Interest expense

26,695,034

26,409,354

24,018,082

3,928,632

Others, net

1,273,848

1,025,752

1,490,237

243,757

Total other expense, net

27,331,270

25,171,717

21,490,498

3,515,195

Income before income taxes

27,969,819

21,047,966

50,820,466

8,312,691

Income tax expense

6,992,455

5,261,992

12,705,116

2,078,173

Net income

20,977,364

15,785,974

38,115,350

6,234,518

Earnings per share:

Basic and diluted

0.82

0.61

1.48

0.24

Weighted average ordinary shares outstanding:

Basic and diluted

25,725,000

25,725,000

25,725,000

25,725,000

 

 

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

For the six-month period ended,

June 30, 2014

June 30, 2015

(RMB)

(RMB)

(US$)

Revenues

1,294,618,856

1,291,563,662

211,260,740

Cost of goods sold

1,136,596,378

1,144,643,866

187,229,107

Gross profit

158,022,478

146,919,796

24,031,633

Operating expenses:

Selling

2,749,478

3,068,952

501,988

General and administrative

21,194,588

25,320,197

4,141,618

Total operating expenses

23,944,066

28,389,149

4,643,606

Operating income

134,078,412

118,530,647

19,388,027

Other (income) expenses:

Interest income

(1,162,947)

(6,281,210)

(1,027,416)

Interest expense

52,719,992

50,427,436

8,248,403

Others, net

2,129,418

2,515,989

411,540

Total other expense, net

53,686,463

46,662,215

7,632,527

Income before income taxes

80,391,949

71,868,432

11,755,500

Income tax expense

20,097,988

17,967,108

2,938,875

Net income

60,293,961

53,901,324

8,816,625

Earnings per share:

Basic and diluted

2.34

2.10

0.34

Weighted average ordinary shares outstanding:

Basic and diluted

25,725,000

25,725,000

25,725,000

 

SOURCE China New Borun Corporation



RELATED LINKS

http://www.chinanewborun.com