|By Marketwired .||
|November 22, 2012 09:03 AM EST||
TORONTO, ONTARIO -- (Marketwire) -- 11/22/12 -- Changfeng Energy Inc. ("Changfeng" or the "Company") (TSX VENTURE:CFY), a natural gas utility in China, today reported its unaudited interim consolidated financial results for the third quarter ended September 30, 2012. All figures are in Canadian dollars unless otherwise stated. The unaudited interim consolidated financial statements and Management Discussion and Analysis can be downloaded from www.SEDAR.com or from the Company's website at www.changfengenergy.com.
Summary of Q3 2012 Consolidated Financial Results ---------------------------------------------------------------------------- (in thousands in $Cdn) except Q3 Q3 YTD YTD percentages and Change % Change % per share data 2012 2011 2012 2011 ---------------------------------------------------------------------------- Revenue 7,929 5,936 1,993 34% 22,416 19,247 3,169 16% Gross profit 3,164 2,059 1,105 54% 10,488 7,424 3,064 41% EBITDA (note a) 1,349 612 737 120% 5,603 3,389 2,214 65% Net income (loss) 55 -326 381 117% 1,707 484 1,223 253% Adjusted net income (loss) (note b) 55 -326 381 117% 1,074 484 590 122% Basic and diluted EPS 0.001 -0.005 0.006 120% 0.026 0.008 0.018 225% ----------------------------------------------------------------------------
(a) This is a non-GAAP financial measure. The definition and reconciliation of GAAP to this non-GAAP financial measure are included in the Management Discussion and Analysis, under the heading "Non-GAAP Financial Measures".
(b) The adjusted net income excludes a one-time government grant of $722,535 and associated income tax provision of $90,000.
Revenue for the third quarter of 2012 was $7.9 million, an increase of $2.0 million, or 34%, from $5.9 million for the same quarter in 2011. Revenue for the nine months ended September 30, 2012 was $22.4 million, an increase of $3.2 million, or 16%, from $19.2 million for the same period in 2011. The increases in revenue during the quarter and YTD of 2012 versus the same periods last year are mainly attributable to continued gas volume growth (109% in Q3'12 and 115% YTD) and a 15% price increase from the CNG refueling retail station. Piped gas sales from its operation in the Sanya Region for the quarter and YTD of 2012 were relatively flat compared to the same periods of 2011 due to limited sources of gas supply. Pipeline connection fees from its operation in the Sanya Region for the quarter and YTD of 2012 increased by 40% and 17%, respectively, compared to the same periods of 2011 due to an increase in the number of residential customers and an increase in certain higher-value commercial customers despite fewer commercial connections.
Gross profit for the third quarter of 2012 increased by $1.1 million (or 54%) and for the nine months ended September 30, 2012 increased by $3.1 million (or 41%), compared to the same periods of 2011. Gross profit as a percentage of sales for the third quarter and nine months of 2012 increased by 5% to 40% and by 8% to 47%, respectively, compared to the same periods of 2011. CNG refueling retail station gross margins year- over-year improved 9% due primarily to sale price increases and lower operating costs as a result of gas volume increase. Piped gas gross margins year-over-year improved 6% reflecting the reduced volume of gas purchased at market rate prices. Pipeline connection fee margins year-over-year improved 19% due to higher-value commercial customers.
General and administrative expenses for the third quarter of 2012 increased by $0.3 million (or 22%) to $1.7 million and for the nine months ended September 30, 2012 increased by $0.9 million (or 24%) to $4.4 million, compared to the same periods of 2011. The increases were attributable to general expenses increases including employee salary and benefits as a result of a high inflation rate in China, and sales increases. General and administrative expense as a percentage of sales for the quarter of 2012 decreased by 2% to 21%, and for the nine months ended September 30, 2012 increased by 1% to 20%, compared to the same periods of 2011.
Travel and business development expenses for the third quarter of 2012 increased by $0.2 million (or 28%) to $0.8 million and for the nine months ended September 30, 2012 increased by $1.0 million (or 50%) to $2.9 million, compared to the same periods of 2011. The increases were attributable to the travel and business development activities in mainland China as the Company seeks to develop new projects in close proximity to the new national pipelines. Included in this amount was a $0.2 million one-time sponsorship fee for a provincial-level table tennis tournament. The majority of the travel and business development expenses did not relate to the Company's business in the Sanya Region or the CNG retail station but instead related to projects under consideration or development in mainland China.
Earnings before interest, tax, depreciation and amortization ("EBITDA") as defined in the Management Discussion and Analysis for the third quarter of 2012 increased by $0.7 million, or 120%, to $1.4 million and for the nine months ended September 30,2012 increased by $2.2 million, or 65%, to $5.6 million, compared to the same periods of 2011. The increases were primarily attributable to the reasons noted above relating to the sales increases, higher gross margins and a $0.7 million one-time government grant, partially offset by higher operating expenses.
Net income (loss)
The net income for the third quarter of 2012 was $0.06 million or $0.001 per basic and diluted share compared to a net loss of $0.3 million or -$0.005 per basic and diluted share for the same period in 2011, primarily due to the reasons stated above. The net income for the nine months ended September 30, 2012 was $1.7 million, or $0.026 per basic and diluted share compared to $0.5 million or $0.008 per basic and diluted share for the same period of 2011.
Cash increased by $0.1 million to $5.2 million at September 30, 2012 from $5.1 million at December 31, 2011, primarily from cash provided by operating activities of $4.8 million and a government grant of $0.8 million, offset by cash used for capital expenditures of $1.4 million and $0.6 million of principal repayments of the bank term loans.
Working capital deficit as at September 30, 2012 was $10.4 million, relatively constant when compared to $10.7 million as at December 31, 2011.
The adjusted working capital as defined in the Management Discussion and Analysis under the heading "Non-GAAP Financial Measures" was $4.5 million as at September 30, 2012, compared to $2.4 million as at December 31, 2011.
Xiangdong project, Xiangdong District, Pingxiang City, Jiangxi Province
The Company continues to accelerate the first phase of construction at Xiangdong. Currently, the Company has completed construction of the 7km main pipelines and site preparation for construction of the citygate in the Park, and it is expected that the Company will be able to supply gas for the ceramic manufacturers in the Park by late 2012 upon completion of the first phase of construction. In addition, the Company is negotiating with a local bank for financing related to upcoming second phase of construction.
On October 30, 2012, the Company entered into its first pipeline installation contract with a local real estate developer. It is expected that the Company will supply gas for a condominium located in the downtown district with a total of 400 units by May 2013, depending upon the progress of construction of the condominium which is currently under construction.
A 24 kilometer pipeline connecting the Company's citygate to the existing intra-provincial pipeline network will be built by a state-owned company. Construction of this pipeline is postponed to mid-2013 subject to the approval of the development by the state-owned company. Once the pipeline is built, it will ship the gas from the PetroChina's Second West-East Pipeline to the Xiangdong district. Before that, the Company will purchase CNG to supply to its customers in this area. The gas quota as previously announced on November 23, 2011 will be saved and accumulated until the Company can access to the gas from the PetroChina's Second West-Ease Pipeline.
On November 13, 2012, the Company received the land use right for an 18-mu (approximately 1.20 hectare) parcel of land which is being used for the Company to construct a citygate for this project.
Sanya Operation, Sanya City, Hainan Province
In connection with the Gas & Electricity Exchange Program (the "Program") as previously announced on February 22, 2012 and April 30, 2012, a total of $0.4 million (RMB 2.4 million) has been paid as of September 30, 2012 for the first phase of construction of the Program. The completion of the first phase of construction is delayed to early 2013 due to certain engineering design modifications.
In addition, the Company's application to raise the sales prices for its commercial customers is waiting for the final approval by the Hainan Provincial Pricing Bureau. The price increase application was made based on the long term Budget Process previously announced on June 27, 2012 that was approved by Sanya Municipal government as part of the solution to address the gas shortage issue in the Sanya Region.
Proposed Joint Venture for the Pipeline Project, Guangdong Province
During the quarter, the Company continued to work on the proposed joint venture with the subsidiary of PetroChina as previously announced on March 29, 2012. An arm's- length pipeline project research firm has finalized a project feasibility study for supplying gas for one of the targeted industrial customers in these regions. The establishment of the proposed joint venture is subject to the approval by PetroChina after review of the feasibility study.
The proposed joint venture will build, own and operate natural gas pipelines to connect the potential industrial customers to an existing and/or planned intra-provincial pipeline network within four (4) cities in west Guangdong area. Those four (4) cities include Zhaoqing City, Foshan City, Zhuhai City and Jiangmen City.
CNG Refuelling Station, Changsha City, Hunan Province
On October 24, 2012, the Company reached an agreement with the existing shareholder of Hunan CNPC Guangda Gas Co., Ltd. ("Guangda Gas") for return of the good faith deposit in amount of RMB1.0 million (approx.$0.2 million) that was advanced in early 2010 in connection with the proposed acquisition of Guangda Gas. The good faith deposit will be repaid to the Company by way of partially offsetting gas purchase to be made from Guangda Gas over a ten-month period starting in November 2012.
Guangda Gas owns and runs a CNG wholesales station in the Changsha City and has been one of gas suppliers for the Company's CNG refueling retail station in the city.
Due to favorable market conditions after the PetroChina's Second West-East Pipeline commenced supplying gas for this region, the gas shortage situation has been significantly alleviated. As a result, the Company has no intention of proceeding with this proposed acquisition of Guangda Gas.
"We are pleased with our financial performance achieved for this quarter. We are also very pleased to see the progress we made to address the gas shortage issue in the Sanya Region, and the progress on our other projects under development in Mainland China, especially on the Xiangdong Project and Guangdong Project," stated Mr. Huajun Lin, Chairman and CEO of the Company. "We have nearly completed the first phase of construction of the Xiangdong Project, and remain on target to commence supply of gas for the Park in 2012. In addition, we are optimistic about the proposed joint venture with a subsidiary of PetroChina and see a tremendous opportunity ahead from the Guangdong Project."
About Changfeng Energy Inc.
Changfeng Energy Inc., is a local natural gas distribution company ("LDC" or natural gas utility) with operations located throughout the southern part of People's Republic of China. The Company serves industrial, commercial and residential customers, providing them with natural gas for heating purposes and fuel for transportation. The Company has developed a significant natural gas pipeline network as well as urban gas delivery networks, stations, substations and gas pressure regulating stations in Sanya City & Haitang Bay. Through its network of pipelines, the Company provides safe and reliable delivery of natural gas to both homes and businesses. The Company is headquartered in Toronto, Ontario and its shares trade on the Toronto Venture Exchange under the trading symbol "CFY". For more information, please visit the Company website at www.changfengenergy.com.
Information set forth in this news release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document 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. 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. 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 TSXV) accepts responsibility for the adequacy or accuracy of this release.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
Dec. 21, 2014 02:00 PM EST Reads: 2,385
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 21, 2014 01:00 PM EST Reads: 2,011
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
Dec. 21, 2014 11:30 AM EST Reads: 2,427
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
Dec. 21, 2014 10:00 AM EST Reads: 2,163
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
Dec. 21, 2014 08:30 AM EST Reads: 2,298
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...
Dec. 21, 2014 06:15 AM EST Reads: 2,136
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
Dec. 20, 2014 11:00 PM EST Reads: 1,391
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 08:00 AM EST Reads: 1,399
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Dec. 18, 2014 09:45 PM EST Reads: 1,262
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 18, 2014 09:00 AM EST Reads: 1,390
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
Dec. 18, 2014 06:00 AM EST Reads: 941
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
Dec. 17, 2014 11:15 PM EST Reads: 1,437
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 11:00 PM EST Reads: 1,474
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 08:00 PM EST Reads: 1,459
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Dec. 17, 2014 06:30 PM EST Reads: 1,410
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
Dec. 17, 2014 11:45 AM EST Reads: 1,572
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Dec. 16, 2014 11:45 PM EST Reads: 1,419
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
Dec. 15, 2014 11:45 PM EST Reads: 1,756
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Dec. 15, 2014 10:30 AM EST Reads: 6,930
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
Dec. 15, 2014 10:00 AM EST Reads: 1,994