|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.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Sep. 26, 2016 01:15 PM EDT Reads: 3,277
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...
Sep. 26, 2016 01:00 PM EDT Reads: 1,603
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Sep. 26, 2016 12:45 PM EDT Reads: 2,028
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. 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 dev...
Sep. 26, 2016 12:45 PM EDT Reads: 3,408
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Sep. 26, 2016 12:45 PM EDT Reads: 1,729
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Sep. 26, 2016 12:15 PM EDT Reads: 1,664
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Sep. 26, 2016 12:00 PM EDT Reads: 2,782
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 26, 2016 11:30 AM EDT Reads: 991
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
Sep. 26, 2016 11:30 AM EDT Reads: 2,571
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Sep. 26, 2016 11:30 AM EDT Reads: 2,537
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Sep. 26, 2016 11:15 AM EDT Reads: 2,865
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
Sep. 26, 2016 11:06 AM EDT Reads: 156
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...
Sep. 26, 2016 11:00 AM EDT Reads: 989
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Sep. 26, 2016 10:30 AM EDT Reads: 893
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Sep. 26, 2016 10:00 AM EDT Reads: 1,003
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Sep. 26, 2016 10:00 AM EDT Reads: 2,688
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Sep. 26, 2016 09:45 AM EDT Reads: 2,864
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Sep. 26, 2016 09:00 AM EDT Reads: 1,529
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 26, 2016 08:15 AM EDT Reads: 1,545
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
Sep. 26, 2016 08:15 AM EDT Reads: 2,502