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CF Energy Announces Financial Results For The Six-Month Period ended June 30, 2020

Written by Customer Service on . Posted in Public Companies.

TORONTO, Aug. 28, 2020 (GLOBE NEWSWIRE) — CF Energy Corp., (TSX-V: CFY) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), an energy provider in the People’s Republic of China (the ”PRC” or “China”), announces that the Company has filed its unaudited condensed interim consolidated financial results for the six-month period ended June 30, 2020 (“1H 2020”).
Results for the six-month period ended June 30, 2020Against the backdrop of business and economic recovery being at its early stage after the relaxation of quarantine and travel restrictions in China with the abatement of COVID-19, the adverse impact of COVID-19 which affected the three-month period ended March 31, 2020 has continued to affect the overall revenue, gas sales volume and results of the Group for the three-month period ended June 30,2020 (“Q2 2020”).Revenue in 1H 2020 was RMB155.8 million (approx. CAD30.2 million), a decrease of RMB54.2 million (approx. CAD11.1 million), or 26%, from RMB210.0 million (approx. CAD41.3 million) for the six-month period ended June 30, 2019 (“1H 2019”). Gross profit for 1H 2020 was RMB55.4 million (approx. CAD10.8  million), a decrease of RMB23.2 million (approx. CAD4.7 million), or 30%, from RMB78.6 million (approx. CAD15.5 million) in 1H 2019. Gross profit margin in 1H 2020 was 35.6%, a decrease of 1.9 percentage points as compared to 37.5% in 1H 2019.Net profit in 1H 2020 was RMB14.6 million (approx. CAD2.8 million), a decrease of RMB1.5 million (approx. CAD0.3 million), or 9%, from RMB16.1 million (approx. CAD3.1 million) in 1H 2019. EBITDA in 1H 2020 was RMB34.6 million (approx. CAD6.8 million), a decrease of RMB4.4 million (approx. CAD0.9 million), or 11% from RMB39.0 million (approx. CAD7.7 million) in 1H 2019.Comparison of results for the second quarter of 2020 and 2019Revenue in Q2 2020 was RMB88.4 million (approx. CAD17.2 million), a decrease of RMB13.8 million (approx. CAD2.9 million), or 14%, from RMB102.2 million (approx. CAD20.1 million) for the second quarter of 2019 (“Q2 2019”).  Gross profit for Q2 2020 was RMB28.1 million (approx. CAD10.8  million), a decrease of RMB11.8 million (approx. CAD4.7 million), or 30%, from RMB39.9 million (approx. CAD15.5 million) in Q2 2019. Gross profit margin in Q2 2020 was 31.8%, a decrease of 7.2 percentage points as compared to 39.0% in Q2 2019.   Lower gross profit and margin in Q2 2020 were mainly attributable to lower gas revenue and the change in composition of gas demand from residential and commercial customers which saw an increase in demand from residential customers with lower profit margin while cost of gas for both types of customers was the same.Net loss in Q2 2020 was RMB1.9 million (approx. CAD0.4 million), a decrease of RMB13.2 million (approx. CAD2.6 million), or 117%, from the net profit of RMB11.3 million (approx. CAD2.2 million) for Q2 2019. Net loss in Q2 2020 included a loss in fair value change on derivative financial instrument of RMB10.5 million (approx. CAD2.0 million) in respect of the commitment by the estate of Mr. Lin to subscribe for common shares under a related party loan (please refer to the Related Party Transaction section of the MD&A for more details). On a comparable basis, after excluding the effect of the above-mentioned fair value change on derivative financial instrument, the Company reported a respectable adjusted net profit of RMB8.6 million (approx. CAD1.7 million) in Q2 2020, a decrease of RMB2.7 million (approx. CAD0.5 million), or 24% from RMB11.3 million (approx. CAD2.2 million) in Q2 2019.On a comparable basis, the adjusted EDITDA in Q2 2020 was RMB18.5 million (approx. CAD3.6 million), a decrease of RMB4.4 million (approx. CAD0.9 million), or 19%, from RMB22.9 million  (approx. CAD4.5 million) in Q2 2019.Chairman statementWe are very encouraged to see the momentum of economic recovery continuing to pick up following the abatement of COVID-19 and the lifting of restrictions and quarantine measures in China. While on the one hand, we welcome government measures to stimulate the economy, on the other, the imposition of regulations on energy prices charged to end users exert additional pressure on the business of the Group.Our diversification into the sustainable energy as an integrated energy provider with the investment in the Haitang Bay Smart Energy Project and the electric vehicle (EV) battery swap sector in Hainan have proved to be important and timely. These diversifications will lessen the Group’s sole reliance on the natural gas market which is highly susceptible to the ups and downs of the impact of COVID-19 and government regulatory and policy changes such as recent price restrictions and the pronouncement of the policy for the opening up of the energy market in Hainan Province. We will continue to explore opportunities which such policy changes may bring and take proactive actions to mitigate potential challenges which the Company may face for sustained long-term growth and enhancement of return to our shareholders.The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.SEDAR.com or from the Company’s website at www.cfenergy.com.About CF Energy Corp. (Formerly “Changfeng Energy Inc.”)CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange (“TSX-V”) under the stock symbol “CFY”. It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC. In 2009, CF Energy was recognized as being one of China’s the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSXV for the 2018 year.TELE-CONFERENCEA tele-conference will be held following the release of this press release and the results of the Group, details of which will be provided by way of a separate press release in due course.CONTACT INFORMATIONCorporate Investment Relations
Investor.relations@changfengenergy.cnCharles Wang
Executive Assistant to CEO & Chair of the Board
Zhaoyu.wang@changfengenergy.cnFrederick Wong
Director of the Board
fred.wong@changfengenergy.cnForward-Looking StatementsCertain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”). All statements, other than statements of historical fact, included or incorporated by reference in this document are Forward-Looking Statements, including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future. These Forward-Looking statements can be identified by the use of forward-looking words such as “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe” or “continue” or similar words or the negative thereof. No assurance can be given that the plans, intentions or expectations or assumptions upon which these Forward-Looking Statements are based will prove to be correct and such Forward-Looking Statements included in this news release should not be unduly relied upon.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. Such Forward-Looking Statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such Forward-Looking Statements. These factors include, without limitation, no significant and continuing adverse changes in general economic conditions or conditions in the financial markets. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’s filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider those factors.The Forward-Looking Statements included in this news release 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. 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 TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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