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China New Energy Reports Third Quarter 2009 Financial Result

时间:2019-01-17 作者:AG集&#

TIANJIN, China, Nov. 17 /PRNewswire-Asia-FirstCall/ -- China New Energy Group Company (OTC Bulletin Board: CNER) ("China New Energy" or the "Company"), an energy project developer specializing in development of natural gas distribution networks, and distribution of natural gas in China, announced its financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Highlights

-- Revenue increased 25% year-over-year to $2.8 大发官方娱乐million

-- Gross profit increased 5% year-over-year to $1.8 million

-- Net income totaled $0.5 million

-- Appointed new Chief Financial Officer

"China New Energy continues to achieve strong sales growth as natural gas consumption increases in our target markets," said Mr. Yangkan Chong, Chief Executive Officer. "We have exclusive natural gas distribution rights for three cities in Northern China and our sales have benefited as more and more households in these areas become connected to our distribution network."

Third Quarter Results

For the third quarter of 2009, revenue increased 25% to $2.8 million from $2.3 million in the same quarter a year ago. The growth was primarily attributable to an increase in the number of connected households in the cities where the Company supplies natural gas and operates its gas distribution network.

Gross profit increased 5% to $1.8 million from $1.7 million a year ago. Gross margin was 63%, compared to 74% in the same quarter in 2008. The decrease in gross margin was mainly due to cost reallocation of the depreciation.

Selling, general and administrative ("SG&A") expenses increased 132%, to $0.8 million from $0.4 million during the same period in 2008. As a percentage of revenues, SG&A expenses increased to 28% compared to 15% for the same period in 2008.

Mr. Chong commented, "The increase in our SG&A expense was mainly attributable to the fact that we are preparing to expand our business. We are spending more in areas like business development, outside consultants, and the hiring of additional staff to help strengthen the Company’s internal controls. We view this increased expenditure as an investment in ensuring the long-term growth of China New Energy and believe that it will ultimately help the Company achieve increased revenue growth and profitability."

Net income was $0.5 million for the third quarter, down 45% from $0.9 million for the same period of 2008, as a result of the factors described above.

Nine Month Results

Revenue for the first nine months of 2009 was $6.0 million, up 40% from $4.2 million a year ago, which was mainly attributable to an increase in the number of connected households and an increase in natural gas consumption. Gross profit was $3.9 million, or 66% of revenue, up 26% from $3.1 million, or 73% of revenue, in the same period of 2008. The decrease in the gross margin was mainly due to cost reallocation of the depreciation. SG&A expenses increased to $2.0 million, or 33% of revenue, up from $0.8 million, or 19% of revenue during the same period of 2008. As a result, operating income for the nine months was $2.0 million or 33% of revenues, compared to $2.3 million or 54% of revenues in the same period of 2008. Net income for the nine months was $1.1 million compared to $1.8 million for the same period of 2008.

Financial Condition

As of September 30, 2009, the Company had cash and cash equivalents of $4.9 million and working capital of $9.9 million. For the nine months ended September 30, 2009, the company had $5.8 million of capital expenditures, which was mainly for the construction of gas pipelines, gas stations and acquisitions. Shareholders’ equity was $27.8 million as of September 30, 2009.

Recent Developments

The Company appointed Mr. Eric Yu as Chief Financial Officer, effective on September 28, 2009. Mr. Yu replaces Mr. Peng Mun Foo, who left the Company for personal reasons. Mr. Yu most recently served as the CFO of an OTC Bulletin Board U.S.-listed Chinese company and has worked as a CFO or Financial Controller for almost ten years of which two were in the gas business.

Business Outlook

Mr. Chong concluded, "As China continues to undergo rapid urbanization and increasingly moves towards more environmentally friendly fuels, it is anticipated that the use of natural gas will continue to grow. Our strategy for capitalizing on this opportunity is to continue to focus on under-penetrated, growing small- and medium-sized cities where we can enter into favorable franchise agreements with local governments that grant us long-term exclusive rights to develop the local natural gas distribution network and supply natural gas in their area. We already have such agreements in Acheng, Dashiqiao, and Nandaihe. By focusing on these types of markets, we can help avoid competition as currently very few of these small- and medium-size cities have access to natural gas. Our business development team is actively exploring and evaluating potential areas for development of new distribution networks and opportunities for expansion of our existing distribution networks."

About China New Energy Group Company

China New Energy Group Company ("China New Energy" or the "Company") is a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China. The Company generates revenues primarily from the connection fees it charges its customers for interconnecting to pipelines in its natural gas distribution networks, and fees for natural gas usage. The Company currently has exclusive natural gas distribution rights for Acheng, Dashiqiao, and Nandaihe, three cities located in Northern China. For more information, please visit http://www.cnegc.com/ .

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company’s ability to access natural gas for distribution, and ability to identify and develop operational locations under favorable terms, changes in natural gas pricing mechanism imposed by the Chinese government, changes in the regulatory environment and future national or regional economic and competitive conditions, and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

-FINANCIAL TABLES FOLLOW-

CHINA NEW ENERGY GROUP COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

September 30, December 31,

2009 2008

(Unaudited)

ASSETS

CURRENT ASSETS

Cash and cash equivalents $4,878,751 $5,612,356

Restricted cash 196,873 221,152

Accounts receivable 3,925,491 2,183,087

Other receivables 2,159,614 2,254,997

Inventories, net 285,787 254,585

Prepayment 784,953 1,558,361

Other current assets 94,017 3,340

Total current assets 12,325,486 12,087,878

Property, plant and equipment, net 7,676,229 6,844,262

Construction in progress 8,447,645 5,589,551

Related party receivable -- 84,120

Intangible assets 1,804,658 1,814,316

TOTAL ASSETS $30,254,018 $26,420,127

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Accounts payable $276,117 $111,660

Accrued expenses 277,271 256,071

Accruals and other payable-Third

Party 526,837 3,144,043

Tax payable 523,770 693,116

Related party payable 97,888 --

Dividend payable on preferred stock 744,946 194,000

TOTAL CURRENT LIABILITIES 2,446,829 4,398,890

China New Energy’s Stockholders’ equity:

Preferred Stock: 10,000,000 shares

authorized, $0.001 par value, 2,973,761

and 1,857,373 shares issued and

outstanding as of September 30, 2009

and December 31, 2008, respectively 2,973 1,857

Common Stock: 500,000,000 shares

authorized, $0.001 par value,

100,000,041 shares issued and

outstanding as of September 30,

2009 and December 31, 2008, respectively 100,000 100,000

Additional paid in capital 27,269,163 19,725,482

Accumulated (deficit) (2,382,613) (619,357)

Statutory surplus reserve fund 1,903,034 1,903,034

Accumulated other comprehensive

income 693,939 730,168

Total China New Energy’s Stockholders’

equity 27,586,496 21,841,184

Non-controlling interest 220,693 180,053

TOTAL EQUITY 27,807,189 22,021,237

TOTAL LIABILITIES AND EQUITY $30,254,018 $26,420,127

CHINA NEW ENERGY GROUP COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - (UNAUDITED)

(Stated in US Dollars)

For the Three months ended For the nine months ended

September 30, September 30,

2009 2008 2009 2008

Revenues:

Connection

services $2,659,930 $2,092,445 $5,433,912 $3,846,773

Natural gas 157,344 161,413 518,970 390,214

2,817,274 2,253,858 5,952,882 4,236,987

Cost of Sales:

Connection

services 683,068 454,061 1,376,630 833,644

Natural gas 367,411 121,565 649,622 295,257

1,050,479 575,626 2,026,252 1,128,901

Gross Profit 1,766,795 1,678,232 3,926,630 3,108,086

Operating Expenses:

Selling, general

and administrative

expenses 802,011 346,094 1,962,698 813,975

Total operating

expenses 802,011 346,094 1,962,698 813,975

Operating income 964,784 1,332,138 1,963,932 2,294,111

Other Income

(Expenses):

Interest Income 10,680 -- 20,307 --

Interest

(expense) (3,699) -- (4,370) --

Other Income 5,558 3,702 5,651 9,974

Total other income 12,539 3,702 21,588 9,974

Income from continuing

operations, before

tax 977,323 1,335,840 1,985,520 2,304,085

Income Taxes 461,013 391,358 828,800 705,244

Income from continuing

operations, net of

tax 516,310 944,482 1,156,720 1,598,841

Income (loss) from

discontinued

operations, net of

tax -- (7,116) -- 223,410

Net Income 516,310 937,366 1,156,720 1,822,251

Net (Income)

attributable to

non controlling

interest (25,104) (37,009) (18,200) (46,277)

Net Income

attributable to

China New Energy

Group $491,206 $900,357 $1,138,520 $1,775,974

Other Comprehensive

income:

Net Income 516,310 937,366 1,156,720 1,822,251

Foreign currency

translation (42,159) 37,114 (41,854) 377,403

Comprehensive

income attributable

to the Non-controlling

interest 251 -- (12,026) --

Comprehensive income

attributable to

China New Energy

Group $474,402 $974,480 $1,102,840 $2,199,654

Income (Loss) per

share - Basic &

diluted:

Income (Loss) from

continuing operations

attributable to the

Company’s common

stockholders $0.00 $(0.06) $(0.02) $(0.05)

Discontinued operations

attributable to the

Company’s common

stockholders $0.00 $0.00 $0.00 $0.00

Net income (loss)

attributable to the

Company’s common

stockholders $0.00 $(0.06) $(0.02) $(0.05)

Weighted average

common shares

outstanding:

Basic 100,000,041 100,000,041 100,000,041 98,321,560

Diluted 209,495,669 132,839,829 200,655,139 110,255,834

CHINA NEW ENERGY GROUP COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)

(Stated in US Dollars)

For The Nine Months Ended

September 30,

2009 2008

Cash flows from operating activities:

Net income attributable to China New

Energy Group Company $1,138,520 $1,775,974

Income attributable to non-controlling

interest 18,200 27,371

Adjustments to reconcile net income to

net cash used in operating

activities:

Depreciation 277,476 125,592

Amortization 9,572 6,429

Changes in operating assets and

liabilities:

Accounts receivable (1,741,568) (374,181)

Other receivables 205,909 (650,954)

Inventories (31,228) 174,757

Prepayment 772,557 --

Other current assets (90,613) --

Accounts payable 164,360 (398,948)

Accrued expenses 21,251 --

Accruals and other payable-Third Party (710,835) (790,089)

Taxes payable (169,093) (397,601)

Net cash used in operating activities (135,492) (501,650)

Cash flows from investing activities

Addition of construction in progress (2,857,106) (960,375)

Addition of fixed assets (1,110,147) (97,692)

Payments made to acquire subsidiary (1,838,946) --

Acquisition of an associated company -- 483,512

Net cash used in investing activities (5,806,199) (574,555)

Cash flows from financing activities

Repayment of cash advanced from

director -- (210,711)

Issued preferred stock 4,752,140 9,000,000

Payment of offering costs associated

with preferred stock -- (1,507,144)

Contribution from former

non-controlling interest 439,060 --

Loan from related parties 24,279 --

Net cash flows provided by financing

activities 5,215,479 7,282,145

Effect of exchange rate changes in

cash (7,393) (1,308,366)

Net increase (decrease) in cash (733,605) 4,897,574

Cash - beginning of year 5,612,356 2,311,028

Cash - end of year $4,878,751 $7,208,602

Supplemental disclosure of cash flow

information:

Interest paid in cash $4,370 $--

Income taxes paid in cash $522,594 $--

Supplemental disclosure of non-cash

investing and financing activities:

Accrued dividend of preferred stock $550,946 $--

For more information, please contact:

Company Contact:

Eric Yu, Chief Financial Officer

Email: ericyu@cnegc.com

Web: http://www.cnegc.com

Investor Relations Contact:

CCG Investor Relations

Mr. Athan Dounis, Account Manager

Phone: +1-646-213-1916

Email: athan.dounis@ccgir.com

Mr. Crocker Coulson, President

Phone: +1-646-213-1915 (New York)

Email: crocker.coulson@ccgir.com

Web: http://www.ccgirasia.com

本文源自: AG环亚官网

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