Yahoo Finance CF Energy Announces Financial Results For The Year Ended December 31, 2021
TORONTO, April 29, 2022 (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 audited consolidated financial results for the year ended December 31, 2021.
Results for the year ended December 31, 2021
In millions | 2021 | 2020 | Change | % | 2021 | 2020 | Change | % | ||||||||
(except for % figures) | RMB | RMB | RMB | CAD | CAD | CAD | ||||||||||
Continuing Operations | ||||||||||||||||
Revenue | 355.2 | 340.3 | 14.9 | 4 | % | 69.0 | 66.2 | 2.8 | 4 | % | ||||||
Gross Profit | 134.0 | 139.0 | (5.0 | ) | -4 | % | 26.0 | 27.0 | (1.0 | ) | -4 | % | ||||
Gross Profit Margin | 37.7 | % | 40.9 | % | -3.2 | % | 37.7 | % | 40.9 | % | -3.2 | % | ||||
Net Profit | 21.7 | 52.7 | (31.0 | ) | -59 | % | 4.2 | 10.2 | (6.0 | ) | -59 | % | ||||
Adjusted net Profit | 25.5 | 38.0 | (12.5 | ) | -33 | % | 5.0 | 7.3 | (2.3 | ) | -33 | % | ||||
EBITDA | 77.4 | 98.6 | (21.2 | ) | -21 | % | 15.0 | 19.2 | (4.1 | ) | -21 | % | ||||
Adjusted EBITDA | 81.2 | 83.9 | (2.7 | ) | -3 | % | 15.8 | 16.3 | (0.5 | ) | -3 | % | ||||
Revenue in 2021 was RMB355.2 million (approx. CAD69.0 million), an increase of RMB14.9 million (approx. CAD2.8 million), or 4%, from RMB340.3 million (approx. CAD66.2 million) in 2020. With the resurgence of the outbreak of COVID-19 confirmed cases in China around the end of July 2021, the Central Government had re-instated certain travel restrictions which led to a drop in demand for natural gas in Sanya City in the month of August 2021 and worsened in September 2021. Such drop in sales volume from commercial customers and the resultant decrease in gas sales revenue for the third quarter of 2021 had carried forward to impact the last quarter of 2021, which eroded part of the increase of revenue in the first half of 2021. This resulted in an overall marginal increase in commercial customers and total revenue of gas sales for the whole of 2021 as compared to 2020.
Gross profit in 2021 was RMB134.0 million (approx. CAD26.0 million), a decrease of RMB5.0 million (approx. CAD1.0 million), or 4%, from RMB139.0 million (approx. CAD27.0 million) in 2020. Gross margin in 2021 was 37.7%, a decrease of 3.2 percentage points as compared to 40.9% in 2020. Lower gross profit and margin in 2021 were mainly attributable to the higher gross profit margin for revenue from commercial customers in pipeline connection which was offset by the lowering of gas selling price as a result of further price control imposed by the Sanya government which commenced from September 1, 2021 and the raise in purchase price of LNG which could not be fully transferred to our customers in Sanya CNG vehicle station.
In millions | 2021 | 2020 | Change | % | 2021 | 2020 | Change | % | ||||||||
(except for % figures) | RMB | RMB | RMB | CAD | CAD | CAD | ||||||||||
Continuing Operations | ||||||||||||||||
Net profit for the year | 21.7 | 52.7 | (31.0 | ) | -59 | % | 4.2 | 10.2 | (6.0 | ) | -59 | % | ||||
Non-recurring items | ||||||||||||||||
Fair value change on derivative financial instrument | 4.8 | (11.4 | ) | 16.2 | 142 | % | 0.9 | (2.2 | ) | 3.1 | 142 | % | ||||
Recognition of share-based payment expenses | 0.8 | 1.7 | (0.9 | ) | -53 | % | 0.2 | 0.3 | (0.1 | ) | -53 | % | ||||
Government financial assistance | (1.8 | ) | (5.0 | ) | 3.2 | -64 | % | (0.3 | ) | (1.0 | ) | 0.7 | -64 | % | ||
Adjusted net profit for the year (non-IFRS) | 25.5 | 38.0 | (12.5 | ) | -33 | % | 5.0 | 7.3 | (2.3 | ) | -33 | % | ||||
Net profit in 2021 was RMB21.7 million (approx. CAD4.2 million), a decrease of RMB31.0 million (approx. CAD6.0 million), or 59%, from RMB52.7 million (approx. CAD10.2 million) in 2021. Net profit in 2021 included non-recurring items. On a comparable basis, after excluding the loss of RMB4.8 million (approx. CAD0.9 million) in fair value change on derivative financial instrument of loan discharge agreement 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) , share-based payment charges of RMB0.8 million (approx. CAD0.2 million) and the non-recurring government relief of RMB1.8 million (approx. CAD0.3 million), the Company reported a comparatively respectable adjusted net profit of RMB25.5 million (approx. CAD5.0 million) in 2021, a decrease of RMB12.5 million (approx. CAD2.3 million), or 33% from that of RMB38.0 million (approx. CAD7.3 million) reported in 2020.
In millions | 2021 | 2020 | Change | % | 2021 | 2020 | Change | % | ||||||||
(except for % figures) | RMB | RMB | RMB | CAD | CAD | CAD | ||||||||||
Continuing Operations | ||||||||||||||||
EBITDA for the year | 77.4 | 98.6 | (21.2 | ) | -21 | % | 15.0 | 19.2 | (4.2 | ) | -21 | % | ||||
Non-recurring items | ||||||||||||||||
Fair value change on derivative financial instrument | 4.8 | (11.4 | ) | 16.2 | 142 | % | 0.9 | (2.2 | ) | 3.1 | 142 | % | ||||
Recognition of share-based payment expenses | 0.8 | 1.7 | (0.9 | ) | -53 | % | 0.2 | 0.3 | (0.1 | ) | -53 | % | ||||
Government financial assistance | (1.8 | ) | (5.0 | ) | 3.2 | -64 | % | (0.3 | ) | (1.0 | ) | 0.7 | -64 | % | ||
Adjusted EBITDA for the year | 81.2 | 83.9 | (2.7 | ) | -3 | % | 15.8 | 16.3 | (0.5 | ) | -3 | % | ||||
EBITDA in 2021 was RMB77.4 million (approx. CAD15.0 million), a decrease of RMB21.2 million (approx. CAD4.2 million), or 21% from RMB98.6 million (approx. CAD19.2 million) in 2020.
On a comparable basis, the adjusted EBITDA in 2021 was RMB81.2 million (approx. CAD15.8 million), a decrease of RMB2.7 million (approx. CAD0.5 million), or 3%, from RMB83.9 million (approx. CAD16.3 million) in 2020.
Basic earnings per share (“EPS”) in 2021 was RMB0.35 (CAD0.07) per share. Adjusted EPS in 2021 was RMB0.38 (CAD0.07) per share (non-IFRS).
Completion of 2021 Target
In millions | 2021 Projection | 2021 Actual | Completed | ||
(except for % figures) | RMB | RMB | % | ||
Revenue | 410.7 | 355.2 | 86.5% | ||
Gross Profit | 187.3 | 134.0 | 71.6% | ||
Projected Net Profit (Recurring)/Adjusted Net Profit | 28.9 | 25.5 | 88.4% | ||
Benchmarking against the annual target for the 2021 year, we have achieved 86.5% of the revenue, 71.6% of gross profit and 88.4% of adjusted net profit targets set for the whole of the 2021 year.
2021 was a major milestone year for us as we commemorated the commencement of commercial operation of our Haitang Bay Integrated Smart Energy Project with three hotel users beginning to use our system and others in the pipeline committed to tap into our system to rip the benefits of cost savings while, as good corporate citizens, contributing towards a greener Hainan.
The Company will be making strategic and directional changes in 2022 to drive the Company’s performance back on track. With the new strategy and stronger, more efficient management team, the Company will continue to strive to make meaningful progress despite the COVID-19 pandemic and grow across our business segments. We will continue to look for new opportunities in the energy sector, including gas procurements, alternative energy resources to ensure multi-dimensional growth of the Company and further mitigate potential risks as the world navigates through the energy and resource transition.
As part of the plan to contribute to the carbon neutrality plan in China, the Company has started planning around this goal and making contributions to help achieve net-zero carbon emissions. Therefore, the Company will continue to invest in the integrated smart energy and smart mobility business segments. For the smart mobility segment, we have been working with local taxi and ride-sharing companies, municipal public transportation ministries in various cities in different provinces, and we have signed several new agreements with some of those companies in Haikou, Sanya and Zhuhai cities with execution targeted in 2022. In addition, we are also exploring opportunities to expand the electric vehicle (“EV”) battery swap service into light and heavy trucks in China as well.
Chairman Statement
Ann Siyin Lin, CEO and Chair of the Board, states that:
“Our revenues have taken a big hit this year as COVID-19 loomed over the Chinese and global economy for a second year running. In addition, the lower net profit was also caused by the decreasing gas selling price which was regulated by the government, even though the volume of gas sold in Sanya City increased by 12% compared to that of 2020.
“On the smart energy front, the Haitang Bay Integrated Smart Energy Project has commenced commercial operation in early third quarter of 2021 as planned, and is now in implementation stage. Three (3) of the hotels in Haitang Bay are currently using the system and connection of two other hotels are under construction. In 2022, we are anticipating additional hotels will be connecting and using our system as the economy slowly recovers. However, the growth of hotel clients will be slow since most hotels are not operating at their normal capacities due to low volume of visitors in Sanya, and hence their incentive to connect to our cooling system, which is more cost-effective, is diminished. Our EV battery swap business is still facing some difficulties in the operating cities since most public transportation companies have postponed their plans to replace their taxis due to reduced travelling requirement during the pandemic. However, as the market gradually recovers from the post-pandemic effect, we are hoping to see a positive momentum of in EV battery swap service.
“Now more than ever we need to make strategic changes and plans to navigate through this crisis and prepare for a prolonged period of uncertainty and new crises to come. This includes improving efficiencies and productivities via leaning out the processes across all functions in the Group, and implementing organizational labor restructuring to minimize operational & human resources costs. We aim to upgrade and transition the management team into a more commercialized standard in the coming year. We believe this change will set new goals and directions for the Company to drive up the profitability and transition towards healthier, more sustainable stage.”
The audited 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.
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.
CONTACT INFORMATION
Corporate Investment Relations
Investor.relations@changfengenergy.cn
Charles Wang
Executive Assistant to CEO & Chair of the Board
Zhaoyu.wang@changfengenergy.cn
Frederick Wong
Director of the Board
fred.wong@changfengenergy.cn
Mike Liu
VP Capital Market
mike.liu@changfengenergy.cn
Forward-Looking Statements
Certain 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 (including, without limitation, no significant adjustments to the gas selling price and charges for related services imposed by the relevant PRC government, the tourism industry continues to recover from COVID-19 impact and no delay in the development of the electric vehicle battery swap stations or the Haitang Bay Integrated Smart Energy Project). 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, tourism, and gas distribution and electric vehicle markets or delays in the development of key projects. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Company’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. This news release contains future oriented financial information and financial outlook information (collectively, "FOFI") (including, without limitation, statements regarding expected average production), and are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The FOFI has been prepared by management to provide an outlook of the Company's activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's reasonable estimates and judgments, however, actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein. Any FOFI speaks only as of the date on which it is made, and the Company disclaims any intent or obligation to update any FOFI, whether as a result of new information, future events or results or otherwise, unless required by applicable laws.
Non-IFRS Financial Measures
This news release contains financial terms that are not considered in the International Financial Reporting Standards ("IFRS"): EBITDA, Adjusted EBITDA and Adjusted Net Profit. These financial measures, together with measures prepared in accordance with IFRS, provide useful information to investors and shareholders, as management uses them to evaluate the operating performance of the Company. The Company's determination of these non-IFRS measures may differ from other reporting issuers, and therefore are unlikely to be comparable to similar measures presented by other companies. Further, these non-IFRS measures should not be considered in isolation or as a substitute for measures of performance or cash flows prepared in accordance with IFRS. These financial measures are included because management uses this information to analyze operating performance and liquidity.
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.
