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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| China New Energy Limited | LSE:CNEL | London | Ordinary Share | JE00B3RWLF12 | ORD 0.025P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.50 | 7.00 | 15.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCNEL
RNS Number : 2704L
China New Energy Ltd
30 September 2016
30 September 2016
China New Energy Limited
("China New Energy" "CNE" or "the Group")
Half-yearly report for the six months to 30 June 2016
China New Energy Limited (AIM: CNEL), the engineering and technology solutions provider to the bioenergy sector, announces its unaudited half-yearly results for the six months ended 30 June 2016.
Financial Highlights
-- Revenue of RMB 45.4m (H1 2015: RMB 26.7m), which represents a 70% increase over the same period last year
-- Gross profit of RMB 16.2m (H1 2015: RMB 3.06m) -- Net Profit of RMB11.3m (H1 2015: loss of RMB5.54m) -- Earnings per share of RMB 0.029 (H1 2015 loss of RMB 0.014)
Operational Highlights
-- Maintenance and construction contracts secured in China in 2015 are being implemented and generating revenue
-- Canadian contract in process of implementation and will be finalised in Q2
Yu Weijun, Chairman, commented:
"I am very pleased to report that the Company has made a profit in the first half of the year based upon contracts in from China, Myanmar and Canada that were secured in 2015 for implementation in 2016.
The bioenergy industry still faces many headwinds due to the low-oil price. However, our revised strategy is beginning to gain traction in both China and international markets and we look forward to continued successes."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries:
Hot Features
Premium
China New Energy www.chinanewenergy.co.uk
Limited
Richard Bennett Tel: +44 (0)20 7148 3148
or rbennett@zkty.com.cn
Ivy Xu Tel: +86 (0)20 8705 9371
or xuhj@zkty.com.cn
Cairn Financial Advisers Tel: +44 20 7148 7900
LLP (NOMAD)
Jo Turner / Sandy
Jamieson
Daniel Stewart and Tel: +44 20 7776 6550
Co (Broker)
David Lawman
Chairman's Statement
On behalf of the Board, I am very pleased to present the unaudited half-yearly results for the six month period ended 30 June 2016.
Financial Review
Revenue for the first six months of the year was up to RMB 45.4m (H1 2015:RMB 26.7m) an increase of approximately 70%. The Group's gross profit also increased in the period RMB 16.2m (H1 2015:RMB 3.06m) which resulted in the Group returning a net profit in the period of RMB 11.3m (H1 2015: loss of RMB 5.5m).
Selling and distribution expenses increased by 6.2% to RMB2.39m (H1 2015:RMB2.25m) while administrative expenses increased by 2.7% to RMB 4.76m (H1 2015: RMB 4.63m). The Group's other income were up to RMB 2.89m (H1 2015:RMB0.05m). The other expenses decreased by 56% to RMB 0.55m (H1 2015:RMB1.26m). Finance expense decreased to RMB0.14m (H1 2015:0.51m).
The turnaround from loss to profit is mostly attributed to a higher gross margin and to the continued implementation of contracts in China, Myanmar and Canada that were won in 2015.
Operational Review
The Group principally provides EPC (Equipment, Procurement and Construction) services and VAS (Value Added Service) to ethanol and biobutanol producers. The EPC team primarily designs and builds commercial-scale biorefineries that convert feedstock into ethanol for both the biofuel and edible alcohol markets, whilst the VAS team provide services and technology to optimise the ethanol production at existing biorefineries.
CNE is a market leader in China at designing and building 1(st) Generation biorefineries that convert agricultural feedstock such as corn, cassava and sugarcane into ethanol. We have completed more than 100 1(st) Generation projects in China and around the world.
During the period, we completed an anhydrous alcohol EPC contract for our existing customer Jilin Buoda alcohol group with recorded revenue from this contract of RMB 10.6 million. The Company also won its first contract in Canada with BioNeutra North America Inc. and, during the period, manufactured and exported all of the equipment needed for the isomaltooligosaccharide production line. The total contract value was RMB 14.4 million (Excluding VAT:12.3 million) and we recorded revenue of RMB 8.2 million during the period. We are very pleased to advise that post period end, the equipment has now been installed and is being tested and we have now received more than 80% of the contract value as per the agreement. The project will be completed in H2.
These two top contracts constitute 42% of our total revenue, and the remaining revenue came from approximately 30 smaller maintenance and construction contracts in China and Myanmar.
The Company continues to maintain our cooperation with South China University of Technology and SDIC Guangdong Bio-Energy Co., Ltd. We jointly undertake research and development projects including a project to advance 2(nd) generation pre-treatment technology that converts cellulosic (non-food) feedstock into bioethanol. This research project has been approved and funded by a grant from the Guangdong Provincial Department of Science and Technology. The company has received its full allocation of RMB 3.5 million which was recorded as other operating income.
Outlook
After a long downturn in the bioenergy market, mostly due the low oil price, we are beginning to see an increase demand for our products and services. This is attributed to the implementation of our strategy to diversify our product and service portfolio and to market to them to both domestic and international customers.
China remains an important participant in the global energy market and is very focussed on delivering renewable energy to both reduce emissions and increase energy security and reliance on importing fossil fuels. We note the country recently signed the Paris Climate Change Agreement, and we are optimistic that we will see an increased interest in biotechnology because it is widely considered to be one of the key alternatives to fossil fuel and a pathway to lower emissions. The company intends to continue its research and development activities in partnership with institutions including Guangzhou Institute of Energy Conversion ("GIEC"), part of the Chinese Academy of Sciences, to commercialise advanced alternative and renewable energy technologies for the bioenergy market.
Internationally, we continue to promote our products and services through our partners. We continue to see an increased interest in our existing 1(st) generation bioenergy technology in emerging markets such as Africa and South East Asia. We also see an increased interest in 2(nd) generation bioenergy technology in developed markets which is also being aided by changes in the regulatory environment to support biofuel production. The encouragement of 2(nd) generation biofuel and regulatory changes are very welcome events as these help break down the inverse relationship between investment in biofuels and oil prices. We shall continue to update the market on developments on previously announced and new projects as they occur.
The Board are very pleased with our current progress and return to profitability. The board is also optimistic about the increased interest in the bioenergy sector and our pipeline of sales opportunities. However, we continue to maintain a cautious business approach due to the macro-economic climate and continued low-oil prices.
Yu Weijun
Chairman
30 September 2016
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
Six months Six months Year
to 30 to 30 to 31
June June December
2016 2015 2015
Note RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and
equipment 4,921 6,995 5,887
Intangible assets 12,107 9,589 12,150
Trade receivables 3,523
Investments in subsidiaries
17,028 20,107 18,037
----------- ----------- ----------
Current assets
Inventories 7,576 14,929 9,938
Due from customers
for construction contracts 29,796 34,842 30,240
Trade and other receivables 97,524 43,152 43,152
Notes receivables 410
Cash and cash equivalents 19,918 13,802 19,426
154,814 122,395 102,756
----------- ----------- ----------
Current liabilities
Trade and other payables 104,143 90,774 90,190
Due to customers for
construction contracts 46,777 25,432 27,566
Notes payables
Income tax payable 8,783 9,208 8,776
Short-term borrowing
159,703 125,414 126,532
----------- ----------- ----------
Net current assets/(liabilities) -4,922 3,019 (23,776)
Non-current liabilities
Deferred tax liabilities 815
815
----------- ----------- ----------
Net assets 12,106 16,273 (5,739)
----------- ----------- ----------
Equity
Share Capital 2 1,445 1,325 1,357
Share premium 63,208 54,925 56,696
Combination reserve (33,156) (33,156) (33,156)
Warrants reserve 1,673 1,673 1,673
Statutory reserve 12,328 12,328 12,328
Convertible bonds
reserve
Own shares
Accumulated earnings/(losses) (57,028) (44,438) (68,323)
Foreign currency translation
reserve 23,636 23,616 23,686
12,106 16,273 (5,739)
=========== =========== ==========
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months to 30 June 2016 Six months to 30 June 2015 Year to 31 December 2015
Note RMB'000 RMB'000 RMB'000
Revenue 45,369 26,671 61,669
Cost of sales (29,123) (23,609) 54,002
Gross profit/(loss) 16,246 3,062 7,667
Other operating income 2,888 53 2,473
Selling and distribution
expenses (2,391) (2,252) (5,754)
Administrative expenses (4,756) (4,629) (11,091)
Other operating expenses (554) (1,263) (9,450)
Finance expenses (138) (512) (891)
Bad debt provision(net) (8,977)
Impairment loss (400)
Other gains and losses
-------------------------- -------------------------- ------------------------
(Loss)/ Profit before
income tax 11,295 (5,541) (26,423)
Income tax expense 10
Deferred tax expenses 815
-------------------------- -------------------------- ------------------------
(Loss)/Profit for the
financial period 11,295 (5,541) (25,598)
-------------------------- -------------------------- ------------------------
Other comprehensive
income:
Exchange difference 189 (21) 50
Total comprehensive income
for the financial year 11,484 (5,562) (25,598)
-------------------------- -------------------------- ------------------------
Total comprehensive income
attributable to equity
holder 11,484 (5,562) (25,598)
========================== ========================== ========================
Earnings/(loss) per share
(RMB):
Basic 5 0.029 (0.014) (0.065)
Diluted 5 0.029 (0.014) (0.065)
========================== ========================== ========================
Consolidated Statement of Cash flows
Unaudited Unaudited Audited
Six months Six months Year
to 30 to 30 to 31
June June December
2016 2015 2015
RMB'000 RMB'000 RMB'000
Operating activities
Profit/(loss)
before income
tax 11,295 (5,541) (26,423)
Adjustments
for:
Depreciation
and amortisation (349) 1,688 2,409
Bad debt provision(net) 8,977
Loss/(gain)
on disposal
of property,
plant and equipment (26) 104
Loss/(gain)
on disposal
of financial
assets
Interest income (27) (25) (53)
Finance expense 562 537 535
Impairment loss 400
Exchange difference (50) 28
------------ ------------------ ----------
Operating cash
flows before
movements in
working capital 11,405 (3,341) (14,023)
Decrease/(increase)
in inventories 2,362 (3,088) 1,502
Construction
work-in-progress 19,211 14,625 7,835
Trade and other
receivables (54,372) (13,745) (3,439)
Notes receivables 444 90
Trade and other
payables 13,986 13,754 8,931
Decrease/(increase)
in due to
customers for
construction 13,526
Cash generated
from/(used in)
operations (6,964) 8,295 14,332
Income taxes
paid 7 10
Dividend received
------------ ------------------ ----------
Net cash from/(used
in) operating
activities (6,957) 8,295 14,342
Investing activities
Proceeds from disposal
of property, plant
and equipment
Purchase of property,
plant and equipment 1,694 (158) (181)
Expenditure
on intangible
assets (310) (4,331)
1,384 (2,234) (4,512)
Net cash from/(used
in) investing activities
------------ ------------------ ----------
Financing activities
Short-term borrowing
Repayment of borrowings (6,600) (6,600)
Proceeds from issuance
of shares 6,600 - 1,803
Redemption of convertible -
bonds
Interest received 27 25 53
Interest paid (562) (537) (535)
Net cash from/(used
in) financing activities 6,065 (7,113) (5,279)
------------ ------------------ ----------
Net increase/(decrease)
in cash and cash
equivalents 492 (1,052) 4,551
Cash and bank balances
at beginning of
period 19,426 14,875 14,875
Effect of foreign
exchange rate changes
in cash and bank
balances (21)
Cash and cash equivalents
at end of period 19,918 13,802 19,426
============ ================== ==========
Consolidated Statement of Changes in Equity
Foreign
Accumulated currency
Share Share Statutory Warrants Own earnings/ translation
capital premium Combination reserve reserve shares (losses) reserve Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance
at 31 December
2014 1,325 54,925 (33,156) 12,328 1,673 (38,895) 23,636 21,836
-------------------- --------------------- ------------ ---------- --------- ------- ------------ ------------ ---------
Profit for
the period - - - - - - (25,598) (25,598)
Exchange
difference
arising
on the
translation - - - - - - 50 50
-------------------- --------------------- ------------ ---------- --------- ------- ------------ ------------ ---------
Correction
of prior (3,830) (3,830)
Total
comprehensive
income for
the period - - - - - - (29,428) 50 (29,378)
Issue of
shares,
net of share
issue costs 32 1,771 1,803
Shares granted
to
Cancellation
of EBT
Balance
at Dec.
2015 1,357 56,696 (33,156) 12,328 1,673 (68,323) 23,686 (5,739)
-------------------- --------------------- ------------ ---------- --------- ------- ------------ ------------ ---------
Profit for
the period - - - - - - 11,295 11,295
Exchange
difference
arising
on the
translation - - - - - - (50) (50)
-------------------- --------------------- ------------ ---------- --------- ------- ------------ ------------ ---------
Total
comprehensive
income for
the period - - - - - - 11,295 (50) 11,245
Issue of
warrants - -
Issue of
shares,
net of share
issue costs 88- 6,512 - 6,600-
Transfer
to statutory
reserve - -
Balance
at 30 June
2016 1,445 63,208 -33,156 12,328 1,673 (57,028) 23,636 12,106
-------------------- --------------------- ------------ ---------- --------- ------- ------------ ------------ ---------
Notes to the Interim Financial Information - Period ended 30 June 2016
1. Basis of preparation
The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statements for the year ending 31 December 2016 and are unchanged from those disclosed in the Group's Report and Financial Statements for the year ended 31 December 2015, except for the following additional accounting policies:
Basis of consolidation
The Group includes the assets and liabilities of the Employee Benefit Trust ("EBT") within its Statement of Financial Position. In the event of the winding up of the Group, neither the shareholders nor the creditors would be entitled to the assets of the EBT.
Long-term incentive scheme charge
The fair value of the employee services received in exchange for the grant of shares or share options is recognised as an expense.
The total amount to be expensed over the performance period, from grant date to vesting date, is determined by reference to the fair value of the shares determined at the date the employee is deemed to be fully aware of their potential entitlement and all conditions of vesting.
Own shares
Company shares held by the EBT are deducted from the shareholders' funds and classified as Own Shares until such time as they vest unconditionally to participating employees and their families.
This interim financial information has not been reviewed or audited by the Group's auditors. The comparatives for the period ended 31 December 2015 are not the Group's full statutory accounts for that period but have been extracted from those financial statements. A copy of the statutory financial statements for that period, which were prepared under IFRS, has been delivered to the Companies Registry. The auditors' report on those accounts was unqualified.
Whilst the financial information included in this Interim Financial information has been prepared in accordance with the recognition and measurement criteria of IFRS, it does not include sufficient information to comply with IFRS.
This interim report was approved by the Board of directors on 30 September 2016.
2. Ordinary shares
Number
of Shares Share Capital Share premium
GBP RMB GBP RMB
'000 '000 '000 '000
As at 31st
December 2010 6,733,107 67 1,013 1,952 29,354
As at 21st
March 2011 67,331,070 67 1,013 1,952 29,354
As at 6 May
2011 269,324,280 67 1,013 1,952 29,354
Shares issued
in connection
with the
Placing 9,360,147 2 24 653 6,756
Share issued
in settlement
of fees to
professional 9,920,295 2 26 692 7,160
Share issued
to EES
Trustees
International
Limited 8,079,728 2 21 564 5,832
Shares issued
to Citadel
pursuant
to warrant
agreement 7,932,412 2 20 305 3,152
Placing on
14 Dec 2011 6,000,000 2 14 258 2,650
Less share
issue
costs - - (16,303)
As at 31
December
2011 310,616,862 1,118 38,601
Placing on 25
Sept 2012 6,000,000 2 15 59 601
Less share
issue
costs (3) (31)
As at 31
December
2012 316,616,862 1,133 39,171
As at 30 June
2013 316,616,862 1,133 39,171
Placing on 4
Nov 2013 10,000,000 3 24 248 2,425
Less share
issue
costs (17) (171)
Placing on 25
Nov 2013 8,571,429 2 21 298 2,966
Less share
issue
costs (21) (209)
Placing on 26
Nov 2013 6,666,667 2 17 248 2,462
Placing on 29
Nov 2013 7,107,143 2 18 246 2,474
As at 31
December
2013 348,962,101 1,214 49,118
Placing on 29
Sept 2014 44,652,107 11 111 584 5,807
As at 31
December
2014 393,614,208 1,325 54,925
Placing on 29
Dec 2015 13,333,333 3 32 185 1,771
As at 31
December
2015 406,947,541 1,357 56,696
Placing on 9
June 2016 37,500,000 9 88 696 6,512
As at 30 June
2016 444,447,541 1,445 63,208
The substantial shareholders have not changed from 31 May 2016 we outlined in the annual report.The Group has one class of ordinary shares which carry no right to fixed income.
3. Property, plant and equipment
Plant and Motor Office Leasehold Total
machinery Vehicles equipment improvements
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
As at 30 June
2016
Cost
At 1 January
2016 3,198 7,865 798 6,247 18,108
Additions 410 - 8 - 410
Disposals - (1,193) - (764) (1,957)
At 30 June
2016 3,608 6,362 806 5,483 16,259
Accumulated
depreciation
At 1 January
2016 2,167 5,936 532 3,586 12,221
Charged for
the year 1,208 (927) 42 (1,080) (757)
Disposals - 126 - - 126
At 30 June
2016 3,375 4,883 574 2,506 11,338
Carrying
amount
At 1 January
2016 1,031 1,929 266 2,661 5,887
============== ============== ============== ============== ===================================
At 30 June
2016 233 1,479 232 2,977 4,921
============== ============== ============== ============== ===================================
4. Intangible assets
Computer Patents Technology Knowhow Land use management Development cost Total
software
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Cost
Balance
at beginning
of year 60 2,908 3,613 6,914 13,495
Additions - 310 - - 310
Transfer (50) 6,378 - (1,107) (6,815) (1,594)
Balance
at end
of year 10 9,596 - 2,506 99 12,211
-------------------------- ------------------------- ------------------- --------------------------- --------------------- --------------------------
Accumulated
amortisation
Balance
at beginning
of year 51 535 759 - 1,345
Amortisation
for the
year (48) (240) - (728) (1,016)
Balance
at end
of year 3 295 - 31 329
-------------------------- ------------------------- ------------------- --------------------------- --------------------- --------------------------
Carrying
amount
As at
31 Dec
2015 15 978 - 2,937 4,209 8,139
========================== ========================= =================== =========================== ===================== ==========================
As at
30 June
2016 7 9,301 - 2,475 99 11,882
========================== ========================= =================== =========================== ===================== ==========================
5. Earnings per share
Earnings per share ("EPS")on a basic and diluted basis are as follows:
Earnings per share ("EPS") on a basic and diluted basis are as follows:
Earnings Weighted Earning per Earnings Weighted Earning per
average number shares average number shares
of shares of shares
Six months Six months Six months Six months Six months Six months
to 30 June to 30 June to 30 June to 30 June to 30 June to 30 June
2016 2016 2016 2015 2015 2015
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Earnings/(loss)per
share-basic 11,484 401,723,797 0.029 (5,562) 393,614,208 (0.014)
Potentially - - - - -
dilutive shares
----------------
Earnings/(loss)per
share-diluted 11,484 401,723,797 0.029 (5,562) 393,614,208 (0.014)
=========== ================ ================ =========== ================ ================
6. Directors' interests
The following Directors have held office during the period and their interests as at 30 June 2016, all of which are beneficial unless otherwise stated, whether direct or indirect, of the Directors and their families in the issued share capital of the company and options over Ordinary Shares which had been granted, are as follows:
Director Number of Ordinary Percentage of
Shares Ordinary Shares
Yu Weijun 90,932,440 20.46%
Tang Zhaoxing 48,000,000 10.80%
Richard Bennett - -
7. Business Segment
A business segment is a Group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.
The Group's revenue breakdown by geographical location is determined based on its customers' country of incorporation. The Group's cost of sales and operating expenses are aggregated on a cumulative basis and are not attributable to specific geographical regions. Therefore, a breakdown of gross profit for the financial years by geographical regions is not shown.
Geographical Segment
Revenue 6 months ended
--------------------
30 June 30 June
2016 2015
RMB'000 RMB'000
PRC 37,167 23,344
Myanmar 3,327
Canada 8,202 -
45,369 26,671
The CNE Group's assets, liabilities and capital expenditure are almost entirely attributable to a single business segment of provision of technology and engineering services to ethanol, ethanol downstream product and biobutanol producers. Therefore, the CNE Group does not have separately reportable business segments under IFRS 8 Segmental Reporting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BCGDCLBDBGLC
(END) Dow Jones Newswires
September 30, 2016 02:01 ET (06:01 GMT)
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