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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 |
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:
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
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