Net income up 88.4% for the
year
TORONTO, Sept. 28, 2018 /CNW/ - Boyuan Construction Group,
Inc. ("Boyuan" or the "Company") (TSX: BOY) (TSX: BOY.DB.A), an
established China-based
construction and engineering company, today reported its financial
results for the three-month and twelve-month periods
ended June 30, 2018. All figures are in U.S. dollars unless
otherwise stated.
Fiscal Year 2018 Highlights
- Revenue grew 63.4% to $325.9
million;
- Gross profit increased 43.3% to $24.4
million;
- Net income increased 88.4% to $8.7
million;
- Commenced construction on 13 material projects with an
aggregate contract value of $315
million.
Highlights Subsequent to Year End
- As announced on August 27, 2018,
commenced construction on four new projects with combined contract
values of US$81.1 million.
"Our strong revenue for the year is a testament to our strategic
focus on the bourgeoning real estate market in Jiaxing City and the
surrounding area," said Mr. Cai Liang
Shou. "In fiscal 2018, we identified a number of high
quality projects and commenced construction on thirteen material
projects worth a total of $315
million. Twelve of these projects are in Jiaxing and its
surrounding area. Since then, in August we announced that we had
broken ground on four new material projects worth a combined
$81.1 million. The new projects
started subsequent to year end included a commercial and two
residential development projects in Jiaxing, as well as a
residential development in the city of Qionghai in Hainan Province."
Selected Fiscal Year Financial Results
In thousands
except share and % data
|
FY
2018
|
FY
2017
|
Change
|
Revenue
|
$325,926
|
$199,514
|
63.4%
|
Gross
profit
|
$24,401
|
$17,024
|
43.3%
|
Gross profit
margin
|
7.5%
|
8.5%
|
(11.8%)
|
EBITDA1
|
$19,913
|
$15,667
|
27.1%
|
Net income
|
$8,721
|
$4,628
|
88.4%
|
Earnings per share –
diluted
|
$0.30
|
$0.17
|
76.5%
|
____________________________
|
1 EBITDA
is defined as earnings before interest, income taxes, depreciation
and amortization. EBITDA is not a defined performance measure under
IFRS.
|
In thousands
except % data
|
June 30,
2018
|
June 30,
2017
|
Change
|
Total
Assets
|
$272,617
|
$216,650
|
25.8%
|
Cash, cash
equivalents & restricted cash
|
$15,783
|
$10,821
|
45.9%
|
Review of Fiscal Year 2018 Financial Results
Revenue for fiscal 2018 increased 63.4% to $325.9 million, compared to $199.5 million the year before. The Company's
revenue is recognized on the percentage-of-completion method.
Revenue for the year benefited from the Company's strategic focus
on the fast-growing city of Jiaxing, which remains one of the
hottest land markets in China
despite measures introduced by the Chinese central government in
recent years to cool down real estate markets across the country.
As a result of the relatively robust real estate market in Jiaxing,
Zhejiang Province, in fiscal 2018
the Company was able to identify a number of high quality projects
and commenced construction on thirteen material projects, including
twelve in Jiaxing and its surrounding area. These thirteen material
contracts have an aggregate contract value of $315 million.
In fiscal 2018, costs of construction increased to $301.5 million, from $182.5 million the year before. Costs of
construction include all direct material, labour, subcontract and
other related costs, such as equipment repairs. The two major
components of the costs of construction are direct material and
labour costs. In fiscal 2018, direct material costs were
$213.5 million and labour cost was
$75.9 million, compared to
$130.1 million and $47.9 million respectively in fiscal 2017.
Gross profit for fiscal 2018 increased 43.3% to $24.4 million, compared to $17.0 million the prior year. As a percentage of
revenue, gross margin for fiscal 2018 was 7.5%, compared to 8.5%
the year before.
There was an impairment loss recovered on deposits of
$0.7 million in the year, compared to
a loss of $0.6 million last year.
These amounts were included in the G&A expenses last year.
G&A expenses were $6.1 million in
FY2018 compared to $6.5 million in
FY2017. The decrease was mainly due to the reclassification of the
impairment loss/recovered on deposits during the years.
The net impairment loss on accounts receivable and unbilled
revenue was $6.8 million for FY2018
($1.9 million for FY2017). The
impairment loss was a result of two projects in Hainan and a project in Haining that the
Company has experienced a long delay in collection. On the other
hand, the Company has recovered certain amount from accounts
previously impaired thus resulting in a net impairment loss of
$6.8 million this year.
Interest expense was $6.8 million
in FY2018, an increase of $0.7
million over FY2017. The higher interest expense for the
year was primarily due to the increase in bank notes payable in the
year.
Net income for fiscal 2018 was $8.7
million, or $0.34 per share
(or $0.30 diluted earnings per
share), compared to $4.6 million, or
$0.18 per share ($0.17 diluted earnings per share) for fiscal
2017.
Boyuan had working capital of $53.3
million, including cash, cash equivalents, and restricted
cash totalling $15.8 million as at
June 30, 2018. This compares to
$49.5 million and $10.8 million, respectively, at June 30, 2017.
Boyuan's consolidated statements for the three-month and
twelve-month periods ended June 30,
2018 and related management's discussion and analysis
(MD&A) will be filed with securities regulatory authorities
within applicable timelines and will be available via SEDAR at
www.sedar.com.
Conference Call Notice
The Company will hold a conference call to discuss its fourth
quarter and year-end financial results on Tuesday, October 2, 2018 at 9:30 A.M. (ET). Mr. Paul
Law, Boyuan's Chief Financial Officer, will host the
call.
All interested parties can join the conference call by dialing
1-888-231-8191 or 647-427-7450. Please connect approximately 15
minutes prior to the beginning of the call to ensure participation.
The conference call will be archived for replay until Tuesday, October 9, 2018 at midnight. To access
the archived conference call, dial 1-855-859-2056 or 416-849-0833
and enter the reservation number 4772589#.
About Boyuan Construction Group, Inc.
Backed by a longstanding track record, Boyuan Construction
Group, Inc. ("Boyuan" or the "Company") has the knowledge and
expertise to design and build a wide range of commercial and
residential developments, as well as municipal infrastructure and
engineering projects. Based in Jiaxing City and with a growing
presence in both Zhejiang Province
and Hainan Province, Boyuan
focuses on construction projects in China's fast-growing regions of the Yangtze
River Delta and the Hainan
Province. The Company's current project backlog includes
residential, commercial, industrial and mixed-use developments. For
more information visit www.boyuangroup.com.
Caution Regarding Forward-Looking Information:
Certain information contained in this press release constitutes
forward-looking information, which is information relating to
future events or the Company's future performance and which is
inherently uncertain. All information other than statements of
historical fact may be forward-looking information. Forward-looking
information is often, but not always, identified by the use of
words such as "seek", "anticipate", "budget", "plan", "continue",
"estimate", "expect", "forecast", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar words or phrases (including
negative variations) suggesting future outcomes or statements
regarding an outlook. Forward-looking information contained in this
press release includes, but is not limited to, management's
expectation to comply with the Alternative Information Guidelines.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information. The Company believes the expectations
reflected in the forward-looking information are reasonable but no
assurance can be given that these expectations will prove to be
correct and readers are cautioned not to place undue reliance on
forward-looking information contained in this press release. Some
of the risks and other factors which could cause results to differ
materially from those expressed in the forward-looking information
contained in this press release include, but are not limited to:
risk of a general cease trade order bing issued, risk of risk of
macro-economy cycle, risk from competition, risk from insufficient
marketing to secure new projects, risk in obtaining additional
financing, risk involving permits and licences, reliance on key
management member, risk from supply of raw materials, risk of
financial leverage, risk of bad debts in accounts receivables, risk
involved in real estate development, foreign exchange fluctuations,
political and economic conditions in China and other risks included in the
Company's AIF for the fiscal year ended June
30, 2018 and in the Company's public disclosure documents
filed with certain Canadian securities regulatory authorities and
available at www.sedar.com. The forward-looking information
contained in this press release are made as of the date hereof and
the Company undertakes no obligation to update publicly or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, except as otherwise
required by law.
SOURCE Boyuan Construction Group, Inc.