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– Revenues of $283.2 million – Net source of revenue of $17.6 million
HARBIN, China, August 14, 2020 / PRNewswire / – China XD Plastics Company Limited (NASDAQ: CXDC) (“China XD”, the “Company” or “We”), one of the leading chemical corporations in the development, production and promotion of composite woven polymers primarily for automotive applications, announced its monetary effects for the quarter ending June 30, 2020.
Financial highlights for the 2020 quarter
Revenues $283.2 million, a minimum 38.8% year-over-year and 95.6% accumulated sequentially
Gross margin $39.9 million, a minimum of 38.9% year-on-year and an accumulation of 667.3% sequentially
Gross margin 14.1%, year-on-year and sequential accumulation of 10.5%
Net revenue source $17.6 million, compared to the net source of revenue of $40.1 million in it was last year and a net loss of $11.0 million in sequence.
EBITDA $44.9 million, a minimum 35.9% year after year and 106.9% accumulating sequentially. A description of the GAAP net source of EBITDA changes is detailed in the table entitled “GAAP and non-GAAP Results Reconciliation” as a result of this press release.
The total volume sent 56510 metric tons, a decrease of 47.0% year-on-year and an increase of 99.5% sequentially
“We are pleased with our quarterly effects with a resumption of superior and diminishing effects,” said Jie Han, president and ceo. “During the first part of this year, we saw serious production and sales disruptions in the Chinese automotive industry, and production and sales in the first part of this year declined year after year due to the COVID-19 pandemic. In a negative economic and commercial environment, the three-month era ended on June 30, 2020, China XD subtly subtly its marketing strategy to announce sales of new categories of high-end PA66 and PA6 products with high-value raw fabrics and higher domestic sales values. Matrix as evidenced through sales expansion in southwest China, eastern China and southern China, and average RMB promotion value higher to 19.7%, partially offsetting the 47.0% decrease in sales volume.”
“Along with the policies recently published by the Chinese government for the reopening of businesses, we will continue to focus on our customers’ wishes, synchronizing our production and sales for sustainable sales growth. At the same time, we will continue to complete our infrastructure projects in Heilongjiang and the Sichuan campus as planned, reducing the production capacity of the Heilongjiang campus to 390,000 metric tons and bringing the total capacity of the Sichuan base to 300,000 tons by the end of 2020. We are confident in our ability to make new incursions into more specialized sectors. -finishing products for various programs in other markets.
“We will continue to optimize our control design and operational efficiency. We are confident of ourselves, through our cooperation with major Chinese banks, to effectively execute our expansion strategy across multiple regions and sectors, and we are confident of our positioning in the Central Market.” Han concludes.
Second Quarter 2020 Results
Income
Revenue was US$283.2 million at the time of the quarter ended June 30, 2020, a low of US$179.9 million, or $38.8%, compared to $463.1 million last year. This is due to a 47.0% minimisation in sales volume and the negative has an effect of 4.3% of the exchange rate due to the depreciation of the RMB against the US dollar, and partially offset by an accumulation of 19.7% in the average. RMB promoting the value of our products, compared to those of the same time last year.
(i) Internal market
For the 3 months ended June 30, 2020, domestic market revenue was minimized through US$162.6 million or 36.5% due to: (i) a 46.1% minimisation in sales volume; (ii) a depreciation of RMB 4.3% against USD; and partially offset through (iii) a 22.1% increase in the average RMB promotion value of our products, until last year.
According to the China Automobile Manufacturers Association, car production and sales in China fell by 16.8% and 16.9%, respectively, during the first part of 2020 at the same time in 2019.
The weakening of macroeconomic situations since the outbreak of the COVID-19 pandemic in January 2020 has continued to exacerbate the automotive industry environment. The Company’s operations had a negative effect and generated lower revenue during the February-April 2020 era. Through our positive efforts to expand our visitor base and meet its new requirements, adding the production of raw PPE fabrics such as glasses and masks, to help mitigate the pandemic in our communities and mitigate the negative effects of the global pandemic on the Chinese automotive industry, the company began to slowly recover after May 2020. We recorded a 43.8% drop in sales in northeastern China, 28.9% in northern China, 16.5% in central China, and we recorded an increase in sales of 54.5% in southwest China, 41.9% in eastern China, 27.8% in southern China during the 3 months ended June 30, 2020 compared to the same time in 2019.
With respect to the promotion value of the RMB, the 22.1% increase was mainly due to increased sales of new categories of high-end PA66 and PA6 products made from high-value raw fabrics with a higher promotion value in the domestic market: period of the month. June 30, 2020.
(ii) Overseas Market
For the three-month era ended June 30, 2020, foreign market revenue was $0.2 million, compared to $17.5 million in the era of 2019.La Dubai plant has been temporarily closed since late February and did not resume operations. until the existing era, which had a negative effect on the operations of the Dubai plant.
High-end products (PA66, PA6, POM, PPO, Plastic Alloy and PLA) accounted for a total of 89.6% of finished product sales at the time of the 2020 quarter, compared to 83.6% last year. The company continued to shift the production harvester of classic low-end products such as PP to high-end products such as PA66 and PA6, basically due to (i) further prospective expansion for complex changed plastics in luxury automotive models in China, (ii) a more powerful call due to the Chinese government’s promotion of blind-power cars and (iii) greater demand for quality and popularity among quality customers of the cars manufactured through Chinese and German joint venture automakers, Chinese-American and Chinese-Japanese joint ventures, whose brands tend to use high-end exchanged plastics in vehicle-consistent quantities in China.
Gross margin of US$39.9 million at the time of the quarter ended June 30, 2020, compared to US$65.3 million in 2019, a low of US$25.4 million or 38.9%. Our gross margin remained constant at 14.1% for the two quarters ended June 30, 2020 and 2019, mainly due to minimizing sales of semi-finished products with a minimum profit margin, and partially offset by higher prices of unused capacity due to the closing at the time. 2020 quarter.
General and administrative expenses (A.G.) were US$3.7 million for the 3 months ended June 30, 2020, compared to US$5.8 million for the same time in 2019, a low of US$2.1 million or $36.2%. Minimization was basically due to minimizing wages and social and miscellaneous expenses resulting from the administration’s cost-cutting measure to meet the COVID-19 effect.
Research and progression expenses were US$5.8 million for the 3 months ended June 30, 2020, compared to US$9.6 million for the same era in 2019, a low of US$3.8 million, or 39.6%. This minimum is due to (i) a minimum of US$3.4 million in raw material intake; (ii) a minimisation of $0.3 million in depreciation and amortization; and (iii) a us$0.1 million minimisation in the salaries and well-being of study and progression staff. As of June 30, 2020, the number of studies and progression projects underway 356.
Total operating source of revenue US$30.4 million for the quarter ending June 30, 2020, compared to US$49.7 million in the same was 2019, a low of US$19.3 million or 38.8%. This is basically minimized by minimizing gross profit and partially offset by minimizing operating expenses.
Net financial expense US$15.8 million for the 3 months ended June 30, 2020, compared to $11.6 million for the same time in 2019, an accumulation of US$4.2 million or $36.2%, basically due to (i) the short-term average and the accumulation of long-term loan balance of US$1219.8 million for the 3-month era ended June 30, 2020 , compared to US$882.5 million for it in 2019; (ii) the accumulation of interest expenses resulting from the accumulation of the average interest rate on loans up to 5.4% for the 3 months ended June 30, 2020 compared to 5.2% for the same time in 2019.
Effective tax rates for the 3 months ended June 30, 2020 and 2019 were minus 12.0% and 6.2%, respectively. The accumulation of the effective tax rate increased from 6.2% for the 3 months ended June 30, 2019 to minus 12.0% for the 3 months ended June 30, 2020, mainly due to an accumulation in the amount of compensation of the unaccounted tax benefit.
Net revenue source of US$17.6 million at the time of the 2020 quarter, compared to the net source of revenue of US$40.1 million in the same quarter of 2019, a low of US$22.5 million or 56.1%. The basic and diluted earnings consistent with the consistent percentage by the time of the 2020 quarter were $0.26, compared to $0.60 consistent with the consistent percentage for the same period in 2019.
The average number of consistent percentages used in the calculation of fundamental and diluted earnings consistent with a consistent percentage for the 3 months ended June 30, 2020 66.9 million, compared to 50.9 million consistent with percentages for consistent profits with a consistent percentage in the past year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $44.9 million by the time of the 2020 quarter, to $70.1 million for the same era in 2019, a minimisation of $25.2 million or 35.9%. For a detailed reconciliation of EBITDA, a non-PCGA measure, with its closest PCGA equivalent, refer to the monetary tables at the end of this release.
Financial condition
As of June 30, 2020, the Company had a total of US$290.8 million in money and money equivalents, money affected money and term deposits, an accumulation of US$62.4 million or $27.3% of US$228.4 million as of December 31, 2019, mainly due to financial activity money inflows. As of June 30, 2020, current capital US$276.8 million (existing assets minus existing liabilities) and existing ratio (existing assets divided between existing liabilities) 1.2, compared to an existing ratio of 1.0 to December 31, 2019. Equity as of June 30, 2020 $876.6 million, 4.8% more than $836.4 million as of December 31, 2019, basically due to an accumulation of $45.9 million in non-controlling shares.
Expenses paid in advance and other existing assets increased to $233.6 million or 136.0% mainly due to (i) an accumulation of $308.5 million in accounts receivable to third parties, partially offset through (ii) a minimisation of $42.6 million in receivables, and (iii) an accumulation of $26.6 million minimizes in advances to suppliers for the acquisition of raw materials. Total short- and long-term bank loans increased by 34.3% due to the use of the line of credit for operational and investment activities in HLJ Xinda Group and Sichuan Xinda. We describe manageable debt grades as the sum of short- and long-term aggregated loans on total assets.
Recent development
On May 8, 2020, the Company’s Board of Directors won a non-binding initial proposal letter from Mr. Han, our President and CEO of XD. Engineering Plastics Company Limited (with Mr. Han, the “buying organisation”), a company incorporated in the British Virgin Islands and 100 percent owned through Mr Han, which proposes to obtain all the notable non-unusual shares of the company that are not yet in effective ownership through the organization of buyers in connection with a “personal company closure”. The Board of Directors has established a special committee (the “special committee”), composed of the following independent directors of the company: Mr. LinyuanZhai, Mr. Huiyi Chen and Mr. Guanbao Huang, with Mr. Huiyi Chen being the Chairman of the Special Committee. The special committee is responsible for evaluating, negotiating and recommending to the board any proposal involving a strategic corporate transaction with one or more third components. On June 15, 2020, the Company entered into an agreement and merger plan as a component of the proposed closing transaction. For more details, please refer to the company Form 8-K filed on June 15, 2020. It cannot be guaranteed that the merger agreement or transactions proposed under it or any other transaction will be approved or consumed through our shareholders.
Financial direction and business perspectives
Following the COVID-19 outbreak in the People’s Republic of China, production and sales in the Chinese automotive industry fell particularly by 16.8% and 16.9% in the first part of 2020, according to the China Automobile Manufacturers Association. It has a domino effect and has an effect on the entire automotive origin chain in China, the company added.
Since the company had temporarily closed some of its production facilities and offices in the People’s Republic of China in accordance with the needs of the government of the People’s Republic of China, the ongoing COVID-19 pandemic is having a significant negative effect on our commercial operations. Given these cases and procedural uncertainties, the Company may not forecast its monetary forecasts for fiscal year 2020 until it receives additional notice.
About non-GAGA financial measures
To supplement the Company’s consolidated monetary effects presented in accordance with sometimes accepted accounting principles (“GAAP”), the Company uses in this press release the following measure explained as non-GAAP monetary measures through the U.S. Securities and Exchange Commission: EBITDA. Non-GAGA monetary data are not terminated to be considered in isolation or instead of monetary data ready and presented in accordance with GAGs. For more information on this non-GAAP monetary measure, see the table titled “GAAP and non-GAAP Results Reconciliation” at the end of this press release. The Company’s control believes that this adjusted measure allows investors to better perceive the dating between the effects and the company’s former functionality. This adjusted measure should not be considered as an option for the net source of income (loss) or any other measure of monetary functionality submitted in accordance with the US GAAP, and is not necessarily comparable to a measure with the same call from some other company. The accompanying tables involve more main points on the reconciliation between the non-GAGA monetary measure and its directly comparable maximum GAA monetary measure.
Conference
China’s senior control XD Plastics will hold a conference call at 8:00 a.m. Eastern Time on Friday, August 14, 2020, to discuss its monetary results for the 2020 quarter.
Due to the COVID-19 outbreak, operator-assisted convention calls cannot be made at this time. All participants must pre-register online prior to the call to obtain login details.
Register before the convention at the link below. http://apac.directeventreg.com/registration/event/4577912. When you log in, you’ll get participants’ call numbers, direct event access code, and participant id.
To register for the conference, dial the number you receive, enter the timecode followed by your exclusive player ID, and you will be immediately attached to the conference.
You will have a recording of the convention call until August 22, 2020 by calling 1-855-452-5696 (for calls from the U.S.) And to ’61 2 8199 0299 (for overseas calls) and entering access code 4577912
The Investor Relations page of the company’s online page in http://chinaxd.net/ will offer a live internet broadcast and a replay of the convention call.
About China XD Plastics Company Limited
China XD Plastics Company Limited, through its wholly owned subsidiaries, develops, manufactures and sells polymer composite fabrics, mainly for automotive applications. The company’s products are used in external and internal ornaments and functional parts of 31 automotive brands manufactured in China, including, but not limited to, Audi, Mercedes Benz, BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei and VW. Passat, Golf, Jetta, etc. The company’s wholly owned study center is committed to the studies and progression of polymer composite tissues and benefits from its cooperation with famous scientists from prestigious Chinese universities. As of June 30, 2020, 636 of the company’s products were qualified for use through one or more automakers in China. For more information, visit the company’s English-online page at http://chinaxd.irpass.com/ and the Chinese online page in http://www.xdholding.com.
Safe Harbor Statement
This announcement includes forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act. 1995. All statements other than statements of fact in this announcement are forward-looking statements, including, but not limited to, the possibility of expanding the company into foreign markets; The effectiveness and profitability of the company’s product diversification strategy; They have an effect on the shift of the company’s product line to more complex products and similar pricing policies; The efficiency, profitability and market price of the company’s ongoing transition to more complex products; the attitude of the company’s comforts in other regions. These forward-looking statements would possibly be known through terms such as “will,” “expect,” “project,” “anticipate,” “anticipate,” “plan,” “believe,” “estimate,” and similar statements. Forward-looking statements involve inherent dangers and uncertainties and are based on existing expectations, assumptions, estimates and projections related to the Company and industry. Several vital points can also cause actual effects to differ materially from those contained in any forward-looking statement. Potential hazards and uncertainties include, but are not limited to, global economic uncertainty, fluctuating automotive sales and productions, the progression of the company’s expansion plans, the slowdown of the Chinese automotive industry, the concentration of distributors, consumers and suppliers of the Company, and other hazards detailed in the Company’s filings with the Securities and Exchange Commission and which can be found on its online page at http://www.sec.gov. The Company assumes no legal responsibility to update forward-looking statements to reflect long-term occasions or circumstances, or adjustments to its expectations, unless required by law. While the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot guarantee that its expectations prove to be accurate and investors are cautioned that the actual effects may differ materially from those expected.
Monetary tables –
CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED CONSOLIDATED UN AUDITED BALANCE SHEET
June 30
2020
December 31
2019
US DOLLARS $
US DOLLARS $
TRUMPS
Current assets:
Cash and money equivalents
3 167 943
17 201 775
Restricted species
164738 656
211231244
Term deposits
12289035
–
Accounts receivable, provision for insolvencies
184 384 982
222072053
Inventories
678 543 004
642 509 534
Prepaid expenses and existing assets
405 418 146
171848 122
Total assets
1 559 142 766
1264 862 728
Property, property, net
813 776 106
830 319 716
Long-term advance bills to appliance and structural suppliers
502049 222
495 570 421
Rates to use simple leases
43 107 997
44 149 955
Other non-current assets
736 988
979 428
Total assets
2918 813079
2635 882 248
COMMITMENTS AND EQUITY
Current Liabilities:
Short-term bank loans, adding up the existing percentage of long-term bank loans
770 943 894
680.174.859
Bills payable
331 954
400 671063
Accounts payable
48,199,950
57 458 673
Amounts owed to similar parties
25 876 162
26 251919
Income taxes payable
28 763054
26 458 837
Simple, non-unusual rental debts
1 413 018
1 388 555
Expenses payable and existing liabilities
76 017 727
86 550 388
Total responsibility
1 282 324 759
1 278 954 294
Long-term bank loans, existing shares
575 452 134
322 456 413
Deferred income
88 298 695
92639620
Simple non-current debts
14 250 090
14 429 434
Other non-current liabilities
81846026
91028 376
Total responsibilities
2 042 171 704
1 799 508 137
Capital:
Preferred Shares Serie B
100
100
Common shares, on par with US$0.0001, 500,000, 000 authorized shares, 66969841 shares issued, 66948841 notable shares as of June 30, 2020 and December 31, 2019, respectively,
6 697
6 697
Own stocks, 21,000 stocks at cost
(92 694)
(92 694)
Emission premium
184 208 447
184 208 447
Undated benefits
726 696 685
720.159.368
Cumulative total losses
(80085057)
(67 907 807)
Total attributable to China XD Plastics Company Limited
830 734 178
836 374 111
Uncontrollable interest
45 907 197
–
Total share capital
876 641375
836 374 111
Commitments and events
–
–
Total liabilities and equity
2918 813079
2635 882 248
CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
CONDENSED CON CONDENSED STATES OF TOTAL INCOME (LOSSES)
Three months ended
June 30
Six months ended
June 30
2020
2019
2020
2019
US DOLLARS $
US DOLLARS $
US DOLLARS $
US DOLLARS $
Income
283 223 987
463073880
428061665
764 539 887
Cost of income
(243 332 297)
(397 813 194)
(382 932 118)
(648 949 533)
Gross profit
39 891690
65 260 686
45 129 547
115 590 354
Sales rates
(46 149)
(247410)
(162060)
(525 230)
general and administrative expenses
(3 677 030)
(5 764 593)
(9 707 156)
(14 539978)
Research and costs
(5 803 128)
(9 551 721)
(9644920)
(19 613 907)
Total expenses
(9 526 307)
(15 563 724)
(19 514 136)
(34 679 115)
Operating income
30 365 383
49 696 962
25 615 411
80 911 239
Interest income
75 426
454 357
341 048
890 136
Interest costs
(15 914 544)
(12059 242)
(33 830 733)
(29 559 519)
Foreign gains (losses)
(177 717)
3 050 612
2 422
909 747
Proceeds from disposal of a subsidiary
–
–
–
518 491
Government grant
1 342 273
1 611 216
11 255 210
3 706 153
Total non-operating expenses, net
(14 674 562)
(6943057)
(20 074 053)
(23 534 992)
Income taxes
15 690 821
42 753 905
5.541.358
57 376 247
Income tax gets advantages (expense)
1 884 990
(2 642 588)
995 959
(6 284 215)
Net lngresos
17 575 811
40 111 317
6 537 317
51092032
Net source of income attributable to non-controlling interest
–
–
–
–
Net attributable to China XD Plastics Company Limited
17 575 811
40 111 317
6 537 317
51092032
Earnings consistent with non-unusual participation:
Basic and diluted
0,26
0,60
0,10
0,76
Net lngresos
17 575 811
40 111 317
6 537 317
51092032
Another of the overall result
Income tax currency conversion differential 0
406 160
(16 713 085)
(12 177 250)
(2 042 284)
Comprehensive source of income (loss)
17 981971
23 398232
(5 639933)
49 049 748
Comprehensive source of income attributable to non-controlling interest
–
–
–
–
Comprehensive source of revenue attributable to China XD Plastics Company Limited
17 981971
23 398232
(5 639933)
49 049 748
CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
UNUDITED CONDENSED CONSOLIDATED CASH FLOW TABLES
Six months ended June 30
2020
2019
US DOLLARS $
US DOLLARS $
Cash flows from activities:
Net money (used in) through operating activities
(310 823 681)
92864032
Cash flows from activities:
Buying deposits
(123 811 692)
–
Buying and depositing assets and equipment
(24 747 038)
(52 396 204)
Revenue from a subsidiary’s sales
–
7 376 807
Cash from the sale of a subsidiary
–
(3 202)
Net money used in investment activities
(148 558 730)
(45 022 599)
Cash flows from fundraising activities:
Loan product
638 701 758
1043 299
Loan repayments
(283 097 285)
(1307 643 944)
Non-controlling equity injection
46 251 494
–
Interest-free advance income from similar parties
1 138 498
67 389 859
Interest-free advance repayments from similar parties
(1138 498)
(65 152 460)
Payments for the issuance of syndicated loans
(126012)
–
Net funding money
401 729 955
94636 754
Effect of exchange rate adjustments on money, money equivalents and limited money
(2 873 964)
(2 597 145)
Net accumulation (decrease) of money, money and money equivalents
(60 526 420)
139 881042
Cash, equivalents of money and limited money at the beginning of the period
228 433 019
366 991 840
Cash, equivalents of money and money allocated at the end of the period
167 906 599
506872882
Additional money information:
Interest paid, in capitalized interest
33 303 914
29 586 602
Income tax paid
2 256 375
6067051
Non-monetary and financial activities:
Posting the acquisition of appliances and structure included in payable expenses and existing liabilities
5 890 438
1 721 729
Reclassification of interest without mandatory repayment in interest without
45 907 197
–
The following table shows a reconciliation of money, money equivalents and money affected in the consolidated balance sheets summarized with those presented in the consolidated statements of previous money flows.
June 30
2020
2019
US DOLLARS $
US DOLLARS $
Cash and money equivalents
3 167 943
194.763.132
Restricted species
164738 656
312 109 750
Total money, equivalents of money and money affected in the statement of cash flows
167 906 599
506872882
CHINA XD PLASTICS COMPANY LIMITED
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts expressed in US dollars)
Three months ended
June 30
2020
2019
Net revenue stream -GAAP
$17575811
$40,111,317
Interest costs
15 914 544
12059 242
Provision for income source taxes
(1884990)
2 642 588
Amortization subsidy
12 950 084
15.143.020
Amortization of assets under lease usage rights
312 112
157 806
Ebitda
44 867 561
70 113 973
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SOURCE China XD Plastics Company Limited