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CF Energy Announces Q2 and 1H Result of 2022

·13 min read
CF Energy Corp.
CF Energy Corp.

TORONTO, Aug. 26, 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 unaudited condensed interim consolidated financial results for the three-month and six-month periods ended June 30, 2022 (“Q2 2022 and 1H 2022” respectively).  

Q2 2022 financial highlights

Continuing Operations

 

 

 

 

 

 

 

 

In millions

Q2 2022

Q2 2021

Change

%

Q2 2022

Q2 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

Revenue

84.0

 

86.2

 

(2.2

)

-3

%

16.5

 

16.6

 

(0.1

)

Gross Profit

23.2

 

34.5

 

(11.3

)

-33

%

4.6

 

6.6

 

(2.0

)

Gross Profit Margin

27.6

%

40.0

%

-12.4

%

 

27.6

%

40.0

%

-12.4

%

Net Profit

0.1

 

14.9

 

(14.8

)

-99

%

0.1

 

2.9

 

(2.8

)

Adjusted net Profit (loss)

(4.2

)

13.0

 

(17.2

)

-133

%

(0.7

)

2.5

 

(3.2

)

EBITDA

16.4

 

28.3

 

(11.9

)

-42

%

3.2

 

5.4

 

(2.2

)

Adjusted EBITDA

12.1

 

26.4

 

(14.3

)

-54

%

2.4

 

5.0

 

(2.6

)

 

 

 

 

 

 

 

 

Revenue in Q2 2022 was RMB84.0 million (approx. CAD16.5 million), a decrease of RMB2.2 million (approx. CAD0.1 million), or 3%, from RMB86.2 million (approx. CAD16.6 million) for the three-month period ended June 30, 2021 (“Q2 2021”). The drop in revenue was attributable to the outbreak of COVID-19 in Sanya City in March 2022 which worsened in April and May of 2022, resulting in the drop in demand for natural gas from commercial customers.

Gross profit in Q2 2022 was RMB23.2 million (approx. CAD4.6 million), a decrease of RMB11.3 million (CAD2.0 million) or 33% from RMB34.5 million (approx. CAD6.6 million) in Q2 2021.   Overall Gross margin in Q2 2022 was 27.6%, a decrease of 12.4 percentage point from 40.0% in Q2 2021.

 

 

 

 

 

 

 

 

In millions

Q2 2022

Q2 2021

Change

%

Q2 2022

Q2 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

Net profit for the period

0.1

 

14.9

 

(14.8

)

-99

%

0.1

 

2.9

 

(2.8

)

Non-recurring items

 

 

 

 

 

 

 

Fair value change on derivative financial instrument

(4.5

)

(2.6

)

(1.9

)

72

%

(0.9

)

(0.5

)

(0.4

)

Recognition of share-based payment expenses

0.2

 

0.7

 

(0.5

)

-71

%

0.1

 

0.1

 

(0.0

)

Adjusted net profit (loss) for the period (non-IFRS)

(4.2

)

13.0

 

(17.2

)

-133

%

(0.7

)

2.5

 

(3.2

)

 

 

 

 

 

 

 

 

Net profit in Q2 2022 was RMB0.1 million (approx. CAD0.1 million), a decrease of RMB14.8 million (approx. CAD2.8 million), or 99%, from RMB14.9 million (approx. CAD2.9 million) in Q2 2021. Net profit in Q2 2022 included non-recurring items. On a comparable basis, after excluding the non-recurring items: the fair value change on derivative financial instrument of RMB4.5 million (approx. CAD0.9 million) and the recognition of share-based payments of RMB0.2 million (approx. CAD0.1 million), the adjusted net loss in Q2 2022 (non-IFRS) was RMB4.2 million (approx. CAD0.7 million), a decrease of RMB17.2 million (approx. CAD3.2 million) or 133% from RMB13.0 million (approx. CAD2.5 million) in Q2 2021.

Basic earnings per share (“EPS”) in Q2 2022 was RMB0.04 (CAD0.01) per share. Adjusted loss per share in Q2 2022 was RMB0.06 (CAD0.01) per share (non-IFRS).

 

 

 

 

 

 

 

 

In millions

Q2 2022

Q2 2021

Change

%

Q2 2022

Q2 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

EBITDA for the period

16.4

 

28.3

 

(11.9

)

-42

%

3.2

 

5.4

 

(2.2

)

Non-recurring items

 

 

 

 

 

 

 

Fair value change on derivative financial instrument

(4.5

)

(2.6

)

(1.9

)

72

%

(0.9

)

(0.5

)

(0.4

)

Recognition of share-based payment expenses

0.2

 

0.7

 

(0.5

)

-71

%

0.1

 

0.1

 

(0.0

)

Adjusted EBITDA for the period

12.1

 

26.4

 

(14.3

)

-54

%

2.4

 

5.0

 

(2.6

)

 

 

 

 

 

 

 

 

EBITDA (Non-IFRS measure) in Q2 2022 was RMB16.4 million (approx. CAD3.2 million), a decrease of RMB11.9 million (approx. CAD2.2 million), or 42%, from RMB28.3 million (approx. CAD5.4 million) in Q2 2021. EBITDA in Q2 2022 included non-recurring items. On a comparable basis, after excluding the non-recurring items: the fair value change on derivative financial instrument of RMB4.5 million (approx. CAD0.9 million) and the recognition of share-based payments of RMB0.2 million (approx. CAD0.1 million), the adjusted EBITDA in Q2 2022 (non-IFRS) was RMB12.1 million (approx. CAD2.4 million), a decrease of RMB14.3 million (approx. CAD2.6 million), or 54%, from RMB26.4 million (approx. CAD5.0 million) in Q2 2021.

1H 2022 financial highlights

Continuing Operations

 

 

 

 

 

 

 

 

In millions

1H 2022

1H 2021

Change

%

1H 2022

1H 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

Revenue

179.4

 

167.4

 

12.0

 

7

%

35.2

 

32.3

 

2.9

 

Gross Profit

60.5

 

68.1

 

(7.6

)

-11

%

11.9

 

13.1

 

(1.2

)

Gross Profit Margin

33.8

%

40.7

%

-6.9

%

 

33.8

%

40.7

%

-6.9

%

Net Profit

11.4

 

17.8

 

(6.4

)

-36

%

2.2

 

3.4

 

(1.2

)

Adjusted net Profit

1.0

 

21.8

 

(20.8

)

-95

%

0.2

 

4.2

 

(4.0

)

EBITDA

47.1

 

42.9

 

4.2

 

10

%

9.2

 

8.3

 

0.9

 

Adjusted EBITDA

36.7

 

46.9

 

(10.2

)

-22

%

7.2

 

9.1

 

(1.9

)

 

 

 

 

 

 

 

 

Revenue in 1H 2022 was RMB179.4 million (approx. CAD35.2 million), an increase of RMB12.0 million (approx. CAD2.9 million), or 7%, from RMB167.4 million (approx. CAD32.3 million) for the six-month period ended June 30, 2021 (“1H 2021”). Despite of the negative impact of COVID-19 lock-down during April and May 2022, total revenue of 1H 2022 increased as compared to 1H 2021 and this was mainly attributed to the increase in revenue from residential customers of pipeline installation and connection as the activities of construction of temporary housing under activation of city redevelopment plan only experienced a short period of suspension during lock-down in April 2022.

Gross profit in 1H 2022 was RMB60.5 million (approx. CAD11.9 million), a decrease of RMB7.6 million (CAD1.2 million) or 11% from RMB68.1 million (approx. CAD13.1 million) in 1H 2021. Overall Gross margin in 1H 2022 was 33.8%, a decrease of 6.9 percentage point from 40.7% in 1H 2021.

 

 

 

 

 

 

 

 

In millions

1H 2022

1H 2021

Change

%

1H 2022

1H 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

Net profit for the period

11.4

 

17.8

(6.4

)

-36

%

2.2

 

3.4

(1.2

)

Non-recurring items

 

 

 

 

 

 

 

Fair value change on derivative financial instrument

(10.8

)

3.0

(13.8

)

-460

%

(2.1

)

0.6

(2.7

)

Recognition of share-based payment expenses

0.4

 

1.0

(0.6

)

-64

%

0.1

 

0.2

(0.1

)

Adjusted net profit for the period (non-IFRS)

1.0

 

21.8

(20.8

)

-95

%

0.2

 

4.2

(4.0

)

 

 

 

 

 

 

 

 

Net profit in 1H 2022 was RMB11.4 million (approx. CAD2.2 million), a decrease of RMB6.4 million (approx. CAD1.2 million), or 36%, from RMB17.8 million (approx. CAD3.4 million) in 1H 2021. Net profit in 1H 2022 included non-recurring items. On a comparable basis, after excluding the non-recurring items: the fair value change on derivative financial instrument of RMB10.8 million (approx. CAD2.1 million) and the recognition of share-based payments of RMB0.4 million (approx. CAD0.1 million), the adjusted net profit in 1H 2022 (non-IFRS) was RMB1.0 million (approx. CAD0.2 million), a decrease of RMB20.8 million (approx. CAD4.0 million) or 95% from RMB21.8 million (approx. CAD4.2 million) in 1H 2021.

Basic earnings per share (“EPS”) in 1H 2022 was RMB0.25 (CAD0.05) per share. Adjusted EPS in 1H 2022 was RMB0.02 (CAD0.01) per share (non-IFRS).

 

 

 

 

 

 

 

 

In millions

1H 2022

1H 2021

Change

%

1H 2022

1H 2021

Change

(except for % figures)

RMB

RMB

RMB

 

CAD

CAD

CAD

Continuing Operations

 

 

 

 

 

 

 

EBITDA for the period

47.1

 

42.9

4.2

 

10

%

9.2

 

8.3

0.9

 

Non-recurring items

 

 

 

 

 

 

 

Fair value change on derivative financial instrument

(10.8

)

3.0

(13.8

)

-460

%

(2.1

)

0.6

(2.7

)

Recognition of share-based payment expenses

0.4

 

1.0

(0.6

)

-64

%

0.1

 

0.2

(0.1

)

Adjusted EBITDA for the period

36.7

 

46.9

(10.2

)

-22

%

7.2

 

9.1

(1.9

)

 

 

 

 

 

 

 

 

EBITDA (Non-IFRS measure) in 1H 2022 was RMB47.1 million (approx. CAD9.2 million), an increase of RMB4.2 million (approx. CAD0.9 million), or 10%, from RMB42.9 million (approx. CAD8.3 million) in 1H 2022. EBITDA in 1H 2022 included non-recurring items. On a comparable basis, after excluding the effects of non-recurring items: the fair value change on derivative financial instrument of RMB10.8 million (approx. CAD2.1 million) and the recognition of share-based payments of RMB0.4 million (approx. CAD0.1 million), adjusted EBITDA in 1H 2022 was RMB36.7 million (approx. CAD7.2 million), a decrease of RMB10.2 million (approx. CAD1.9 million), or 22%, from RMB46.9 million (approx. CAD9.1 million) in 1H 2021.

The performances of all segments of the Company have been impacted by several temporary city-wide “lock-down” controls implemented by the government due to COVID-19 infections. During the lock-down periods most people were required to stay home and most businesses and social activities were required to remain closed. This has slowed down the progresses of our ongoing projects, including gas distribution services, bringing in customers for the integrated smart energy system and EV battery swap services and will directly impact the Group’s results for the 3rd quarter this year. However, this will not affect the Company’s strategic direction and development, and we are determined to make efforts to put us back on track despite of the continuous impact of the COVID-19 pandemic.

The unaudited condensed interim 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. (Previously known as: Changfeng Energy Inc.)

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.

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