TORONTO, June 12, 2020 (GLOBE NEWSWIRE) -- CF Energy Corp., (CFY.V) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), an energy service provider in the People’s Republic of China (the “PRC” or “China”), wishes to provide an update to its shareholders on the current impact of COVID-19 on the business and operations of the Group and the decision of the Board of Directors (the “Board”) of the Company to suspend the declaration and payment of dividends.
Projected results for the three and six-month periods ending June 30, 2020
Based on the preliminary assessment of the latest management accounts of the Group for the two-month period ended May 31, 2020 (the “April and May 2020 Management Accounts”) and information available to the Group up to the date of this press release, the projected revenue of the Group for the three-month period ending June 30, 2020 (“Q2 2020”) (the “Q2 2020 Projected Results”) is expected to be approximately 21% less than the revenue reported for the three-month period ended June 30, 2019 (“Q2 2019”). Taking into account the Q2 2020 Projected Results, the projected revenue of the Group for the six-month period ending June 30, 2020 (“1H 2020”) (the “1H 2020 Projected Results”) is expected to be approximately 30% less than the revenue reported for the six-month period ended June 30, 2019.
Since the outbreak of the COVID-19 pandemic in late January 2020, the Group experienced a significant decrease in revenue across all its business segments in the three-month period ended March 31, 2020 (“Q1 2020”) and this has continued to impact Q2 2020. The expected decrease in revenue in Q2 2020 is primarily due to the fall in gas demand and pipeline connection services with business and economic recovery being at early stages after the relaxation of quarantine and travel restrictions in China. The April and May 2020 Management Accounts, which formed the basis for projecting the Q2 2020 Projected Results, have not been reviewed by the audit committee of the Board. Consequently, the Q2 2020 Projected Results and the 1H 2020 Projected Results of the Group may differ from the actual results. The financial statements for 1H 2020 are expected to be released in August 2020.
Going forward, the COVID-19 pandemic is expected to continue to have a negative impact on the business and operations of the Group but the extent of such impact, which is dependent on the speed of economic recovery and visitors returning to Sanya for holidays, remains uncertain. However, the extent of expected revenue decrease in Q2 2020 of approximately 21% as compared to Q2 2019 is much less than the rate of decrease of 38% reported in Q1 2020 as compared to the three-month period ended March 31, 2019. The Company will continue to keep shareholders updated on the development as and when appropriate.
Suspension of declaration and payment of dividends
Having considered the 1H 2020 Projected Results and the expected continuing negative impact of the COVID-19 pandemic on the Chinese economy, including the business of the Group, the Board determined that, under such circumstances, it would be appropriate to adopt a more prudent approach to cash management, and therefore decided to suspend the declaration and payment of dividends in order to preserve liquidity in support of the development of existing lines of business and the new EV battery swap station business in Hainan. The Board believes that the suspension of the declaration and payment of dividends at the present time is in the best interests of the Company and its shareholders. The Board undertakes to review the reactivation of the Company’s semi-annual dividend as and when the overall business and economic environments in which the Group operates show positive signs of sustained recovery, along with an improvement in the Group’s operating results.
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. In 2009, CF Energy was recognized as being one of China’s the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSXV for the 2018 year.
Corporate Investment Relations
Executive Assistant to CEO & Chair of the Board
Director of the Board
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 with respect to the Q2 2020 Projected Results and the 1H 2020 Projected Results, the expected timing for the release of financial statements for 1H 2020, the expected impact of COVID-19 on the Group going forward, the current suspension of the declaration and payment of dividends and the potential for the declaration and payment of dividends in the future. 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, the continuing adverse economic environment caused by the COVID-19 pandemic, as well as negative changes in general economic conditions and conditions in the financial markets. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’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.
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