-Teleconference to be Held on Friday, June 15, 2018 at 9:00 am EDT–

BEIJING, June 14, 2018 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. FFHL ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the first quarter of 2018 ended March 31, 2018.

Highlights

• Net sales increased 13.3% to RMB76.9 million or US$12.3 million during the first quarter ended March 31, 2018 compared to the same period in 2017
• Specialty film sales accounted for 42.8% of total revenues compared to 32.0% for the same period in 2017
• Gross margins increased to 12.3% compared to gross margin of 5.5% during the same period in 2017

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "While we continue to face headwinds due to oversupply in the marketplace, we are encouraged by continued positive trends in overall sales, sales of specialty films and our gross margin improvement. We believe our commitment to innovation and R&D has expanded our end-user applications that will enable the Company to capitalize on these opportunities despite challenging industry and economic conditions."

First Quarter 2018 Results

Net sales during the first quarter ended March 31, 2018 were RMB76.9 million or US$12.3 million, compared to RMB67.9 million, during the same period in 2017, representing an increase of RMB9.0 million or 13.3%, mainly due to sales price increases.

In the first quarter of 2018, sales of specialty films were RMB32.9 million or US$5.3 million or 42.8% of our total revenues as compared to RMB21.8 million or 32.0% in the same period of 2017. The increase was mainly due to increases in sales volume.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):

Overseas sales were RMB11.0 million or US$1.8 million, or 14.3% of total revenues, compared with RMB13.2 million or 19.4% of total revenues in the first quarter of 2017, representing a decrease of RMB2.2 million or 16.7%. While a decrease in sales volume caused a decrease of RMB2.9 million, this was offset by an increase of RMB0.7 million caused by the increase of sales price.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):

Our gross profit was RMB9.5 million or US$1.5 million for the first quarter ended March 31, 2018, representing a gross margin of 12.3%, as compared to a gross margin of 5.5% for the same period in 2017. Correspondingly, gross margin increased by 6.8 percentage points compared to the same period in 2017. Our average cost of goods sold increased by 5.1% compared to the same period in 2017 due to the price increase of main raw materials while our average product sales prices increased by 13.0% compared to the same period in 2017. Consequently, the increase in average product sales prices was significantly higher than that in the average cost of goods sold during the first quarter ended March 31, 2018, which contributed to the increase in our gross margin compared with the same period in 2017.

Operating expenses for the first quarter ended March 31, 2018 were RMB15.8 million or US$2.5 million, which was RMB2.0 million, or 8.0% higher than the same period in 2017. This increase was mainly due to the increased allowance for doubtful accounts receivable and increased expense in R&D.

Net loss attributable to the Company during the first quarter ended March 31, 2018 was RMB8.2 million or US$1.3 million compared to net loss attributable to the Company of RMB12.2 million during the same period in 2017.

Basic and diluted net loss per share was RMB2.51 or US$0.40 and RMB3.72 for the three-month period ended March 31, 2018 and 2017, respectively.

Total shareholders' equity was RMB210.8 million or US$33.6 million as of March 31, 2018, compared with RMB221.0 million as of December 31, 2017.

As of March 31, 2018, the Company had 3,265,837 basic and diluted ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, June 15, 2018, at 9:00 a.m. EDT / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9205 in North America, or +1-201-689-8054 internationally, approximately 10 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 33501. The replay will be available until July 15, 2018, at 9:00 a.m. EDT.

About Fuwei Films

Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.

Safe Harbor

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include; significant competition in the BOPET film industry, especially the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the adverse impact of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully operate its third BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.

For more information, please contact:

In China:

Ms. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:

Vivian Chen
Investor Relations
Grayling
Phone: +1-646-284-9427
Email: vivian.chen@grayling.com

Financial Tables to Follow

 

 

 

 

 

 

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SOURCE Fuwei Films (Holdings) Co., Ltd.