Yangling, Shaanxi, April 15, 2019 (GLOBE NEWSWIRE) -- Kiwa Bio-Tech Products Group Corp. KWBT (the "Company" or "Kiwa Bio-Tech"), an emerging agricultural company that develops, manufactures and markets bio-fertilizers, today announced financial results for its full year ended December 31, 2018.
"During 2018, Kiwa Bio-Tech achieved a major milestone in terms of revenues and market penetration throughout China which we believe add significant shareholder value for many years to come," stated CEO Yvonne Wang.
Key 2018 Business and Financial Highlights:
Total gross revenues reported for 2018 was $30,650,402 compared to $17,270,069 in 2017, an increase of over 77.5%.
Total gross profit was $8,258,450 for 2018 compared to $5,424,195 in 2017. This represents an increase of $2,834,255 or 52%.
Total operating income was $2,589,346 for 2018 compared to 1,796,131 in 2017. This represents an increase of $793,215 or 44%.
Total Assets increased to $32.5 million in 2018 compared to $20.0 million in 2017. This represents an increase of $12.5 million or 62.5%.
The Chinese Government is continuously promoting a green environment and implementation of quality standards and environmentally sensitive policies in the Agricultural industry. As a result, we expect our revenues from our innovative and highly effective products. We believe that Kiwa's Compound Microbial Fertilizer, Bio-Water Soluble Fertilizer and Microbial Inoculum Fertilizer will continue to grow in a higher rate than Biological Organic Fertilizer being used in the market. Our Compound Microbial Fertilizer, Bio-Water Soluble Fertilizer, Microbial Inoculum Fertilizer and other new product series generally result in higher crop productivity and promotion of a green environment. Our marketing team is expanding or scope to the Western areas of China and we expect our revenues will continue to grow in 2019.
Key 2018 Operational Highlights:
In March 2018, Kiwa Bio-Tech established a Research Institute of Ecological Agriculture and Environmental Research. Based on cooperation with various Universities including the China Agriculture University, Northwest University, Northwest A&F University, Harbin Institute of Technology and Tsinghua University, we believe that we can secure a leading position in the KMF microorganisms technology over the next five years in the industry.
In April 2018, Kiwa Bio-Tech launched its Microbial Flora ("KMF") technology which is comprised of microorganisms with a larger scale of micro-flora. The micro-flora could significantly increase the beneficial microorganism in the soil that enhances the yield of the plant crops and prevents soil ecological problems. The newly upgraded technology will be applied to the main crop planting areas and presently-polluted arable areas for soil restoration.
In October 2018, Kiwa Bio-Tech got approval from the Administrative Committee of Yangling Agricultural High-tech Industry Demonstration Zone to obtain land use rights to construct a new manufacturing facility to help meet the growing demand in China for bio-fertilizers.
Yangling Free Trade Zone has agreed to offer Kiwa Bio-Tech approximately US$432,975 (3,000,000 RMB) in incentives and will provide Kiwa tax preferences for the first three years of business operation.
The manufacturing facility will specialize in developing and producing Kiwa Bio-Tech's core microbes, the fundamental components for making high-quality bio-fertilizers. The total facility construction area is approximately 8.77 acres, and will include fermentation and production terminals, agricultural produce sorting facilities and storage, a research and development institute and corresponding ancillary facilities. The construction of the manufacturing facility is expected to be completed in 2020 and have a production capacity of 60,000 tons of Kiwa Bio-Tech's core microbes. The annual production value of this facility is expected to be over US$65 million (approximately RMB 462 million).
Cost of revenue from Biological Organic Fertilizer, Compound Microbial Fertilizer, Bio-Water Soluble Fertilizer, and Microbial Inoculum Fertilizer increased by approximately $4.3 million, $5.0 million, $1.3 million, and $12,246 or 69%, 88%, 100% and 100% to approximately $10.5 million, $10.6 million, $1.3 million, and $12,246 in the year ended December 31, 2018 compared to $6.2 million, $5.6 million, $0, and $0 in the year ended December 31, 2017. The increase is in line with the revenue increase.
Average selling prices of Biological Organic Fertilizers and Compound Microbial Fertilizer increased by $4.26 or 2% and $7.75 or 2%, respectively, in the year ended December 31, 2018 as compared with the same period of 2017. The increase in average selling price is due to the fluctuation of exchange rate.
General and administrative ("G&A") expenses increased by approximately $1.9 million or 64% from approximately $3.0 million in the year ended December 31, 2017 to approximately $4.9 million in the same period in 2018.
Net interest expense was $634,874 and $524,333 for the year ended December 31, 2018 and 2017, respectively, representing an increase of $110,541 or 21%.
Research and development expenses was approximately $123,000 for the year ended December 31, 2018, decreased by approximately $25,000 or 17% from approximately $148,000 for the year ended December 31, 2017. The decrease is mainly due to the Company adjusted the proportion of R&D expenses to 15% of annual sales revenue after the establishment of its own research institute in Yangling.
The Company reported a net gain attributable to common shareholders of $0.02 per basic share for the full year 2018. This compares to a net gain of $0.08 per basic share for the full year 2017.
On December 31, 2018, Kiwa Bio-Tech had 16,885,260 shares of Common Stock issued and outstanding, compared to 15,202,965 shares issued and outstanding at year-end 2017. The share increase is fully attributed to the Company's business development and consulting services.
As of April 12, 2019, the total issued shares was 18,858,719 shares.
OUTLOOK FOR 2019
Kiwa Management ("Management") has provided guidance on 2018 operating results in the Management's Discussion & Analysis ("MD&A") for the year ended December 31, 2018. The outlook is provided to assist analysts and shareholders in formalizing their respective views on 2019. These measures are subject to change and these opinions will also serve as a reference for the Company to adjust its development plan in the process of development.
Management anticipates Kiwa will achieve gross revenues of more than US $39,000,000 in 2019 due to the growth of its sales team throughout the Country of China. The company also expects that its consolidation plan of expenses will increase the earnings per share.
"It is a great pleasure to see the Company successfully bid the Government Aquaculture Project in the Dinghu District, Zhaoqing Modern Agricultural Industrial Park, Guangdong Province. This marks the extension of Kiwa's microbial technology application from the very mature planting industry to the aquaculture industry and has been recognized by the government. We are extremely pleased to be gaining momentum with our planned growth and development strategy in both the agriculture and aquaculture sectors." Yvonne Wang added.
FINANCIAL REPORT
This release includes, by reference, Kiwa's 2018 financial reports, including the audited consolidated financial statements and the Management's Discussion & Analysis ("MD&A") of the Corporation.
For a copy of our 2018 financial results, including the MD&A and the audited consolidated financial statements, please visit our website at www.kiwabiotech.com or these financial results can be found on sec.gov in the Company's Annual Report on Form 10-K filed on April 12, 2019 with the SEC.
About Kiwa Bio-Tech Products Group Corp.
Leader in Eco-friendly Agricultural Industry Chain
Kiwa Bio-Tech Products Group Corp. (KWBT) is a publicly traded company with corporate headquarters in the Yangling, Shaanxi, China. The company develops, manufacture, markets and distributes innovative and environmentally safe bio-technological products for agriculture.
Kiwa's focus is to positively impact the environment by reducing the amount of chemical fertilizers that are being used by agricultural growers in China.
Kiwa Bio-Tech Products Group Corp. products are covered by patent protection and are designed to enhance the quality of human life by increasing the value and productivity of agricultural crops.
For more information on Kiwa Bio-Tech Products Group Corp. or its bio-fertilizer products and smart soil remediation technology, please refer to the Company's website at www.kiwabiotech.com.
Forward-Looking Statements
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. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. 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. 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's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic, business and environment conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, the execution of its ten-year growth plan, the foreign exchange risk amid the unexpected announcements by the PRC government and various other factors beyond the Company's control. Kiwa Bio-Tech Products Group Corp. 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.
Contact:
Kiwa Bio-Tech Products Group Corporation
ir@kiwabiotech.com
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