Market Overview

Boyuan Reports Third Quarter 2018 Financial Results


Boyuan Reports Third Quarter 2018 Financial Results

Canada NewsWire

TORONTO, May 15, 2018 /CNW/ - Boyuan Construction Group, Inc. (TSX:BOY, BOY.DB.A)) ("Boyuan" or the "Company"), a growing construction company in China of commercial, residential and municipal infrastructure projects, today reported its financial results for the three-month period ended March 31, 2018. All figures are in U.S. dollars unless otherwise stated.

Selected Quarterly Highlights

In thousands except share and % data








Gross profit




Gross profit margin








Net income




Earnings per share - diluted




March 31, 2018

June 30, 2017

Total Assets




Cash, cash equivalents and restricted cash





"Revenue was strong this quarter from progress made on a number of new construction projects that began during the past year," said Mr. Cai Liang Shou, Chairman of Boyuan Construction Group. "We identified a number of high quality projects and initiated construction on ten new projects since the beginning of the current fiscal year, with an aggregate contract value of $206 million. We have capitalized on our strong position in the robust Jiaxing, Zhejiang province, but due to the overall state of the real estate market in China, we remain cautious when taking on new projects."

Q3 FY2018 Financial and Operational Highlights

  • Revenue of $113.6 million, up 82.9% from $62.1 million for Q3'17
  • Gross profit of $8.6 million, representing a gross margin of 7.6%, up from $7.4 million and 11.9% respectively
  • EBITDA of $6.2 million, up 29.1% from $4.8 million in Q3'17
  • Net income of $2.9 million, up 20.5% from $2.4 million in Q3'17



EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. EBITDA is not a defined performance measure under IFRS.


Review of Financial Results

Revenue for the third quarter ended March 31, 2018 was $113.6 million, an increase of $51.5 million or 82.9% from the corresponding period last year. Revenue is recognized on the percentage-of-completion method. The substantial increase in revenue was due to the larger number of new construction projects taken up in the past two years. Due to the relatively robust real estate market in Jiaxing, Zhejiang province, the Company was able to identify a number of high quality projects in this period. For the nine months period ended March 31, 2018, the Company has commenced construction on ten material new projects with an aggregate contract value of $206 million. In comparison, new projects taken up in FY2017, FY2016 amounted to $260 million and $86 million respectively.

Cost of construction for Q3 FY2018 was $105 million, up 92.3% from $54.6 million for Q3 FY2017. Cost of construction includes all direct material, labour, subcontract and other related costs, such as equipment repairs. The two major components of the cost of construction are direct material and labour costs. Direct material costs were $71.5 million and labour costs were $28.3 million in this quarter. In comparison, direct material costs and labour costs were $39.6 million and $13.9 million respectively in the same quarter last year.

Gross profit for Q3 FY2018 was $8.6 million, representing a margin of 7.6% on revenue. Gross profit for Q3 FY2017 was $7.4 million, representing a margin of 11.9% on revenue. The lower gross margin for this period was due to the relatively depressed state of real estate markets, as well as the larger discount amount applied to the non-current unbilled revenue and accounts receivable compared to the same period last year.

Other income was $1.2 million in Q3 FY2018, compared to $1.5 million in Q3 FY2017. The major component of other income is the accretion income from the discount on non-current accounts receivable and unbilled revenue.

G&A expenses were $1.8 million in Q3 FY2018, an increase of $0.2 million or 12.8% from the same quarter last year. The G&A expenses have been stable over the periods and the changes are results of normal business fluctuations.

The Company has received payments this quarter from impairment loss on unbilled revenue recognized in prior years and made a net impairment loss reversal of $1.1 million. The Company recognized additional $3.3 million net impairment loss on accounts receivable for long outstanding debts.

Interest expense was $1.5 million in Q3 FY2018, up from the interest expense of $1.4 million in the same period last year. The increase was mainly due to the increase in the bank notes payable amount.

After-tax net income for Q3 FY2018 was $2.9 million, or $0.10 per fully diluted share, compared to $2.4 million, or $0.08 per fully diluted share, for Q3 FY2017.

The Company had working capital of $44.6 million, including cash and cash equivalents totalling $5.8 million for the period ended March 31, 2018. This compares to $49.5 million and $4.0 million, respectively, at June 30, 2017.

Boyuan's consolidated statements for the three-month period ended March 31, 2018 and related management's discussion and analysis (MD&A) will be filed with securities regulatory authorities within applicable timelines and will be available via SEDAR at

Conference Call Notice

The Company will hold a conference call to discuss its second quarter 2018 financial results on Wednesday, May 16, 2018 at 9:30 A.M. (ET). Mr. Paul Law, Boyuan's Chief Financial Officer, will host the call.

All interested parties can join the call by dialing 647-427-7450 or 1-888-231-8191. Please dial in 15 minutes prior to the call to secure a line.

The conference call will be archived for replay until Wednesday, May 23, 2018 at midnight. To access the archived conference call, please dial 1-855-859-2056 or 416-849-0833 and enter the reservation number 7586548#.

About Boyuan Construction Group, Inc.

Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the business of commercial building and residential construction, municipal infrastructure and engineering projects. In its last three fiscal years ending June 30, 2017, Boyuan completed 42 projects for a number of private and public-sector clients. Boyuan's current project backlog includes residential, commercial, industrial and mixed-use developments. From its operating bases in Zhejiang Province and in Hainan Province, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta and the Hainan Province. For more information visit

Caution Regarding Forward-Looking Information:

Certain information contained in this press release constitutes forward-looking information, which is information relating to future events or the Company's future performance and which is inherently uncertain. All information other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking information contained in this press release includes, but is not limited to, management's expectation to comply with the Alternative Information Guidelines. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and readers are cautioned not to place undue reliance on forward-looking information contained in this press release. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking information contained in this press release include, but are not limited to: risk of a general cease trade order bing issued, risk of risk of macro-economy cycle, risk from competition, risk from insufficient marketing to secure new projects, risk in obtaining additional financing, risk involving permits and licences, reliance on key management member, risk from supply of raw materials, risk of financial leverage, risk of bad debts in accounts receivables, risk involved in real estate development, foreign exchange fluctuations, political and economic conditions in China and other risks included in the Company's AIF for the fiscal year ended June 30, 2017 and in the Company's public disclosure documents filed with certain Canadian securities regulatory authorities and available at The forward-looking information contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as otherwise required by law.

SOURCE Boyuan Construction Group, Inc.

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