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Fuwei Films Announces Second Quarter and First Half 2018 Unaudited Financial Results

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Fuwei Films Announces Second Quarter and First Half 2018 Unaudited Financial Results

PR Newswire

-Teleconference to be held on Friday, August 24, 2018 at 9:00 am EDT-

BEIJING, Aug. 23, 2018 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. (NASDAQ: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 three-month and six-month periods ended June 30, 2018.

Second Quarter 2018 Financial Highlights

  • Net sales during the second quarter ended June 30, 2018 increased to RMB79.6 million or US$12.0 million from RMB70.1 million last year;
  • Sales of specialty films were RMB30.7 million or US$4.6 million or 38.6% of our total revenues;
  • Overseas sales were RMB16.6 million or US$2.5 million;
  • Our gross profit grew to RMB6.8 million or US$1.0 million from RMB5.0 million last year; gross margin was 8.5% compared to 7.2% last year.

First Six Months 2018 Financial Highlights

  • Net sales during the first six months ended June 30, 2018 were RMB156.5 million or US$23.7 million from RMB138.0 million last year;
  • Sales of specialty films were RMB63.7 million or US$9.6 million or 40.7% of our total revenues;
  • Overseas sales were RMB27.6 million or US$4.2 million;
  • Our gross profit grew to RMB16.3 million or US$2.5 million from RMB8.8 million last year; gross margin was 8.5% compared to 6.4% last year.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "Our second quarter results reflect the intense competition as a result of excess capacity in the BOPET industry. In spite of this, I am pleased to share that our differentiated product strategy is showing results and sales of specialty films continued to grow. Riding on this positive momentum, we will work toward expanding our customer base through introducing innovative products and exploring overseas markets. We believe that capturing opportunities in new and emerging markets will help strengthen our competitive position."

Financial Results for the Three Months Ended June 30, 2018

Net sales during the second quarter were RMB79.6 million (US$12.0 million), compared to RMB70.1 million during the same period in 2017, representing an increase of RMB9.5 million or 13.6%. The increase of average sales price caused an increase of RMB8.1 million and the sales volume increase caused an increase of RMB1.4 million.

In the second quarter of 2018, sales of specialty films were RMB30.7 million (US$4.6 million) or 38.6% of our total revenues as compared to RMB25.6 million or 36.5% in the same period of 2017, which was an increase of RMB5.1 million, or 19.9% as compared to the same period in 2017. The increase of average sales price caused an increase of RMB0.3 million and the increase in the sales volume caused an increase of RMB4.8 million. The increase was largely attributable to the increase in sales volume.

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


Three-Month
Period Ended
 June 30, 2018

% of Total


Three-Month
Period Ended
June 30, 2017

% of Total


RMB

US$



RMB


Stamping and transfer film

29,428

4,446

37.0%


26,378

37.7%

Printing film

11,713

1,770

14.7%


5,289

7.5%

Metallization film

622

94

0.8%


2,483

3.5%

Specialty film

30,748

4,647

38.6%


25,568

36.5%

Base film for other application

7,088

1,072

8.9%


10,347

14.8%









79,599

12,029

100.0%


70,066

100.0%

Overseas sales were RMB16.6 million or US$2.5 million, or 20.9% of total revenues, compared with RMB15.8 million or 22.5% of total revenues in the second quarter of 2017. The increase of average sales price caused an increase of RMB1.4 million and the decrease in sales volume resulted in a decrease of RMB0.8 million.

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



Three-Month
Period Ended
 June 30, 2018

% of Total


Three-Month
Period Ended
June 30, 2017

% of Total



RMB

US$


RMB

Sales in China


62,994

9,520

79.1%


54,277

77.5%

Sales in other countries


16,605

2,509

20.9%


15,789

22.5%











79,599

12,029

100.0%


70,066

100.0%

Our gross profit was RMB6.8 million (US$1.0 million) for the second quarter, representing a gross profit rate of 8.5%, as compared to a gross profit rate of 7.2% for the same period in 2017. Correspondingly, gross profit rate increased by 1.3 percentage point compared to the same period in 2017. Our average product sales prices increased by 11.3% compared to the same period last year while the average cost of goods sold increased by 9.7% compared to the same period last year. Consequently, the amount of increase in average cost of goods sold was lower than that in average product sales prices during the second quarter ended June 30, 2018 compared with the same period in 2017, which resulted in an increase in our gross profit.

Operating expenses for the second quarter were RMB13.3 million (US$2.0 million), compared to RMB14.2 million for the same period in 2017.

Net loss attributable to the Company during the second quarter was RMB8.7 million (US$1.3 million) compared to net loss attributable to the Company of RMB11.6 million during the same period in 2017, representing a decrease of RMB2.9 million for the same period in 2017.

Financial Results for the Six Months Ended June 30, 2018

Net sales during the first six months were RMB156.5 million (US$23.7 million), compared to RMB138.0 million in the same period in 2017, representing an increase of RMB18.5 million or 13.4%. The increase in average sales price caused an increase of RMB17.1 million and the increase in the sales volume caused an increase of RMB1.4 million.

In the first six months, sales of specialty films were RMB63.7 million (US$9.6 million) or 40.7% of our total revenues as compared to RMB47.3 million or 34.3% in the same period of 2017, which was an increase of RMB16.4 million, or 34.7% as compared to the same period in 2017. The increase was mainly due to the increase of sales volume.

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


Six-Month
Period Ended
 June 30, 2018

% of Total


Six-Month
Period Ended
June 30, 2017

% of Total


RMB

US$



RMB


Stamping and transfer film

60,281

9,110

38.6%


53,450

38.7%

Printing film

17,581

2,657

11.2%


11,559

8.4%

Metallization film

1,795

271

1.1%


5,101

3.7%

Specialty film

63,695

9,626

40.7%


47,330

34.3%

Base film for other application

13,174

1,991

8.4%


20,570

14.9%









156,526

23,655

100.0%


138,010

100.0%

Overseas sales during the first six months were RMB27.6 million or US$4.2 million, or 17.6% of total revenues, compared with RMB29.0 million or 21.0% of total revenues in the same period in 2017. This was RMB1.4 million lower than the same period in 2017. The decrease in sales volume resulted in a decrease of RMB3.6 million and the increase in average sales price caused an increase of RMB2.2 million.

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



Six-Month
Period Ended
 June 30, 2018

% of Total


Six-Month
Period Ended
June 30, 2017

% of Total



RMB

US$


RMB

Sales in China


128,922

19,483

82.4%


109,008

79.0%

Sales in other countries


27,604

4,172

17.6%


29,002

21.0%











156,526

23,655

100.0%


138,010

100.0%

Our gross margin was RMB16.3 million (US$2.5 million) for the first six months, representing a gross margin rate of 10.4%, as compared to a gross margin rate of 6.4% for the same period in 2017. Correspondingly, gross margin rate increased by 4.0 percentage points. Our average product sales prices increased by 12.3% compared to the same period last year while the average cost of goods sold increased by 7.4% compared to the same period last year. Consequently, the amount of increase in average product sales prices was higher than that in cost of goods sold during the six months ended June 30, 2018 compared with the same period in 2017, which resulted in an increase in our gross margin.

Operating expenses for the first six months were RMB29.2 million (US$4.4 million), compared to RMB28.0 million in the same period in 2017, which was RMB1.2 million or 4.3% higher than the same period in 2017. This increase was mainly due to increased expenses on R&D.

Net loss attributable to the Company during the first six months was RMB16.9 million (US$2.5 million) compared to net loss attributable to the Company of RMB23.8 million during the same period in 2017, representing a decrease of RMB6.9 million from the same period in 2017 due to the factors described above.

Cash, cash equivalent and restricted cash totaled RMB62.9 million or US$9.5 million as of June 30, 2018. Total shareholders' equity was RMB202.1 million or US$30.5 million.

As of June 30, 2018, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, August 24, 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 reply ID: 37084. The replay will be available until September 24, 2018, at 09:00 a.m. EDT.

About Fuwei Films

Fuwei Films develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, also known as BOPET film. 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 both the short and long-term effects of the global financial crisis on the Company and the BOPET film industry; competition in the BOPET film industry; growth of, and risks inherent in, the BOPET film industry in China; uncertainty as to future profitability and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. 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.:

Mr. Shiwei Yin
Investor Relations
Grayling
Phone: +1-646-284-9474
Email: shiwei.yin@grayling.com

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2018 AND DECEMBER 31, 2017

(amounts in thousands except share and per share value)

(Unaudited)




June 30,
2018


December 31,
2017


RMB

US$


RMB

ASSETS

Current assets 






Cash and cash equivalents


24,861

3,757


12,963

Restricted cash


37,990

5,741


56,501

Accounts and bills receivable, net


18,653

2,819


20,123

Inventories


17,560

2,654


24,578

Advance to suppliers


5,254

794


3,898

Prepayments and other receivables


1,294

196


1,404

Deferred tax assets - current


1,277

193


1,288

Total current assets 


106,889

16,154


120,755







Property, plant and equipment, net


348,807

52,713


371,058

Construction in progress


2,478

374


366

Lease prepayments, net


16,563

2,503


16,830

Advance to suppliers - long term, net


1,542

233


1,570

Deferred tax assets - non current


6,831

1,032


6,901







Total assets 


483,110

73,009


517,480








Current liabilities






Short-term borrowings


65,000

9,823


50,000

Due to related parties


112,914

17,064


151,074

Accounts payables


22,934

3,466


17,470

Notes payable


67,980

10,273


67,900

Advance from customers


3,258

492


1,976


6,292

951


5,268

Total current liabilities


278,378

42,069


293,688







Deferred tax liabilities


2,646

400


2,763







Total liabilities 


281,024

42,469


296,451







Equity 






Shareholders' equity






Registered capital (of US$0.519008 par value;
5,000,000 shares authorized; 3,265,837 issued
and outstanding)


13,323

2,013


13,323

Additional paid-in capital


311,907

47,137


311,907

Statutory reserve


37,441

5,658


37,441

Accumulated deficit


(161,374)

(24,387)


(144,508)

Cumulative translation adjustment


789

119


2,866

Total shareholders' equity 


202,086

30,540


221,029

Total equity 


202,086

30,540


221,029

Total liabilities and equity 


483,110

73,009


517,480

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2018 AND 2017

(amounts in thousands except share and per share value)

(Unaudited)




The Three-Month Period
Ended June 30,


The Six-Month Period
Ended June 30,



2018


2017


2018


2017


RMB

US$


RMB


RMB

US$


RMB

Net sales


79,599

12,029


70,066


156,526

23,655


138,010

Cost of sales


72,803

11,002


65,041


140,239

21,193


129,228












Gross margin


6,796

1,027


5,025


16,287

2,462


8,782












Operating expenses











Selling expenses


3,395

513


3,701


6,365

962


7,207

Administrative expenses


9,916

1,499


10,486


22,792

3,444


20,752

Total operating expenses


13,311

2,012


14,187


29,157

4,406


27,959












Operating loss


(6,515)

(985)


(9,162)


(12,870)

(1,944)


(19,177)












Other income (expense)











- Interest income


10

1


217


383

58


503

- Interest expense


(2,257)

(341)


(2,407)


(4,458)

(674)


(4,853)

- Others income (expense), net


282

43


(342)


45

7


(389)

Total other expenses


(1,965)

(297)


(2,532)


(4,030)

(609)


(4,739)












Loss before provision for income taxes


(8,480)

(1,282)


(11,694)


(16,900)

(2,553)


(23,916)

Income tax benefit (expense)


(176)

(27)


49


34

5


114












Net loss


(8,656)

(1,309)


(11,645)


(16,866)

(2,548)


(23,802)












Net (loss) income attributable to non-controlling interests


-

-


-


-

-


-

Net loss attributable to the Company


(8,656)

(1,309)


(11,645)


(16,866)

(2,548)


(23,802)

Other comprehensive income (loss)











- Foreign currency translation adjustments attributable to
non-controlling interest


-

-


-


-

-


-

- Foreign currency translation adjustments attributable to
the Company


(36)

(5)


(487)


(2,077)

(314)


(211)












Comprehensive loss attributable to non-controlling interest


-

-


-


-

-


-

Comprehensive loss attributable to the Company


(8,692)

(1,314)


(12,132)


(18,943)

(2,862)


(24,013)












Loss per share,
Basic and diluted


(2.65)

(0.40)


(3.57)


(5.16)

(0.78)


(7.29)

Weighted average number ordinary shares,
Basic and diluted 


3,265,837

3,265,837


3,265,837


3,265,837

3,265,837


3,265,837













 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2018 AND 2017

(amounts in thousands except share and per share value)

(Unaudited)




The Six-Month Period Ended June 30,



2018


2017



RMB

US$


RMB

Cash flow from operating activities






Net loss


(16,866)

(2,548)


(23,802)

Adjustments to reconcile net loss to net cash






used in operating activities












- Depreciation of property, plant and equipment


22,127

3,344


21,728

- Amortization of intangible assets


266

40


262

- Deferred income taxes


(36)

(5)


(114)

- Bad debt recovery


(70)

(11)


512

-Inventory provision


-

-


(57)

Changes in operating assets and liabilities






- Accounts and bills receivable


1,541

233


(98)

- Inventories


7,019

1,061


303

- Advance to suppliers


(1,356)

(205)


(30)

- Prepaid expenses and other current assets


(65)

(10)


(1,104)

- Accounts payable


5,463

825


(1,489)

- Accrued expenses and other payables


(27)

(4)


288

- Advance from customers


1,282

194


171

- Tax payable


1,216

184


3,959







Net cash provided by (used in) operating activities


20,494

3,098


529







Cash flow from investing activities






Purchases of property, plant and equipment


124

19


(447)

Restricted cash related to trade finance


18,511

2,797


43,421

Advanced to suppliers - non current


28

4


(257)

Amount change in construction in progress


(2,112)

(319)


(2,157)







Net cash provided by (used in) investing activities


16,551

2,501


40,560







Cash flow from financing activities






Principal payments of bank loans


-

-


(1,675)

Proceeds from (payment to) short-term bank loans


15,000

2,267


(10,500)

Proceeds from (payment to) related party


(38,160)

(5,767)


15,322

Change in notes payable


80

12


(40,888)







Net cash (used in) provided by financing activities


(23,080)

(3,488)


(37,741)







Effect of foreign exchange rate changes


(2,067)

(346)


(239)







Net increase in cash and cash equivalent


11,898

1,765


3,109







Cash and cash equivalent






At beginning of period


12,963

1,992


13,343

At end of period


24,861

3,757


16,452







SUPPLEMENTARY DISCLOSURE:






Interest paid


4,458

674


4,853







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


1,008

152


1,398

 

Cision View original content:http://www.prnewswire.com/news-releases/fuwei-films-announces-second-quarter-and-first-half-2018-unaudited-financial-results-300701808.html

SOURCE Fuwei Films (Holdings) Co., Ltd.

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