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Fuwei Films Announces Third Quarter of 2019 Unaudited Financial Results

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BEIJING, Nov. 26, 2019 /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 nine-month periods ended September 30, 2019.

Third Quarter 2019 Financial Highlights

  • Net sales were RMB79.6 million (US$11.1 million), compared to RMB86.9 million during the same period in 2018.
  • Sales of specialty films were RMB40.6 million (US$5.7 million) or 51.0% of total revenues as compared to RMB45.3 million or 52.2% of total revenues in the same period of 2018.
  • Overseas sales were RMB11.6 million (US$1.6 million) or 14.6% of total revenues, compared with RMB8.5 million or 9.8% of total revenues in the third quarter of 2018.
  • Gross profit was RMB21.6 million (US$3.0 million), representing a gross margin rate of 27.1%, as compared to gross profit of RMB17.1 million and a gross margin rate of 19.6% for the same period in 2018.
  • Net profit attributable to the Company was RMB3.4 million (US$0.5 million), compared to net loss attributable to the Company of RMB1.8 million during the same period in 2018, representing an increase in profit of RMB5.2 million.

First Nine Months 2019 Financial Highlights

  • Net sales were RMB248.8 million (US$34.8 million), compared to RMB243.40 million, during the same period in 2018, representing an increase of RMB5.4 million or 2.2%.
  • Sales of specialty films were RMB114.7 million (US$16.0 million) or 46.1% of total revenues as compared to RMB109.0 million or 44.8% in the same period of 2018.
  • Overseas sales were RMB42.2 million (US$5.9 million) or 16.9% of total revenues, compared with RMB36.1 million or 14.8% of total revenues in the same period in 2018.  
  • Gross profit was RMB52.6 million (US$7.4 million), representing a gross margin of 21.2%, as compared to a gross margin of 13.7% for the same period in 2018.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "Benefiting from our differentiated product strategy and continuous R&D, we are pleased to continue to operate profitably for the third quarter. Sales of specialty films stayed dominant in wholesales and accounted for 51% of total sales during the quarter. Looking ahead, the BOPET industry remains competitive as a result of higher supply. Nevertheless, we will continue to innovate, tackle overseas markets and execute our differentiated product strategy to improve performance and capture opportunities."

Financial Results for the Three Months Ended September 30, 2019

Net sales during the third quarter ended September 30, 2019 were RMB79.6 million (US$11.1 million), compared to RMB86.9 million during the same period in 2018. The decrease of average sales price caused a decrease of RMB4.6 million and the sales volume decrease caused a decrease of RMB2.7 million.

In the third quarter of 2019, sales of specialty films were RMB40.6 million (US$5.7 million) or 51.0% of total revenues as compared to RMB45.3 million or 52.2% in the same period of 2018. The decrease in average sales price caused a decrease of RMB1.5 million and the decrease in the sales volume caused a decrease of RMB3.2 million.

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


Three-Month Period Ended
September 30, 2019

% of  Total


Three-Month Period Ended
September 30, 2018

% of  Total


RMB

US$



RMB


Stamping and transfer film

26,552

3,715

33.3%


30,650

35.3%

Printing film

7,881

1,103

9.9%


6,293

7.2%

Metallization film

1,197

167

1.5%


773

0.9%

Specialty film

40,559

5,674

51.0%


45,325

52.2%

Base film for other application

3,397

475

4.3%


3,832

4.4%









79,586

11,134

100.0%


86,872

100.0%

Overseas sales were RMB11.6 million or US$1.6 million, or 14.6% of total revenues, compared with RMB8.5 million or 9.8% of total revenues in the third quarter of 2018. The decrease in average sales price caused a decrease of RMB0.8 million and the increase in sales volume resulted in an increase of RMB3.9 million.

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


Three-Month Period Ended
September 30, 2019

% of Total

Three-Month Period Ended
September 30, 2018

% of Total


RMB

US$

RMB

Sales in China

67,933

9,512

85.4%

78,369

90.2%

Sales in other countries

11,593

1,622

14.6%

8,503

9.8%








79,586

11,134

100.0%

86,872

100.0%

Gross profit was RMB21.6 million (US$3.0 million) for the third quarter ended September 30, 2019, representing a gross margin rate of 27.1%, compared to gross profit of RMB17.1 million and a gross margin rate of 19.6% for the same period in 2018. Correspondingly, gross margin rate increased by 7.5 percentage point compared to the same period in 2018.

Operating expenses for the third quarter ended September 30, 2019 were RMB16.3 million (US$2.3 million), which was RMB1.5 million, or 8.4% lower than the same period in 2018. This decrease was mainly due to decreased expenses on research and development.

Net profit attributable to the Company during the third quarter ended September 30, 2019 was RMB3.4million (US$0.5 million), compared to net loss attributable to the Company of RMB1.8 million during the same period in 2018, representing an increase in profit of RMB5.2 million.

Financial Results for the Nine Months Ended September 30, 2019

Net sales during the nine-month period ended September 30, 2019 were RMB248.8 million (US$34.8 million), compared to RMB243.40 million, during the same period in 2018, representing an increase of RMB5.4 million or 2.2%, mainly due to the increase in sales prices in the first nine months of 2019.

In the nine-month period ended September 30, 2019, sales of specialty films were RMB114.7 million (US$16.0 million) or 46.1% of total revenues as compared to RMB109.0 million or 44.8% in the same period of 2018, which was an increase of RMB5.7 million, or 5.2% as compared to the same period in 2018. The increase of average sales price in the first nine months of 2019 caused an increase of RMB1.8 million and the increase in the sales volume caused an increase of RMB3.9 million.

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


Nine-Month Period Ended
September 30, 2019

% of

Total


Nine-Month Period Ended
September 30, 2018

% of Total


RMB

US$



RMB

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