Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2020
-Teleconference to be Held on Friday, September 4, 2020 at 9:00 am ET-
BEIJING, Sept. 4, 2020 /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 second quarter of 2020 ended June 30, 2020.
Second Quarter 2020 Financial Highlights
- Net sales during the second quarter ended June 30, 2020 were RMB82.9 million (US$11.7 million), compared to RMB88.1 million during the same period in 2019.
- Sales of specialty films were RMB48.1 million (US$6.8 million) or 58.0% of our total revenues as compared to RMB42.0 million or 47.6% in the same period of 2019, which was an increase of RMB6.1 million, or 14.5% year-over-year.
- Overseas sales were RMB7.5 million (US$1.1 million), or 9.1% of total revenues, compared with RMB14.3 million in the second quarter of 2019.
- Gross profit was RMB34.4 million (US$4.9 million) for the second quarter ended June 30, 2020, representing a gross profit rate of 41.6%, as compared to a gross profit rate of 21.1% for the same period in 2019.
- Net profit attributable to the Company was RMB14.1 million (US$2.0 million) while net profit attributable to the Company was RMB1.0 million during the same period in 2019.
First Six Months 2020 Financial Highlights
- Net sales were RMB166.1 million (US$23.5 million), compared to RMB169.2 million in the same period in 2019.
- Sales of specialty films were RMB88.0 million (US$12.5 million) or 53.0% of our total revenues as compared to RMB74.2 million or 43.8% in the same period of 2019, which was an increase of RMB13.8 million, or 18.6% year-over-year.
- Overseas sales were RMB13.3 million or US$1.9 million, or 8.0% of total revenues.
- Gross profit was RMB64.2 million (US$9.1 million), representing a gross margin rate of 38.7%, as compared to a gross margin rate of 18.3% for the same period in 2019.
- Net profit attributable to the Company was RMB27.0 million (US$3.8 million) while net loss attributable to the Company was RMB2.4 million during the same period in 2019.
Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, “Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant and adverse effects on the global economy, we achieved positive trends in our mix of sales, especially sales of specialty films which accounted for 58% of our total revenues. In addition, we achieved net profit for five consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions.”
Second Quarter 2020 Results
Net sales during the second quarter ended June 30, 2020 were RMB82.9 million (US$11.7 million), compared to RMB88.1 million during the same period in 2019. The decrease of average sales price caused a decrease of RMB3.6 million and lower sales volume caused a decrease of RMB1.6 million.
In the second quarter of 2020, sales of specialty films were RMB48.1 million (US$6.8 million) or 58.0% of our total revenues as compared to RMB42.0 million or 47.6% in the same period of 2019, which was an increase of RMB6.1 million, or 14.5% year-over-year. The increase of sales volume caused an increase of RMB8.9 million and the decrease in the average sales price caused a decrease of RMB2.8 million.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
|
Three-Month Period |
% of |
Three-Month Period |
% of |
|||
|
RMB |
US$ |
RMB |
||||
|
Stamping and transfer film |
25,885 |
3,665 |
31.3% |
28,596 |
32.4% |
|
|
Printing film |
5,746 |
813 |
6.9% |
8,512 |
9.7% |
|
|
Metallization film |
1,159 |
164 |
1.4% |
1,938 |
2.2% |
|
|
Specialty film |
48,088 |
6,806 |
58.0% |
41,958 |
47.6% |
|
|
Base film for other |
1,978 |
280 |
2.4% |
7,113 |
8.1% |
|
|
82,856 |
11,728 |
100.0% |
88,117 |
100.0% |
Overseas sales were RMB7.5 million or US$1.1 million, or 9.1% of total revenues, compared with RMB14.3 million or 16.3% of total revenues in the second quarter of 2019. The increase of average sales price caused an increase of RMB0.5 million and the decrease in sales volume resulted in a decrease of RMB7.3 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
|
Three-Month Period |
% of Total |
Three-Month Period |
% of Total |
|||
|
RMB |
US$ |
RMB |
||||
|
Sales in China |
75,334 |
10,663 |
90.9% |
73,777 |
83.7% |
|
|
Sales in other countries |
7,522 |
1,065 |
9.1% |
14,340 |
16.3% |
|
|
82,856 |
11,728 |
100.0% |
88,117 |
100.0% |
Gross profit was RMB34.4 million (US$4.9 million) for the second quarter ended June 30, 2020, representing a gross profit rate of 41.6%, as compared to a gross profit rate of 21.1% for the same period in 2019. Correspondingly, gross profit rate increased by 20.5 percentage point compared to the same period in 2019. Our average product sales prices decreased by 4.2% compared to the same period last year while the average cost of goods sold decreased by 29.0% due to the decrease in raw materials cost. Consequently, it resulted in an increase in our gross profit.
Operating expenses for the second quarter ended June 30, 2020 were RMB18.7 million (US$2.7 million), as compared to RMB15.0 million for the same period in 2019. The increase was mainly due to the change of accounting estimate which caused the increase of accrual depreciation of the third production line.
Net profit attributable to the Company during the second quarter ended June 30, 2020 was RMB14.1 million (US$2.0 million) while net profit attributable to the Company was RMB1.0 million during the same period in 2019.
Financial Results for the Six Months Ended June 30, 2020
Net sales during the six-month period ended June 30, 2020 were RMB166.1 million (US$23.5 million), compared to RMB169.2 million in the same period in 2019. The increase in average sales price caused an increase of RMB0.7 million and the decrease in the sales volume caused a decrease of RMB3.8 million.
In the six-month period ended June 30, 2020, sales of specialty films were RMB88.0 million (US$12.5 million) or 53.0% of our total revenues as compared to RMB74.2 million or 43.8% in the same period of 2019, which was an increase of RMB13.8 million, or 18.6% year-over-year. The increase in sales volume caused an increase of RMB17.7 million and the decrease in the average sales price caused a decrease of RMB3.9 million.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
|
Six-Month Period |
% of |
Six-Month Period |
% of |
|||
|
RMB |
US$ |
RMB |
||||
|
Stamping and transfer film |
60,406 |
8,548 |
36.3% |
60,123 |
35.6% |
|
|
Printing film |
11,591 |
1,641 |
7.0% |
20,732 |
12.3% |
|
|
Metallization film |
2,661 |
377 |
1.6% |
2,614 |
1.5% |
|
|
Specialty film |
87,965 |
12,451 |
53.0% |
74,154 |
43.8% |
|
|
Base film for other |
3,466 |
491 |
2.1% |
11,568 |
6.8% |
|
|
166,089 |
23,508 |
100.0% |
169,191 |
100.0% |
Overseas sales during the six months ended June 30, 2020 were RMB13.3 million (US$1.9 million), or 8.0% of total revenues, compared with RMB30.6 million or 18.1% of total revenues in the same period in 2019. The decrease in sales volume resulted in a decrease of RMB18.2 million and was mainly due to the antidumping measures while higher average sales price caused an increase of RMB0.9 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
|
Six-Month Period |
% of Total |
Six-Month Period |
% of Total |
|||
|
RMB |
US$ |
RMB |
||||
|
Sales in China |
152,783 |
21,625 |
92.0% |
138,631 |
81.9% |
|
|
Sales in other countries |
13,306 |
1,883 |
8.0% |
30,560 |
18.1% |
|
|
166,089 |
23,508 |
100.0% |
169,191 |
100.0% |
Our gross profit was RMB64.2 million (US$9.1 million) for the first six months ended June 30, 2020, representing a gross margin rate of 38.7%, as compared to a gross margin rate of 18.3% for the same period in 2019. Correspondingly, gross margin rate increased by 20.4 percentage points. Our average product sales prices increased by 0.4% compared to the same period last year while the average cost of goods sold decreased by 24.6%. Consequently, it resulted in an increase in our gross margin.
Operating expenses for the six months ended June 30, 2020 were RMB33.8 million (US$4.8 million), compared to RMB28.5 million in the same period in 2019. This increase was mainly due to the change of accounting estimate which caused the increase of accrual depreciation of the third production line.
Net income attributable to the Company during the first half of 2020 was RMB27.0 million (US$3.8 million) compared to net loss attributable to the Company of RMB2.4 million during the same period in 2019, representing an increase of RMB29.4 million from the same period in 2019 due to the factors described above.
Cash, cash equivalent and restricted cash totaled RMB81.3 million (US$11.5 million) as of June 30, 2020. Total shareholders’ equity was RMB235.2 million (US$33.3 million).
As of June 30, 2020, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Friday, September 4, 2020, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 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: 36765. The replay will be available until September 18, 2020.
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 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 uncertainty 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 countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company’s operation, fluctuations of the RMB exchange rate, 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: [email protected]
In the U.S.:
Shiwei Yin
Investor Relations
Grayling
Phone: +1-646-284-9474
Email: [email protected]
Financial Tables to Follow
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2020 AND DECEMBER 31, 2019 (amounts in thousands except share and per share value) (Unaudited) |
|||||
|
June 30, 2020 |
December 31, 2019 |
||||
|
RMB |
US$ |
RMB |
|||
|
ASSETS |
|||||
|
Current assets |
|||||
|
Cash and cash equivalents |
76,318 |
10,802 |
60,871 |
||
|
Restricted cash |
5,000 |
708 |
25,500 |
||
|
Accounts and bills receivable, net |
41,829 |
5,921 |
26,960 |
||
|
Inventories |
26,107 |
3,695 |
23,584 |
||
|
Advance to suppliers |
8,852 |
1,253 |
6,277 |
||
|
Prepayments and other receivables |
1,156 |
164 |
1,058 |
||
|
Deferred tax assets – current |
1,290 |
183 |
1,266 |
||
|
Total current assets |
160,552 |
22,726 |
145,516 |
||
|
Property, plant and equipment, net |
285,888 |
40,465 |
302,642 |
||
|
Construction in progress |
999 |
141 |
– |
||
|
Lease prepayments, net |
15,485 |
2,192 |
15,762 |
||
|
Advance to suppliers – long term, net |
1,542 |
218 |
1,542 |
||
|
Deferred tax assets – non current |
439 |
62 |
509 |
||
|
Total assets |
464,905 |
65,804 |
465,971 |
||
|
LIABILITIES AND EQUITY |
|||||
|
Current liabilities |
|||||
|
Short-term borrowings |
65,000 |
9,200 |
65,000 |
||
|
Due to related parties |
– |
– |
119,297 |
||
|
Accounts payables |
20,711 |
2,931 |
19,532 |
||
|
Notes payable |
10,000 |
1,415 |
41,000 |
||
|
Advance from customers |
4,411 |
624 |
5,204 |
||
|
Accrued expenses and other payables |
127,414 |
18,034 |
5,454 |
||
|
Total current liabilities |
227,536 |
32,204 |
255,487 |
||
|
Deferred tax liabilities |
2,163 |
306 |
2,290 |
||
|
Total liabilities |
229,699 |
32,510 |
257,777 |
||
|
Equity |
|||||
|
Shareholders’ equity |
|||||
|
Registered capital (of US$0.519008 par value; 5,000,000 shares |
13,323 |
1,886 |
13,323 |
||
|
Additional paid-in capital |
311,907 |
44,148 |
311,907 |
||
|
Statutory reserve |
37,441 |
5,299 |
37,441 |
||
|
Accumulated deficit |
(128,305) |
(18,160) |
(155,317) |
||
|
Cumulative translation adjustment |
840 |
121 |
840 |
||
|
Total shareholders’ equity |
235,206 |
33,294 |
208,194 |
||
|
Total equity |
235,206 |
33,294 |
208,194 |
||
|
Total liabilities and equity |
464,905 |
65,804 |
465,971 |
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019 (amounts in thousands except share and per share value) (Unaudited) |
|||||||||||
|
The Three-Month Period Ended June 30, |
The Six-Month Period Ended June 30, |
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
|
RMB |
US$ |
RMB |
RMB |
US$ |
RMB |
||||||
|
Net sales |
82,856 |
11,728 |
88,117 |
166,089 |
23,508 |
169,191 |
|||||
|
Cost of sales |
48,421 |
6,854 |
69,488 |
101,895 |
14,422 |
138,158 |
|||||
|
Gross profit |
34,435 |
4,874 |
18,629 |
64,194 |
9,086 |
31,033 |
|||||
|
Operating expenses |
|||||||||||
|
Selling expenses |
3,372 |
477 |
3,537 |
7,458 |
1,056 |
6,501 |
|||||
|
Administrative expenses |
15,368 |
2,175 |
11,453 |
26,323 |
3,726 |
22,030 |
|||||
|
Total operating |
18,740 |
2,652 |
14,990 |
33,781 |
4,782 |
28,531 |
|||||
|
Operating income |
15,695 |
2,222 |
3,639 |
30,413 |
4,304 |
2,502 |
|||||
|
Other income (expense) |
|||||||||||
|
– Interest income |
567 |
80 |
202 |
857 |
121 |
416 |
|||||
|
– Interest expense |
(2,241) |
(317) |
(2,244) |
(4,457) |
(631) |
(4,435) |
|||||
|
– Others income |
49 |
7 |
(630) |
118 |
17 |
(872) |
|||||
|
Total other expenses |
(1,625) |
(230) |
(2,672) |
(3,482) |
(493) |
(4,891) |
|||||
|
Income(loss) before |
14,070 |
1,992 |
967 |
26,931 |
3,811 |
(2,389) |
|||||
|
Income tax benefit |
(13) |
(2) |
(16) |
81 |
11 |
(33) |
|||||
|
Net income (loss) |
14,057 |
1,990 |
951 |
27,012 |
3,822 |
(2,422) |
|||||
|
Net income (loss) |
– |
– |
– |
– |
– |
– |
|||||
|
Net income (loss) |
14,057 |
1,990 |
951 |
27,012 |
3,822 |
(2,422) |
|||||
|
Other comprehensive |
|||||||||||
|
– Foreign currency |
– |
– |
– |
– |
– |
– |
|||||
|
– Foreign currency |
– |
– |
– |
– |
– |
(1) |
|||||
|
Comprehensive loss |
– |
– |
– |
– |
– |
– |
|||||
|
Comprehensive income(loss ) |
14,057 |
1,990 |
951 |
27,012 |
3,822 |
(2,423) |
|||||
|
Earnings (loss) per |
4.30 |
0.61 |
0.29 |
8.27 |
1.17 |
(0.74) |
|||||
|
Weighted average |
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, 2020 AND 2019 (amounts in thousands except share and per share value) (Unaudited) |
|||||
|
The Six-Month Period Ended June 30, |
|||||
|
2020 |
2019 |
||||
|
RMB |
US$ |
RMB |
|||
|
Cash flow from operating activities |
|||||
|
Net income (loss) |
27,012 |
3,822 |
(2,422) |
||
|
Adjustments to reconcile net loss to net cash |
|||||
|
used in operating activities |
|||||
|
– Depreciation of property, plant and equipment |
17,986 |
2,546 |
23,892 |
||
|
– Amortization of intangible assets |
267 |
38 |
267 |
||
|
– Deferred income taxes |
(81) |
(11) |
33 |
||
|
– Bad debt recovery |
160 |
23 |
(903) |
||
|
-Inventory provision |
– |
– |
724 |
||
|
Changes in operating assets and liabilities |
|||||
|
– Accounts and bills receivable |
(15,026) |
(2,127) |
(222) |
||
|
– Inventories |
(2,523) |
(357) |
(323) |
||
|
– Advance to suppliers |
(2,497) |
(353) |
794 |
||
|
– Prepaid expenses and other current assets |
(87) |
(12) |
(116) |
||
|
– Accounts payable |
1,176 |
168 |
1,692 |
||
|
– Accrued expenses and other payables |
210 |
30 |
319 |
||
|
– Advance from customers |
(793) |
(112) |
2,203 |
||
|
– Tax payable |
65 |
9 |
(212) |
||
|
Net cash provided by (used in) operating activities |
25,869 |
3,664 |
25,726 |
||
|
Cash flow from investing activities |
|||||
|
Purchases of property, plant and equipment |
(1,232) |
(174) |
(3,574) |
||
|
Restricted cash related to trade finance |
– |
– |
– |
||
|
Advanced to suppliers – non current |
– |
– |
– |
||
|
Amount change in construction in progress |
(999) |
(141) |
83 |
||
|
Net cash provided by (used in) investing activities |
(2,231) |
(315) |
(3,491) |
||
|
Cash flow from financing activities |
|||||
|
Principal payments of bank loans |
– |
– |
– |
||
|
Proceeds from (payment to) short-term bank loans |
– |
– |
– |
||
|
Proceeds from (payment to) related party |
2,309 |
327 |
2,296 |
||
|
Change in notes payable |
(31,000) |
(4,388) |
1,980 |
||
|
Net cash (used in) provided by financing activities |
(28,691) |
(4,061) |
4,276 |
||
|
Effect of foreign exchange rate changes |
– |
(185) |
– |
||
|
Net increase in cash and cash equivalent |
(5,053) |
(897) |
26,511 |
||
|
Cash and cash equivalent |
|||||
|
At beginning of period |
86,371 |
12,407 |
46,908 |
||
|
At end of period |
81,318 |
11,510 |
73,419 |
||
|
SUPPLEMENTARY DISCLOSURE: |
|||||
|
Interest paid |
4,457 |
631 |
4,435 |
||
|
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: |
|||||
|
Account payable for plant and equipment: |
1,010 |
143 |
1,010 |
Related Links :
http://www.fuweifilms.com
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