China Ceramics Announces Third Quarter 2012 Financial Results
China Ceramics Announces Third Quarter 2012 Financial Results
PR Newswire
JINJIANG, China, Nov. 14, 2012
JINJIANG, China, Nov. 14, 2012 /PRNewswire/ -- China Ceramics Co., Ltd.
(NASDAQ Global Market: CCCL, CCCLW, CCCLU) ("China Ceramics" or the
"Company"), a leading Chinese manufacturer of ceramic tiles used for exterior
siding and for interior flooring and design in residential and commercial
buildings, today announced financial results for the third quarter ended
September 30, 2012.
Third Quarter 2012 Highlights
o Revenue was RMB 386.3 million (US$ 62.1 million), down 5.1% from the third
quarter of 2011;
o Gross profit was RMB 110.0 million (US$ 17.7 million), down 7.6% from the
third quarter of 2011;
o Gross profit margin was 28.5%, down 79 basis points from the third quarter
of 2011;
o Net profit was RMB 72.8 million (US$ 11.7 million), down 4.0% from the
third quarter of 2011;
o On a quarter-to-quarter sequential basis, revenue was down 12.4%, gross
profit was down 14.4% and net profit was down 15.4%.
o Non-GAAP net profit, which excludes the current quarter's share-based
compensation expenses, was RMB 74.1 million (US$ 11.9 million), down 5.4%
from RMB 78.3 million (US$ 12.2 million) in the third quarter of 2011;
o Earnings per fully diluted share were RMB 3.56 (US$ 0.57).
"We achieved reasonable revenue and cash flow generation in the third quarter
despite challenging conditions in China's real estate and construction
markets. The quarter's results were driven by higher average selling prices
achieved through sales of our higher margin ceramic tile products, but our
overall sales volume was down significantly causing a modest decline in
revenue and earnings," said Mr. Jiadong Huang, CEO of China Ceramics. "We are
utilizing production facilities capable of producing 56 million square meters
per year out of a total annual productive capacity of 72 million square
meters. As our backlog of orders for the fourth quarter is substantially lower
than that of previously quarters, we will pay careful attention to the current
macroeconomic environment and act with caution as to how to manage the
utilization of our existing production capacity.
"Although the rest of 2012 and the beginning of 2013 continues to look
challenging, we are confident that our current strategies will enable us to
weather current market conditions and succeed in our market segment in the
long term," CEO Mr. Huang continued. "We are intent upon utilizing our new
plant and technologies enabled by our 2011 and 2012 capacity expansion to
offer the best possible product mix to our customers. Our new modern
facilities enable us to operate efficiently and at a reasonably high level of
utilization and effectively compete even in today's difficult market
environment. We anticipate that our experience and knowledge of our customers
will enable us to continue to optimally service our Tier II and Tier III
markets and generate sustained positive results over time."
Third Quarter 2012 Results
Revenue for the third quarter ended September 30, 2012 was RMB 386.3 million
(US$ 62.1 million), down 5.1% from RMB 406.9 million (US$ 63.4 million) for
the third quarter ended September 30, 2011. The year-over-year decrease in
revenue was primarily driven by a 16.4% decrease in the sales volume of
ceramic tiles to 12.2 million square meters in the third quarter of 2012 from
14.6 million square meters in the third quarter of 2011. The decrease in
revenue was partially offset by a 14.0% increase in the Company's average
selling price which increased in the third quarter of 2012 to RMB 31.7 per
square meter compared to RMB 27.8 per square meter in the comparable quarter
of 2011. This occurred due to a change in the sales mix with more sales coming
from the higher-priced rustic and glazed series of ceramic tiles that are
being produced in the Company's Hengdali facility.
Gross profit for the third quarter ended September 30, 2012 was RMB 110.0
million (US$ 17.7 million), down 7.6% from RMB 119.1 million (US$ 18.6
million) for the third quarter ended September 30, 2011. The year-over-year
decrease in gross profit was mostly driven by the lower sales volume of our
tiles in the most recent quarter. Gross profit margin was 28.5% for the third
quarter ended September 30, 2012 compared to 29.3% for the same period in
2011. The year-over-year decrease in gross profit margin was driven by
increased material cost and labor cost.
Administrative expenses for the third quarter ended September 30, 2012 were
RMB 6.6 million (US$ 1.1 million), down 24.1% from RMB 8.7 million (US$ 1.4
million) in the third quarter of 2011. The year-over-year decrease in
administrative expenses was primarily due to a reduction to RMB 1.3 million
(US$ 0.2 million) of non-cash share-based compensation expenses related to the
2010 Incentive Compensation Plan, which is designed to retain directors and
senior management. The comparable non-cash share-based expenses were RMB 2.4
million (US$ 0.4 million) in the same period in 2011. It is expected that
additional non-cash share-based compensation expenses of approximately RMB 3.8
million (US$ 0.6 million) will be incurred from October 2012 to January 2014.
Profit from operations before taxation for the third quarter ended September
30, 2012 was RMB 97.9 million (US$ 15.7 million), down 4.3% from RMB 102.3
million (US$ 15.9 million) in the third quarter of 2011. The year-over-year
decrease in profit from operations was the result of lower gross profit
partially offset by lower administrative expenses.
Net profit for the third quarter ended September 30, 2012 was RMB 72.8 million
(US$ 11.7 million), down 4.0% from RMB 75.8 million (US$ 11.8 million) in the
comparable period of 2011. The year-over-year decrease in net profit was the
result of lower gross profit partially offset by the aforementioned lower
administrative expenses and a lower income tax expense.
Earnings per fully diluted share were RMB 3.56 (US$ 0.57) for the third
quarter ended September 30, 2012, down 14.4% from RMB 4.16 (US$ 0.65) over the
same period in 2011. Earnings per fully diluted share in the third quarter of
2012 were computed using 20.4 million shares, while net earnings per fully
diluted share in the third quarter of 2011 were computed using 18.3 million
shares.
Non-GAAP profit before taxation, which excludes share-based compensation
expenses, was RMB 99.2 million (US$ 16.0 million) in the third quarter ended
September 30, 2012, down 5.3% from RMB 104.7 million (US$ 16.3 million) in
2011.
Non-GAAP net profit, which excludes share-based compensation expenses, was RMB
74.1 million (US$ 11.9 million) in the third quarter ended September 30, 2012,
a decrease of 5.4% from RMB 78.3 million (US$ 12.2 million) in the third
quarter of 2011.
Non-GAAP earnings per fully diluted share, which excludes share-based
compensation expenses, was RMB 3.63 (US$ 0.58) in the third quarter ended
September 30, 2012, down 15.4% from RMB 4.29 (US$ 0.67) in the same period of
2011.
Nine Months 2012 Results
Revenue for the nine months ended September 30, 2012 increased by 10.3% to RMB
1,199.6 million (US$ 190.7 million) compared to the nine months ended
September 30, 2011. Gross profit was RMB 351.7 million (US$ 55.9 million), up
7.3% from RMB 327.9 million (US$ 50.5 million) in the nine months ended
September 30, 2011. Gross margin was 29.3% compared to 30.2% in the same
period of 2011. Selling expenses were RMB 8.8 million (US$ 1.4 million),
compared to RMB 8.7 million (US$ 1.3 million) in the same period of 2011.
Administrative expenses were RMB 23.3 million (US$ 3.7 million), compared to
RMB 33.9 million (US$ 5.2 million) for the same period of 2011. Net profit for
the nine months ended September 30, 2012 was RMB 230.5 million (US$ 36.7
million), up 13.9% from the same period of 2011. Non-GAAP net profit, which
excludes share-based compensation expenses, was RMB 234.9 million (US$ 37.4
million) for the nine months ended September 30, 2012, an increase of 9.7%
from RMB 214.2 million (US$ 33.0 million) in the same period of 2011. Earnings
per fully diluted share were RMB 11.28 (US$ 1.79) for the nine months ended
September 30, 2012 and RMB 11.50 (US$ 1.83) on a non-GAAP basis, up from RMB
11.08 (US$ 1.71) and RMB 11.73 (US$ 1.81) on a non-GAAP basis in the same
period of 2011. Earnings per fully diluted share for the nine months 2012 were
computed using 20.4 million shares while net earnings per fully diluted share
for the nine months 2011 were computed using 18.3 million shares.
Third Quarter 2012 Statements of Selected Financial Position Items
o Cash and bank balances were RMB 122.6 million (US$ 19.5 million) as of
September 30, 2012, compared with RMB 42.1 million (US$ 6.7 million) as of
December 31, 2011. The increase in cash and bank balances was the result
of sustained profits and a modest level of capital expenditures made
during the quarter ended September 30, 2012.
o Inventory turnover was 101 days as of September 30, 2012 compared with 84
days as of December 31, 2011. The increase in inventory turnover reflects
a normal pattern when we introduce a new series of ceramic tiles, which
would temporarily be slower moving as we produce a certain amount of the
tiles to have available for developers to test, while thereafter the new
series would only be produced in accordance with actual customer orders.
o Trade receivables turnover was 107 days as of September 30, 2012 compared
with 93 days as of December 31, 2011. The Company's trade receivables
include a 17% value-added-tax ("VAT"), whereas reported revenue is net of
VAT. Trade receivables turnover excluding VAT amounts was 92 days as of
September 30, 2012 compared with 79 days as of December 31, 2011. The
average turnover days were within the Company's past normal collection
range period.
o Trade payables turnover was 78 days as of September 30, 2012 compared with
77 days as of December 31, 2011. The average turnover days were within the
Company's normal credit period.
Liquidity and Capital Resources
Cash flow generated from operating activities was RMB 98.0 million (US$ 15.7
million) for the quarter ended September 30, 2012, compared to RMB 70.0
million (US$ 10.8 million) of cash flow generated from operating activities in
the same period in 2011. The year-over-year increase of RMB 28.0 million (US$
4.9 million) was mainly due to the increase in the receipt of trade
receivables in this quarter.
Cash flow used in investing activities in the quarter ended September 30, 2012
was RMB 18.7 million (US$ 3.0 million) due to acquisition of property, plant
and equipment, compared to RMB 131.0 million (US$ 20.4 million) of cash flow
used in investing activities in the same period of 2011.
Cash flow used in financing activities was RMB 35.0 million (US$ 5.6 million)
due to the repayment of bank borrowings for the quarter ended September 30,
2012, as compared to RMB 58.0 million (US$ 9.0 million) generated from
financing activities for the quarter ended September 30, 2011.
Plant Expansion and Capital Expenditures Update
Given the continued challenging economic climate in China, and consistent with
our previously stated plan, the Company is currently utilizing 56 million
square meters out of a potential annual productive capacity of 72 million
square meters of ceramic tiles. Our Hengda facility has an annual productive
capacity of 42 million square meters of ceramic tiles having undergone a
facility expansion and other capital improvements in fiscal 2010 and fiscal
2011. We are currently utilizing the full productive capacity at our Hengda
facility. The Company's Hengdali facility has a potential annual productive
capacity of 30 million square meters. However, due to persistently challenging
business conditions in China, we are currently utilizing production lines at
our Hengdali facility capable of producing only 14 million square meters of
ceramic tiles annually. The Hengdali facility underwent Phase II of its
expansion program in the fourth quarter of 2011 and the first quarter of 2012
which increased its annual production capacity of ceramic tiles from 10
million square meters to its current potential annual productive capacity of
30 million square meters of ceramic tiles.
Management reviews the levels of capital expenditures throughout the year and
makes adjustments to its capital expenditures subject to market conditions.
The Company had no capital expenditures in the first and second quarters of
2012, and expended $3 million in the third quarter for the replacement of old
equipment at its Hengda facility. As the business outlook in the fourth
quarter is for negative growth relative to past quarters, the Company
anticipates that it will not engage in any material capital expenditures in
the fourth quarter of 2012.
Business Outlook
China Ceramics generated reasonable year-to-year operating results in the
third quarter of 2012 given the substantial slowdown in construction activity
and real estate development in China. This was reflected in the Company's
sales volume (the amount of square meters of ceramic tile sold), which
decreased 16.4% from the comparable year-ago quarter and 10.1% from the second
quarter of 2012 as a result of a contraction in the construction and real
estate sectors. However, the average selling price of the Company's ceramic
tiles rose 14.0% in the third quarter relative to the comparable year-ago
quarter, constituting the fourth double-digit increase in a row of this metric
versus comparable year-ago quarters.
The Company views the increase of its average selling price of ceramic tiles
as attributable to the continued improvement in the Company's product mix as
it continues to transition from lower margin tiles products to higher margin,
more advanced and better performing ceramic tiles. The rustic and glazed
ceramic tile products being produced at its Hengdali facility have an average
selling price per square meter of RMB 61.7, almost double the Company's
average selling price for all of its products of RMB 31.7 per square
meter. Further, these two products comprised 24.4% of total Company sales in
the third quarter of 2012, up from just 7.7% in the comparable year-ago
quarter. The migration to higher margin ceramic tiles was able to sustain
reasonable levels of Company revenue and profitability in the third quarter of
2012, as well as in previous quarters of 2012, relative to their comparable
year-ago periods, However, the slowing economy in China could have a
mitigating effect on the Company's average selling prices for the next two
quarters, and an adverse effect on the demand for the Company's products in
general.
As previously announced, the Company experienced a reduction in its backlog
that would result in a substantial decline in revenues in the fourth quarter
of 2012. To provide a further update of the September 12th news announcement,
the Company's backlog of orders for delivery in the fourth quarter of 2012 is
approximately RMB 290.9 million (US$ 46.3 million), representing a
year-over-year decrease of 28.1% compared to the fourth quarter of 2011. This
year-over-year comparison is significantly changed from that of previous
quarters which had shown strong positive year-over-year comparisons, and now
reflect the impact of weaker customer demand. The Company estimates that its
sales volume of ceramic tiles in the fourth quarter of 2012 will be
approximately 8.7 million square meters. This signifies an estimated 30%
decrease in revenue for the fourth quarter of 2012, and the Company expects
that weakness in demand for our products is likely to continue into the first
quarter of 2013.
As indicated, the Company believes that this reduction has to do with a
general slowdown in the construction industry in China as customers are
deferring orders and/or are waiting to start new projects. Further, some of
the Company's customers may be delaying projects to see if the government
adopts new policies to aid the construction industry. In terms of the
construction sector's long-term fundamentals, continued urbanization trends
favor the building of new residential properties in China, and government
support for an increase in both affordable and senior housing should also
generate opportunities for real estate development companies.
Given the slowdown in domestic demand, the Company believes it is unlikely
that it will bring the unused 16 million square meters of annual productive
capacity at its Hengdali facility online until macroeconomic conditions
change. China Ceramics' total annual production capacity will remain at its
current level of 56 million square meters of ceramic tiles for the remainder
of 2012. The Company's utilization of its online productive capacity of its
two facilities was 86.6% in the third quarter of 2012, a decrease from 96.3%
in the second quarter of 2012.
To mitigate the effects of slowing demand, the Company may plan to shut down
some existing capacity in the 4th quarter of 2012 on a temporary basis in
order to generate cost savings. However, it will maintain its currently wide
range of product offerings and continue to augment it with new products from
its research and development program which has the potential to result in
products that realize higher margins. The Company believes that a core
competitive advantage is its ability to innovate and introduce new products
into the product mix for customers. China Ceramics' new plant facilities have
new design and production capabilities as well as the ability to operate more
efficiently.
In addition, the Company plans to continue to expand its distribution network
and heighten its direct sales efforts to large developers. The Company will
continue to focus on Tier II and Tier III cities where it believes conditions
are generally more stable relative to Tier I cities.
Conference Call Information
The Company will host a conference call at 8:00 am ET on Wednesday, November
14, 2012. Listeners may access the call by dialing +1 (866) 395-5819 five to
ten minutes prior to the scheduled conference call time. International callers
should dial +1 (706) 643-6986. The conference participant pass code is
64536363. A replay of the conference call will be available for 14 days
starting from 11:00 pm ET on November 14, 2012. To access the replay, dial +1
(855) 859-2056. International callers should dial +1 (404) 537-3406. The pass
code is 64536363 for the replay.
About China Ceramics Co., Ltd
China Ceramics Co., Ltd. is a leading manufacturer of ceramic tiles in China.
The Company's ceramic tiles are used for exterior siding, interior flooring,
and design in residential and commercial buildings. China Ceramics' products,
sold under the "Hengda" or "HD", "Hengdeli" or "HDL", the "TOERTO" and
"WULIQIAO" brands, and the "Pottery Capital of Tang Dynasty" brands, are
available in over 2,000 style, color and size combinations and are distributed
through a network of exclusive distributors as well as directly to large
property developers. For more information, please visit
http://www.cceramics.com.
Currency Convenience Translation
The Company's financial information is stated in Renminbi ("RMB"). The
translation of RMB amounts into United States dollars in the earning release
is included solely for the convenience of readers. For statements of financial
position data, translation of RMB into U.S. dollars has been made using
historic spot exchange rates published by www.federalreserve.gov. For
statements of comprehensive income data and statements of cash flows data,
translation of RMB into U.S. dollars has been made using the average of
historical daily exchange rates. Such translations should not be construed as
representations that RMB amounts could be converted into U.S. dollars at that
rate or any other rate, or to be the amounts that would have been reported
under IFRS.
Safe Harbor Statement
Certain of the statements made in this press release are "forward-looking
statements" within the meaning and protections of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements include statements with
respect to our beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions, and future performance, and involve known
and unknown risks, uncertainties and other factors, which may be beyond our
control, and which may cause the actual results, performance, capital,
ownership or achievements of the Company to be materially different from
future results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may,"
"will," "anticipate," "assume," "should," "indicate," "would," "believe,"
"contemplate," "expect," "estimate," "continue," "plan," "point to,"
"project," "could," "intend," "target" and other similar words and expressions
of the future.
All written or oral forward-looking statements attributable to us are
expressly qualified in their entirety by this cautionary notice, including,
without limitation, those risks and uncertainties described in our annual
report on Form 20-F for the year ended December 31, 2011 and otherwise in our
SEC reports and filings, including the final prospectus for our offering. Such
reports are available upon request from the Company, or from the Securities
and Exchange Commission, including through the SEC's Internet website at
http://www.sec.gov. We have no obligation and do not undertake to update,
revise or correct any of the forward-looking statements after the date hereof,
or after the respective dates on which any such statements otherwise are made.
Contact Information:
China Ceramics Co., Ltd. CCG Investor Relations Inc.
Edmund Hen, Chief Financial Officer David Rudnick, Account Manager
Email: info@cceramics.com Email: david.rudnick@ccgir.com
Phone: +1-646-626-4172
FINANCIAL TABLES FOLLOW
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(RMB in thousands)
As at As at
September 30, 2012 December 31, 2011
(Unaudited)
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment 812,815 843,429
Land use rights 30,765 31,267
Goodwill 3,735 3,735
Deferred tax asset 1,854 -
849,169 878,431
Current assets
Inventories 341,351 291,781
Trade receivables 478,448 473,209
Prepayments and other receivables 1,308 26,377
Cash and bank balances 122,615 42,149
943,722 833,516
Current liabilities
Trade payables 234,285 252,682
Accrued liabilities and other payables 47,187 44,349
Interest-bearing bank borrowings 10,000 125,000
Income tax payable 21,716 35,090
313,188 457,121
Non-current liabilities
Long term borrowings 50,000 60,000
Deferred tax liabilities 1,060 1,087
51,060 61,087
Net current assets 630,534 376,395
Net assets 1,428,643 1,193,739
EQUITY
Total shareholders' equity 1,428,643 1,193,739
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(RMB in thousands, except EPS and share data)
Three months ended Nine months ended
June September September September
September 30 30 30 30
30
2012 2012 2011 2012 2011
Revenue 386,282 440,991 406,934 1,199,561 1,087,122
Cost of Sales (276,238) (312,370) (287,786) (847,888) (759,234)
Gross profit 110,044 128,621 119,148 351,673 327,888
Selling and
distribution (2,991) (2,834) (3,143) (8,787) (8,739)
expenses
Administrative (6,611) (7,138) (8,690) (23,342) (33,880)
expenses
Finance costs (1,789) (2,771) (3,126) (8,130) (7,296)
Other expenses (789) (237) (1,842) (1,272) (2,904)
Profit before 97,864 115,641 102,347 310,142 275,069
taxation
Income tax expense (25,053) (29,575) (26,498) (79,594) (72,800)
Net Profit for the 72,811 86,066 75,849 230,548 202,269
period
Attributable to:
Shareholders of the
Company
EPS-Basic 3.56 4.21 4.16 11.28 11.08
EPS-Diluted 3.56 4.21 4.16 11.28 11.08
Shares used in
calculating basic
EPS
Basic 20,430,838 20,430,838 18,254,002 20,430,838 18,254,002
Diluted 20,430,838 20,430,838 18,254,002 20,430,838 18,254,002
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
SALES VOLUME AND AVERAGE SELLING PRICE
Three months ended Nine months ended
June September
September 30 30 September 30 September 30
30
2012 2012 2011 2012 2011
Sales volume 12,196,187 13,567,038 14,643,786 37,482,329 39,807,905
(square meters)
Average Selling
Price (in 31.7 32.5 27.8 32.0 27.3
RMB/square
meter)
Average Selling
Price (in 5.1 5.1 4.3 5.1 4.2
USD/square
meter)
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(RMB in thousands)
Three months ended Nine months ended
September June September September September
30 30 30 30 30
2012 2012 2011 2012 2011
Cash flows from operating
activities
Profit before taxation 97,864 115,641 102,346 310,142 275,068
Adjustments for
Amortization of land use 167 168 167 502 502
rights
Depreciation of property,
plant 16,493 16,413 13,261 49,354 33,388
and equipment
Loss on disposal of
property, - - 313 - 1,155
plant and equipment
Provision for inventory 1,576 4,805 - 7,416 -
Share-based compensation 1,294 1,310 2,401 4,365 11,919
Finance costs 1,789 2,520 3,126 7,879 7,296
Interest income (89) (116) (96) (308) (431)
Operating profit before
working capital 119,094 140,741 121,518 379,350 328,897
Changes
Increase in inventories (8,781) (5,341) (938) (56,986) (79,260)
(Increase)/decrease in trade 37,511 (77,282) (40,495) (5,239) (193,137)
receivables
(Increase)/decrease in other
6,628 11,622 3,272 25,068 (6,527)
receivables and prepayments
Increase/(decrease) in trade (22,957) 10,733 13,629 (18,397) 81,258
payables
Increase/(decrease) in
accrued liabilities and (1,104) 1,340 1,832 3,176 281
other payables
Cash generated from 130,391 81,813 98,818 326,972 131,521
operations
Interest paid (1,861) (2,771) (3,126) (8,218) (7,296)
Income tax paid (30,507) (27,001) (25,708) (94,848) (67,328)
Net cash generated from
operating 98,023 52,041 69,984 223,906 56,888
activities
Cash flows from investing
activities
Proceed from disposal of
property, 780 - 2,263 780 7,772
plant and equipment
Acquisition of property,
plant and (19,520) - (133,381) (19,520) (377,845)
equipment
Interest received 89 116 96 308 431
Net cash generated
from/(used in) investing (18,651) 116 (131,022) (18,432) (369,642)
activities
Cash flows from financing
activities
Bank borrowings obtained - - 68,800 - 140,000
Repayment of short-term (35,000) (50,000) (10,800) (125,000) (42,000)
loans
Net cash generated
from/(used in) financing (35,000) (50,000) 58,000 (125,000) 98,000
activities
Net increase/(decrease) in 44,372 2,157 (3,038) 80,474 (214,754)
cash and cash equivalents
Cash and cash equivalents,
78,274 76,091 51,646 42,149 263,495
beginning of period
Effect of foreign exchange
rate (31) 26 (63) (8) (196)
differences
Cash and cash equivalents,
122,615 78,274 48,545 122,615 48,545
end of period
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMEMTS OF FINANCIAL POSITION
(U.S Dollar in thousands)
As at As at
September 30, 2012 December 31, 2011
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment 129,330 134,007
Land use rights 4,895 4,968
Goodwill 594 593
Deferred tax asset 295 -
135,114 139,568
Current assets
Inventories 54,314 46,359
Trade receivables 76,128 75,185
Prepayments and other receivables 208 4,191
Cash and bank balances 19,510 6,697
150,160 132,432
Current liabilities
Trade payables 37,278 40,147
Accrued liabilities and other payables 7,508 7,047
Interest-bearing bank borrowings 1,591 19,860
Income tax payable 3,455 5,575
49,832 72,629
Non-current liabilities
Long term borrowings 7,956 9,533
Deferred tax liabilities 169 173
8,125 9,706
Net current assets 100,328 59,803
Net assets 227,317 189,665
EQUITY
Total shareholders' equity 227,317 189,665
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(U.S Dollar in thousands, except EPS and share data)
Three months ended Nine months ended
June September September September
September 30
30 30 30 30
2012 2012 2011 2012 2011
Revenue 62,116 69,479 63,397 190,729 167,533
Cost of Sales (44,412) (49,217) (44,825) (134,813) (117,003)
Gross profit 17,704 20,262 18,572 55,916 50,530
Selling and
distribution (480) (447) (490) (1,397) (1,347)
expenses
Administrative (1,065) (1,123) (1,364) (3,711) (5,221)
expenses
Finance costs (290) (436) (486) (1,293) (1,124)
Other expenses (126) (37) (286) (202) (448)
Profit before 15,743 18,219 15,946 49,313 42,390
taxation
Income tax expense (4,030) (4,659) (4,130) (12,655) (11,219)
Net Profit for the 11,713 13,560 11,816 36,658 31,171
period
Attributable to:
Shareholders of
the Company
EPS-Basic 0.57 0.66 0.65 1.79 1.71
EPS-Diluted 0.57 0.66 0.65 1.79 1.71
Shares used in
calculating basic
EPS
Basic 20,430,838 20,430,838 18,254,002 20,430,838 18,254,002
Diluted 20,430,838 20,430,838 18,254,002 20,430,838 18,254,002
CHINA CERAMICS CO., LTD. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S Dollar in thousands)
Three months ended Nine months ended
September June September September September
30 30 30 30 30
2012 2012 2011 2012 2011
Cash flows from operating
activities
Profit before taxation 15,743 18,219 15,946 49,313 42,390
Adjustments for
Amortization of land use 27 26 26 80 77
rights
Depreciation of property,
plant 2,650 2,584 2,064 7,847 5,145
and equipment
Loss on disposal of
property, - - 49 - 178
plant and equipment
Provision for inventory 255 760 - 1,179 -
Share-based compensation 208 206 380 694 1,837
Finance costs 290 396 486 1,253 1,124
Interest income (14) (19) (15) (49) (66)
Operating profit before
working capital 19,159 22,172 18,936 60,317 50,685
changes
Increase in inventories (1,438) (815) (224) (9,061) (12,215)
(Increase)/decrease in trade 5,928 (12,246) (6,395) (833) (29,764)
receivables
(Increase)/decrease in other
1,070 1,833 494 3,986 (1,006)
receivables and prepayments
Increase/(decrease) in trade (3,646) 1,702 2,168 (2,925) 12,522
payables
Increase/(decrease) in
accrued liabilities and (172) 210 280 505 43
other payables
Cash generated from 20,901 12,856 15,259 51,989 20,265
operations
Interest paid (302) (435) (486) (1,307) (1,124)
Income tax paid (4,906) (4,244) (4,004) (15,081) (10,376)
Net cash generated
from/(used in) 15,693 8,177 10,769 35,601 8,765
operating activities
Cash flows from investing
activities
Proceed from disposal of
property, 124 - 355 124 1,198
plant and equipment
Acquisition of property,
plant and (3,104) - (20,802) (3,104) (58,229)
equipment
Interest received 14 19 15 49 66
Net cash generated
from/(used in) investing (2,966) 19 (20,432) (2,931) (56,965)
activities
Cash flows from financing
activities
Bank borrowings obtained - - 10,674 - 21,575
Repayment of short-term (5,642) (7,879) (1,695) (19,875) (6,472)
loans
Net cash generated
from/(used in) financing (5,642) (7,879) 8,979 (19,875) 15,103
activities
Net increase/(decrease) in 7,085 317 (684) 12,795 (33,097)
cash and cash equivalents
Cash and cash equivalents,
12,321 12,083 7,990 6,697 39,923
beginning of period
Effect of foreign exchange
rate 104 (79) 305 18 785
differences
Cash and cash equivalents,
19,510 12,321 7,611 19,510 7,611
end of period
About Non-GAAP Financial Measures
In addition to China Ceramics' condensed consolidation financial results under
International Financial Reporting Standards ("IFRS"), the Company also
provides Non-IFRS financial measures (referred to as Non-GAAP financial
measures) for the third quarter of 2012, including Non-GAAP profit before
taxation, Non-GAAP net income and Non-GAAP earnings per fully diluted shares,
all of which exclude the share-based compensation expenses from their
comparable IFRS measure. The Company believes that these Non-GAAP financial
measures provide investors with another method for assessing China Ceramics'
operating results in a manner that is focused on the performance of its
ongoing operations and excludes share-based compensation expenses incurred for
the stock option program. Readers are cautioned not to view Non-GAAP results
on a stand-alone basis or as a substitute for results under GAAP, or as being
comparable to results reported or forecasted by other companies, and should
refer to the reconciliation of GAAP results with Non-GAAP results below. The
Company believes that both management and investors benefit from referring to
these Non-GAAP financial measures in assessing the performance of China
Ceramics and when planning and forecasting future periods. The accompanying
tables have more details on the GAAP financial measures that are most directly
comparable to Non-GAAP financial measures and the related reconciliation
between these financial measures.
CHINA CERAMICS CO., LTD.
Unaudited Reconciliation of GAAP to Non-GAAP
Three months ended September 30, 2012
GAAP (1) Non-GAAP GAAP (1) Non-GAAP
RMB'000 RMB'000 RMB'000 USD'000 USD'000 USD'000
Profit before taxation 97,864 1,294 99,158 15,743 208 15,951
Net profit 72,811 1,294 74,105 11,713 208 11,921
EPS-Basic 3.56 3.63 0.57 0.58
EPS-Diluted 3.56 3.63 0.57 0.58
CHINA CERAMICS CO., LTD.
Unaudited Reconciliation of GAAP to Non-GAAP
Three months ended June 30, 2012
GAAP (1) Non-GAAP GAAP (1) Non-GAAP
RMB'000 RMB'000 RMB'000 USD'000 USD'000 USD'000
Profit before taxation 115,641 1,310 116,951 18,219 206 18,425
Net profit 86,066 1,310 87,376 13,560 206 13,766
EPS-Basic 4.21 4.28 0.66 0.67
EPS-Diluted 4.21 4.28 0.66 0.67
CHINA CERAMICS CO., LTD.
Unaudited Reconciliation of GAAP to Non-GAAP
Three months ended September 30, 2011
GAAP (1) Non-GAAP GAAP (1) Non-GAAP
RMB'000 RMB'000 RMB'000 USD'000 USD'000 USD'000
Profit before taxation 102,347 2,401 104,748 15,946 380 16,326
Net profit 75,849 2,401 78,250 11,816 380 12,196
EPS-Basic 4.16 4.29 0.65 0.67
EPS-Diluted 4.16 4.29 0.65 0.67
CHINA CERAMICS CO., LTD.
Unaudited Reconciliation of GAAP to Non-GAAP
Nine months ended September 30, 2012
GAAP (1) Non-GAAP GAAP (1) Non-GAAP
RMB'000 RMB'000 RMB'000 USD'000 USD'000 USD'000
Profit before taxation 310,142 4,365 314,507 49,313 694 50,007
Net profit 230,548 4,365 234,913 36,658 694 37,352
EPS-Basic 11.28 11.50 1.79 1.83
EPS-Diluted 11.28 11.50 1.79 1.83
CHINA CERAMICS CO., LTD.
Unaudited Reconciliation of GAAP to Non-GAAP
Nine months ended September 30, 2011
GAAP (1) Non-GAAP GAAP (1) Non-GAAP
RMB'000 RMB'000 RMB'000 USD'000 USD'000 USD'000
Profit before taxation 275,069 11,919 286,988 42,390 1,837 44,227
Net profit 202,269 11,919 214,188 31,171 1,837 33,008
EPS-Basic 11.08 11.73 1.71 1.81
EPS-Diluted 11.08 11.73 1.71 1.81
(1) Share-based compensation.
SOURCE China Ceramics Co., Ltd.
Website: http://www.cceramics.com
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