Asia Bio-Chem Group Corp. Announces Third Quarter 2011 Financial Results

TORONTO, Nov. 10, 2011 /CNW/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia Bio-Chem" or the "Company") today announced its interim financial statements for the period ending September 30, 2011.

Interim Financial Results

Highlights

  • Strong by-products prices, higher starch prices and higher sales volumes contributed to a 38.5% improvement in revenues during the third quarter of 2011 to $69.1 million compared with the same period in 2010.

  • Record high corn costs have caused gross margin to decline to 2.5% during the third quarter compared with 12.0% during the same period in 2010.

  • Lower gross margin together with higher operating expenses during the third quarter resulted in a net loss of $4.3 million or $0.05 loss per share compared with $1.7 million net income or $0.02 earnings per share during the third quarter of 2010.

  • The Company continues to enjoy a good relationship with its banking group with total bank borrowings of $80.7 million at September 30, 2011. During the third quarter, the Company secured an additional $4.9 million loan from Shanghai Pudong Development Bank.

  • The company maintains a total cash balance of $11.2 million at September 30, 2011

"As a result of record high corn prices, the third quarter was one of the most challenging for our industry," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.  "We believe that the current market situation is temporary and with the upcoming record corn harvest we are confident that supply will be replenished and corn prices will ease allowing us to return to profitability.  We have reduced our capital expenditures and implemented a cost cutting program in an effort to preserve cash and reduce our losses."

During the third quarter the company experienced a 38.5% improvement in revenues compared with the same periods of 2010.  This increase was partly due to higher prices for by-products particularly germ where we realized a 35.7% improvement in prices from the third quarter of 2010.  Higher starch prices and higher sales volumes also contributed to the improvement in revenues.

Higher product prices were, however not sufficient to offset the 22.3% increase in the Corn costs experienced in the third quarter compared with the same quarter of 2010. Compared with the second quarter of 2011, corn prices increased by 7.3% as demand for corn from the feed industry continued to push prices to record levels.

Consequently, gross margins were reduced to 2.5% resulting in a loss from operations of $3.2 million for the third quarter compared with a profit of $2.3 million during the same period of 2010.

SUMMARY FINANCIAL STATEMENTS

in thousands of Canadian dollars except per share and percentage data     Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2011   2010   2011 2010
Sales     69,102               49,902             188,922           146,719
Gross profit     1,732                 5,983               18,124             22,347
Gross margin (% of Sales)     2.5%   12.0%   9.6% 15.2%
Operating expenses     4,915                 3,711               15,998             11,479
Income from operations     (3,183)                 2,272                 2,126             10,868
Other income (expense)     (1,221)                  (641)               (2,718)             (2,278)
Income taxes     (121)                   (57)                   (92)                 310
Net income     (4,283)                 1,688                  (500)               8,279
EBITDA     (1,440)                 3,979                 7,893             15,764
EBITDA before stock-based compensation   (1,293)                 4,330               8,708             17,376
Earnings per share:                
 Basic       (0.05)                  0.02                 (0.01)                0.11
 Diluted       (0.05)                  0.02                 (0.01)                0.11
Weighted average number of shares:              
 Basic       85,306,258         76,893,058         84,330,434       76,837,296
 Diluted       86,306,258         78,257,905         84,330,434       78,202,143
                 
Balance Sheet Highlights     As at 9/30/11   As at 12/31/10      
Cash     6,073                 5,642      
Working Capital     (2,599)             (11,981)      
Total assets     212,659             170,850      
Current Ratio     0.97:1   0.82:1      

Higher transportation and administrative expenses combined with lower gross profits caused EBITDA before stock-based compensation to decline to negative $1.3 million during the third quarter compared with positive $4.3 million during the same period of 2010.

Losses during the quarter combined with higher receivables caused the Company's cash position to decline to $11.2 million at September 30, 2011 from $18.4 million at June 30, 2011.

Daqing Downstream Update
As indicated in our previous quarter and update, management has chosen to preserve capital and reduce the immediate commitments to the Daqing downstream project by delaying completion by approximately 6 months. Management remains committed to downstream expansion and expects to commence construction when cash flows improve and additional debt financing can be secured.

Conference Call
The Company will be hosting a conference call to discuss second quarter results on Friday, November 11, 2011. The conference call and replay details are as follows:

          Date:                  Friday, November 11, 2011
                 
          Time:                  9:00 AM EST
                 
          Dial in number:        1-888-231-8191 or 647-427-7450
                 
          Conference ID and      
          Replay pass code:       25075526
                 
          Taped Replay:          1-800-642-1687 or  416-849-0833
                (Available until November 25, 2011)

About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the People's Republic of China ("PRC"), is in the business of processing corn. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 900,000 tonnes of corn per year, which are processed into cornstarch, corn germ, gluten, and fiber for sale into the domestic Chinese market.

This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects,", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.

SOURCE Asia Bio-Chem Group Corp.

For further information:

For Corporate Information regarding Asia Bio-Chem: 

Robert Wilson
Executive Vice President
Asia Bio-Chem Group Corp.
Tel: 416-603-7500
Email: robert.wilson@asiabiochem.com
 

 

Profil de l'entreprise

Asia Bio-Chem Group Corp.

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