TSX Venture: ABC
TORONTO, March 26 /CNW/ - Asia Bio-Chem Group Corp. (TSXV: ABC) ("Asia Bio-Chem" or the "Company") today announced its interim financial statements for the three month and fiscal year ending December 31, 2009. The Company will also provide an update on its operations at the newly opened Daqing plant
Interim Financial Results
- In October of 2009 the Company began trial production at its new
Daqing facility and began ramping up the production in January 2010.
The Daqing facility is among the largest of its kind in China.
- During fiscal 2009 the Company's Changtu plant continued to operate
at above industry average utilization rates generating more than
270,000 tonnes of cornstarch and related by-products and revenues of
- After experiencing extremely challenging market conditions in the
first quarter of 2009, the market for the Company's products has
improved significantly throughout the year. Driven by improved
economic activity and higher prices for sweeteners, the Company has
experienced improved gross margins for the past three consecutive
quarters to 19.6% in the fourth quarter.
- Cash flow and earnings have continuously improved throughout the
year, as EBITDA before stock based compensation has risen from
$1 million in the first quarter to $3.0 million in the fourth quarter
to a total of $8.3 million for the year. Net income increased to
$1.7 million in the fourth quarter to total of $2.1 million for the
- The Company has been successful in securing $52 million in debt
financing during fiscal 2009 at attractive terms. The company secured
operating loans for both of its facilities and a six year term loan
from China Construction bank. In addition, the Company was successful
in securing a five year term loan from the local government at a cost
of only 1% per year. As at December 31, 2009, the Company had
$14.1 million in cash and $48.9 million in carrying balance for the
government and bank debt.
- Daqing Update:
The disruptions at the Daqing plant relating to coal supply and rail
car availability have been resolved. During February the Daqing plant
achieved continuous production and volumes surpassed those of the
"We are pleased to report that the market for our products have improved steadily through the year and we are now achieving near our historical gross margins. The Daqing facility is now fully operational and our Company is well positioned to take advantage of this improvement in demand." stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.
Gross profit, EBITDA and earnings have all improved each quarter during fiscal 2009 primarily due to improved markets for starch which has been driven by higher sweetener prices.
Given the depressed state of the market for the Company's products during the first part of the fiscal 2009, gross profit was down on a year over year basis to $14.4 million. Income from operations during 2009 was $3.0 million reflecting the impacted of lower gross margins and higher operating costs. After adjusting for non-cash, stock based compensation, EBITDA was $8.3 million for 2009 compared with $14.4 million in fiscal 2008.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars except Twelve Months Ended
per share and percentage data December 31,
Sales 88,731 84,449
Gross profit 14,396 18,486
Gross margin (% of Sales) 16.2% 21.9%
Operating expenses * 11,429 7,473
Income from operations 2,967 11,013
Other income (expense) 82 (393)
Income taxes 940 1,896
Net income 2,109 8,723
EBITDA 4,962 11,691
EBITDA before stock-based compensation 8,341 14,361
Earnings per share
Basic 0.03 0.14
Diluted 0.03 0.14
Weighted average number of shares
Basic 76,777,025 61,177,213
Diluted 76,777,025 61,177,213
Balance Sheet Highlights As at As at
Cash 14,119 10,489
Working Capital 1,685 5,154
Total assets 142,282 113,144
Current Ratio 1.04:1 1.28:1
* Includes non-cash charge for stock-based compensation expense of
$3.38 million in 2009 and $2.67 million in 2008.
During the fourth quarter, the Company's cash position increased to $14.1 million as at December 31, 2009. Drawdown of the China Construction bank operating line of credit in the fourth quarter of 2009 enabled the company to finance its working capital buildup at Daqing while contributed to the Company's cash position.
As reported on January 15th 2010, the Daqing plant had been experiencing some production disruptions due to shortages in rail cars and limited coal supply. The company is pleased to announce that as of early February of this year, these issues have been resolved and the plant has achieved continuous production.
On a combined basis from both the Company's facilities, for January and February, the Company experienced over 50% capacity even after lower Daqing January volumes. Managements expects to achieve continued improvements in capacity over the coming months.
The remaining commitments in 2010 relating to the Daqing plant represent $4.4 million in construction payments, $7.4 million in vendor notes due and $1.5 million repayment of the current portion of a bank loan. These obligations are expected to be financed with a combination of cash and cash flow from operations.
Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 10 am Friday, March 26, 2009. The details are as follows:
Dial in number: 1-888-231-8191 or 647-427-7451
Taped replay: 1-800-642-1687 or 416-849-0833
Pass Code: 59455725 (available until April 9th , 2010)
About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the Peoples Republic of China ("PRC") is in the business of manufacturing cornstarch and related byproducts. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 900,000 tonnes of corn. The Company products include cornstarch, corn germ, gluten and fiber which are sold 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.
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SOURCE Asia Bio-Chem Group Corp.
For further information: For further information: For Corporate Information: Asia Bio-Chem Group Corp., Suite 2105 - 130 Adelaide Street West, Toronto, Ontario, M5H 3P5, Attention: Robert Wilson, Tel: (416) 603-7500