- Year-to-date revenue up 57% and net income up 30% -
TORONTO, June 1 /CNW/ - Boyuan Construction Group, Inc., a leading
builder of commercial, residential and municipal infrastructure projects in
China's fast-growing regions of the Yangtze River Delta and the city of Sanya
on Hainan Island, announced today its financial results for the three and
nine-months ended March 31, 2009. All figures are in U.S. dollars unless
Q3 FY 2009 Financial and Operating Highlights
- Revenue was $15.9 million, down 45% from $28.8 million for Q3 2008
when Boyuan accelerated completion of projects previously delayed
because of licensing issues unrelated to the Company.
- Gross profit was $2.3 million, representing a margin of 14.6% on
- Operating income was $1.8 million compared to $5.4 million for Q3-
- After tax net income was $1.2 million, compared to $4.4 million for
- Completed the acquisition of all issued and outstanding common shares
of SND Energy Ltd. through a reverse-takeover (RTO) transaction.
- Concurrent with the RTO transaction, completed a private placement
financing, which generated gross proceeds of $4.1 million (CDN),
through the issuance of secured convertible debentures and 512,500
common shares to investors.
- As part of the private placement financing, the Company's Chairman,
Mr. Shou Cailiang, deposited 2.05 million common shares into escrow,
which will be transferred to investors in the event that Boyuan does
not achieve after-tax net income of least $8.5 million (U.S.) for
fiscal year 2009 and $11.5 million (U.S.) for fiscal year 2010.
- The Company's common shares began trading on the TSX Venture Exchange
under the symbol BOY and its debentures under the symbol BOY.DB.
Highlight Subsequent to Quarter End
- Appointed Paul Law, CA as Chief Financial Officer effective April 3,
"Our third-quarter performance was consistent with our expectations and
reflects our ongoing progress," said Mr. Shou Cailiang, Chairman of Boyuan
Construction Group, Inc. "Despite a general economic slowdown due to Chinese
New Year holidays in the period, we expanded our contract backlog and
completed several key projects on time and budget. Most importantly, our year
to date net income has grown by 30%, keeping us on track to exceed our $8.5
million target for the year."
Revenue for the third quarter of 2009 was $15.9 million compared to $28.8
million for Q3 of 2008. Higher revenue was generated in 2008 because Boyuan
accelerated the completion of projects previously delayed due to licensing
issues unrelated to the Company. Revenue for the first nine-months of 2009 was
$60.6 million, an increase of 57% when compared to $38.7 million for the same
period in 2008. The growth is mainly due to an increase in project volume as
well as an increase in the number of projects, particularly in the Sanya
market, where contract value per construction area is stronger.
Cost of contract revenue for the third quarter of 2009 was $13.6 million,
compared to $23.2 million for the third quarter of 2008. For the first nine
months of 2009, the cost of contract revenue was $52.1 million, up 60% from
$32.5 million for the same period in 2008. The year-to-date increase was
primarily due to expanded project contract volume.
Gross profit for the third quarter of 2009 was $2.3 million, down from
$5.6 million for the third quarter of 2008. Gross profit for the first
nine-months of 2009 increased 39% to $8.5 million from $6.1 million from the
same period last fiscal year.
General and administrative expenses for the third quarter of 2009
totalled $0.5 million up 134% from $0.2 million for the same period of 2008.
The increase was due primarily to fees relating to the Company's RTO
transaction and securing a listing status on the TSX Venture Exchange.
Operating income for the third quarter of 2009 was $1.8 million compared
to $5.4 million for the third quarter of 2008. For the first nine months of
the year, operating income was $7.8 million compared to $5.4 million for the
same period of 2008.
After tax net income for the third quarter of 2009 was $1.2 million
compared to $4.4 million for the third quarter of 2008. After tax net income
for the first nine months of 2009 was $5.6 million, up from $4.3 million for
the same period in 2008. As specified by the Company's make-good provision,
Boyuan must obtain after-tax net income of $8.5 million for the fiscal year
ending June 30, 2009. If the target is not met, Boyuan's Chairman will
transfer more than 1 million common shares currently held in escrow to
Cash and cash equivalents at March 31, 2009 were $1.7 million compared to
$6.4 million at year end June 30, 2008.
"We remain bullish on our long-term prospects," said Mr. Shou Cailiang.
"Demand for our construction services continues to grow in each of our core
markets, particularly as the rise of China's middle class and growing
urbanization are fueling the need for new, high-quality residential as well as
commercial projects for which we are developing a strong reputation."
Boyuan's consolidated statements for the quarter ended March 31, 2009 and
related management's discussion and analysis (MD&A) will be filed with
securities regulatory authorities and available via SEDAR at www.sedar.com.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the
business of residential and commercial building construction, municipal
infrastructure and engineering projects. In its last three fiscal years ending
June 30, 2008, Boyuan completed more than 120 projects for a number of private
and public sector clients including Cargill and the Dalian Shide Group, a
billion dollar conglomerate whose partners include DuPont, Mitsubishi and GE.
Boyuan's current backlog includes residential, industrial and mixed-use
developments, including a five-star hotel and a project at the Qingshan
Nuclear Plant, China's first and largest nuclear facility. From its operating
bases in Zhejiang Province and on Hainan Island, Boyuan focuses on
construction projects in China's fast-growing regions of the Yangtze River
Delta and the city of Sanya.
Caution concerning forward-looking statements
This press release contains forward-looking statements. Such statements
inherently involve numerous risks and uncertainties. Actual future results may
differ from the anticipated results expressed in the forward-looking
statements contained in this press release, including, but not limited to,
those statements contained under "Outlook" and regarding the ability to meet
the target for the make-good provision and Boyuan does not undertake to update
this information. Investors are cautioned against placing undue importance on
forward-looking information contained herein and should consult the Company's
reports and other public filings which contain a more exhaustive analysis of
risks and uncertainties connected to Boyuan's business.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Boyuan Construction Group, Inc., Mr. Paul Law,
Chief Financial Officer, + (852) 9329 5088, email@example.com; The
Equicom Group Inc., Joe Racanelli, (416) 815-0700 ext. 243,