TORONTO, May 15, 2013 /CNW/ - Boyuan Construction Group, Inc., (TSX: BOY, BOY.DB, BOY.DB.A) a growing construction company in China of commercial, residential and
municipal infrastructure projects, reported today its financial results
for the three- and nine-month periods ended March 31, 2013. All
figures are in U.S. dollars unless otherwise stated.
Selected Fiscal Year Financial Highlights
In thousands except share and % data
Gross profit margins
Earnings per share - diluted
Mar. 31, 2013
June 30, 2012
Cash, cash equivalents and restricted cash
"Despite the challenges we are facing with respect to restrictive
measures imposed by the central government on the residential market
and the tightening of financing facilities to property developers, we
were able to grow our revenue to the largest third quarter amount our
history," said Mr. Cai Liang Shou, Chairman of Boyuan Construction
Group. "The third quarter results reflect our ability to grow while
also being very selective in choosing which new construction projects
we accept given the challenging conditions currently in China. We will
continue to be conservative with our cash flow management in the short
term until conditions improve in an effort to maintain our financial
Q3 FY2013 Operational and Financial Highlights
Largest third quarter revenue in Company history
Revenue of $41.4 million, up 7% from Q3 FY2012 of $38.7 million
Q3 EBITDA of $4.1 million, down 12% from $4.6 million in Q3 FY2012
Q3 net earnings of $1.4 million, down from $2.2 million in Q3 FY2012
Initiated a luxury hotel construction project located in Hainan Lingshui
County, valued at $10.9 million
Total cash balance of $13.8 million at quarter-end
Highlights Subsequent to Quarter-End
Announced a refinancing loan agreement and the May 15, 2013 maturing of
its 11.75% secured convertible debentures with the original maturity
date of February 27, 2013
Review of Financial Results
Revenue for the three-month period ended March 31, 2013 was $41.4
million, up 6.8% from the corresponding period in FY2012. Revenue for
the first nine months of FY2013 was $147.7 million, up 0.9% from $146.4
million for the same period of FY2012. Boyuan recognizes revenue on
the percentage-of-completion method.
The measures introduced by the Chinese central government last year in
an effort to cool down the real estate market continue to effect
business activities. The Company has continued to be more selective in
taking up new construction projects under the current uncertain
Cost of construction for Q3 FY2013 was $35.4 million, up 9.3% from $32.4
million for Q3 FY2012. Cost of construction for the first nine months
of FY2013 was $125.9 million, up 2.0% from $123.4 million for the
corresponding period of FY2012.
Cost of construction includes all direct material, labor, subcontract
and other related costs, such as equipment repairs. The two major
components of the cost of construction are direct material and labour
costs. Direct material costs were $26.5 million and labour costs were
$8.8 million in this quarter. In comparison, direct material costs and
labour costs were $23.5 million and $8.1 million in the same quarter
Gross profit for Q3 FY2013 was $6.0 million, which represented a margin
of 14.6% on revenue. Gross profit for the corresponding period of last
year was $6.3 million, which represented a margin of 16.3% on revenue.
The year-over-year decline was attributable to a slight downward
pressure on margins relating to the current real estate market
situation in China. Developers have become more price sensitive and
have longer development cycles, thus eroding some of Boyuan's normal
margins. Historically, Boyuan's gross profit margins have been in the
range of 15% to 17%. On a nine month basis, gross profit for FY2013
was $21.9 million, which represented a margin of 14.8% on revenue. In
the same period of FY2012, gross profit and gross margins were $23.0
million and 15.7%, respectively.
G&A expenses were $1.1 million in Q3 FY2013 compared to $1.2 million in
Q3 FY2012. G&A expenses for the nine-month period ended March 31, 2013
were $3.6 million representing an increase of $0.3 million in the same
period last year. The increase in G&A expenses in this quarter came
from the increase in office administrative costs such as legal fees and
Interest expense for Q3 FY2013 was $1.9 million, an increase of $0.3
million over the same period last year. On a year-to-date basis,
interest expense for FY2013 was $6.9 million, up from $4.6 million for
FY2012. The increase was due to an increase in borrowing as a result of
longer payment cycles from our customers.
After-tax net income for Q3 FY2013 was $1.4 million, or $0.05 per fully
diluted share, compared to net income of $2.2 million, or $0.08 per
fully diluted share, for Q3 FY2012. The decrease in net income was a
result of smaller gross profit margin for the period and the increases
in G&A expenses and interest expenses. On a nine-month basis, net
income for FY2013 was $5.6 million or $0.22 per share fully diluted.
This compares to a net income of $8.1 million, or $0.31 per share fully
diluted, for the same period of FY2012.
The Company had working capital of $62.0 million, including cash and
cash equivalents of $4.8 million for the period ended March 31, 2013.
This compares to $54.1 million and $3.1 million, respectively, at June
30, 2012. The increase in working capital is due to the contribution
of net earnings and improved working capital management.
Boyuan's consolidated statements for the three-and six- month periods
ended March 31, 2013 and related management's discussion and analysis
(MD&A) will be filed with securities regulatory authorities within
applicable timelines and will be available via SEDAR at www.sedar.com.
Conference Call Notice
The Company will hold a conference call to discuss its fiscal Q3 FY2013
financial results on May 16, 2013 at 9:30 a.m. Eastern. Mr. Paul Law,
Boyuan's Chief Financial Officer, will host the call.
All interested parties can join the call by dialing 647-427-7450 or
1-888-231-8191. Please dial in 15 minutes prior to the call to secure a
The conference call will be archived for replay until May 23, 2013 at
midnight. To access the archived conference call, please dial
1-855-859-2056 or 416-849-0833 and enter the reservation number
A live audio webcast of the conference call will be available from the
investor relations section of the Company's website, www.boyuangroup.com, or from www.newswire.ca. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. The webcast will be archived at the above web site
for 30 days.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the
business of commercial building and residential construction, municipal
infrastructure and engineering projects. In its last three fiscal
years ending June 30, 2012, Boyuan completed 52 projects for a number
of private and public sector clients. Boyuan's current project backlog
includes residential, commercial, industrial and mixed-use
developments. From its operating bases in Zhejiang Province and in
Hainan Province, Boyuan focuses on construction projects in China's
fast-growing regions of the Yangtze River Delta, Hainan Province and
Shandong Province. For more information please visit www.boyuangroup.com.
Caution Regarding Forward-Looking Information:
Certain information contained in this press release constitutes
forward-looking information, which is information relating to future
events or the Company's future performance and which is inherently
uncertain. Forward-looking information involves known and unknown
risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information. The Company believes the expectations
reflected in the forward-looking information are reasonable but no
assurance can be given that these expectations will prove to be correct
and readers are cautioned not to place undue reliance on
forward-looking information contained in this press release. Some of
the risks and other factors which could cause results to differ
materially from those expressed in the forward-looking information
contained in this press release have been identified in the Company's
AIF for the fiscal year ended June 30, 2011 and in the Company's other
public disclosure documents filed with certain Canadian securities
regulatory authorities and available at www.sedar.com. The forward-looking information contained in this press release is
made as of the date hereof and the Company undertakes no obligation to
update publicly or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
otherwise required by law.
1 EBITDA is defined as earnings before interest, income taxes,
depreciation and amortization. EBITDA is not a defined performance
measure under IFRS.
SOURCE: Boyuan Construction Group, Inc.
For further information:
Boyuan Construction Group, Inc.
Mr. Paul Law, CFO
+(852) 9329 5088
(416) 815 0700 ext. 253