Boyuan Reports FY2014 Financial Results

-  Record Revenue and Earnings for Fiscal 2014 -

TORONTO, Sept. 29, 2014 /CNW/ - Boyuan Construction Group, Inc., (TSX: BOY, BOY.DB.A) a growing construction company in China of commercial, residential and municipal infrastructure projects, today reported its financial results for the three- and twelve-month periods ended June 30, 2014. All figures are in U.S. dollars unless otherwise stated.

Selected Fiscal Year Financial Highlights

In thousands except share and % data








Gross profit




Gross profit margin







Net income




Earnings per share - diluted




June 30, 2014

June 30, 2013

Total Assets




Cash, cash equivalents and restricted cash



"We are very pleased with our positive year-end results which are a result of our leading market position and our ability to select projects that deliver value to Boyuan. As the Chinese market continues to be affected by the financial controls imposed by the central government we will remain disciplined in terms of the projects we undertake. As a construction industry leader in our key markets, we are able to be selective in choosing the projects that will allow us to continue to grow," said Mr. Cailiang Shou, Chairman of Boyuan Construction Group.

FY2014 Operational and Financial Highlights

  • Revenue of $278.3 million, up 33.0% from $209.2 million for FY2013
  • FY2014 EBITDA of $32.9 million, up 32.3% from $24.9 million in FY2013
  • Net income of $14.8 million, or $0.52 per diluted share for FY2014, up from $7.9 million, or $0.31 per diluted share, for FY2013
  • $367 million worth of projects initiated during the fiscal year

Highlights Subsequent to Year End

  • Initiated construction of a residential development valued at $30.0 million in Lingshui Li Autonomous in the southeast of Hainan Island
  • Initiated construction of a residential development located in Haining City in Zhejiang province, valued at $29.9 million
  • Initiated construction for three projects in Hainan Island. Two are residential developments, one is valued at $11.4 million and located in Baoting Li and Miao Autonomous County, the other is a $21.1 million project located in Sanya. The third is a hotel development located in Sanya and valued at $9.8 million.

1 EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. EBITDA is not a defined performance measure under IFRS.

Review of Financial Results
Boyuan generated revenue of $278.3 million in the twelve-month period ended June 30, 2014, an increase of 33.0% from $209.2 million in the same period for FY2013. Boyuan recognizes revenue on the percentage-of-completion method. The increase in revenue for the fiscal year was mainly the result of new projects the Company has initiated. Following the repayment of its 11.75% secured debentures in May 2013; Boyuan has used its increased resources to become more proactive in securing new construction projects.

Cost of construction for FY2014 was $239.1 million, an increase of 33.9% from $178.6 million for FY2013. Higher expenses as a result of increased project volume during the period lead to an increase in costs for FY2014 compared with FY2013. Cost of construction includes all direct material, labour, 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 for FY2014 were $174.7 million and labour costs were $58.6 million, compared to direct material costs and labour costs of $136.4 million and $38.9 million for FY2013.

Gross profit for FY2014 was $39.3 million, which represented a margin of 14.1% on revenue, compared to gross profit for FY2013 of $30.6 million, which represented a margin of 14.6% on revenue. As a result of market conditions in China, Boyuan has experienced a slight downward pressure on margins. Developers are becoming more price sensitive with longer development cycles, which results in some erosion of the Company's historical margins. Gross profit for the fourth quarter FY2014 was $13.9 million, which represented a margin of 13.3% on revenue. For the same period in 2013, gross profit and gross margin were $8.7 million and 14.1% respectively.

G&A expenses were $6.2 million for FY2014 compared to $5.8 million for FY2013. The increase was mainly due to a provision for doubtful accounts of $0.96 million, offset somewhat by a decrease in expenses in relation to the OSC investigation which was concluded last year.

Interest expense for FY2014 was $7.5 million, a decrease of $0.9 million compared with the same period last year. The decrease in interest expense was primarily due to improved cash flows resulting in a decrease in interest paid on receivables discounting.

After-tax net income for FY2014 was 14.8 million, or $0.52 per fully diluted share, compared to net income of $7.9 million, or $0.31 per fully diluted share, in FY2013. For the fourth quarter 2014, net income was $5.4 million, or $0.18 per fully diluted share. This compares to net income of $2.3 million, or $0.09 per fully diluted share, in FY2013.

The Company had working capital of $101.4 million, including cash, cash equivalents, and restricted cash totaling $13.3 million as at June 30, 2014. This compares to $78.2 million and $13.3 million respectively at June 30, 2013. The increase in working capital is due to the increase in account receivable and unbilled revenue.


"Urbanization and the growth of the middle class continues in China and suggests the continued demand for Boyuan's construction services in the long-term," added Mr. Shou. "We remain confident in our strategy to focus on our three core markets: Yangtze River Delta, Shadong Province and Hainan Island. We also plan to expand our capabilities by upgrading our qualification levels and engineering standards in order to access additional opportunities in the market."   

Boyuan's consolidated statements for the three- and twelve-month periods ended June 30, 2014 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

Conference Call Notice
The Company will hold a conference call to discuss its fiscal 2014 financial results on Tuesday, September 30, 2014 at 9:30 a.m. ET. 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 line.

The conference call will be archived for replay until Tuesday, October 7, 2014 at midnight. To access the archived conference call, please dial 1-855-859-2056 or 416-849-0833 and enter the reservation number 4253699#.

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, 2014, Boyuan completed 45 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 visit

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, 2014 and in the Company's other public disclosure documents filed with certain Canadian securities regulatory authorities and available at  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.

SOURCE: Boyuan Construction Group, Inc.

For further information: Contacts: Boyuan Construction Group, Inc., Mr. Paul Law, CFO, +(852) 9329 5088,; TMX Equicom, Katelynn Thissen, (416) 815-0700 ext. 276,


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