TORONTO, Nov. 14, 2013 /CNW/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia Bio-Chem" or the "Company") announces its financial results for the three-month period ending September 30, 2013.
- During the third quarter, lower starch prices caused a negative gross margin of 13.7% compared with a negative gross margin of 8.1% during the same period in 2012.
- The Company continues to manage its capacity utilization in reaction to market conditions. During the third quarter the Company's Changtu and Daqing plants operated at approximately 35% capacity while the newly acquired Tieling facility remained closed pending a decision regarding its relocation.
- As a result of depreciation and interest expenses from the addition of Tieling, net loss for the third quarter was $13.8 million (-$0.16 per share) compared with a net loss of $11.1 million (-$0.13 per share) during the third quarter of 2012.
- The company achieved a 34.1% improvement in EBITDA during the third quarter to negative $5.2 million compared with negative $7.9 million during the third quarter of 2012.
- The Company continues to enjoy the strong support of its banking group and successfully renewed or repaid $141.0 million in loans since December 31, 2012. Further, these loan renewals were achieved on more favorable terms as the Company was able to reduce the level of restricted cash by $28.6 million (including $22.1 million restricted cash from Tieling) during the first nine months of the year.
- The Company maintains unrestricted cash balance of $4.0 million at September 30, 2013.
"The corn processing industry in China continues to face challenges of a slow economy and overcapacity," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem. "We continue to manage our production output depending on market conditions."
During the third quarter, total production was 74,296 tonnes which represents 35% capacity utilization for both the Daqing and Changtu plants. This level of production represents a 30.5% increase from the same quarter in 2012.
During the third quarter, corn cost declined by 3.3% from the third quarter of 2012 while starch and germ prices have declined by 10.6% and 14.1% respectively for the same third quarter comparative periods. There was improvement in germ and fibre prices during the third quarter as the prices for these byproducts increase by 14.8% and 5.4% respectively compared with the corresponding period in 2012. As a result, gross margin during the third quarter was negative 13.7% compared with negative 8.1% during the same quarter of 2012.
Negative margins were somewhat offset by lower transportation expenses and a reduced allowance for doubtful accounts.
With the acquisition of Tieling earlier this year, the Company has experienced a significant increase in amortization charges which totaled $3.5 million during the quarter compared with $1.8 million during the third quarter of 2012. Consequently, earnings before interest, taxes, depreciation and amortization ("EBITDA") improved to negative $5.2 million compared with negative $7.9 million during the corresponding period in 2012.
SUMMARY FINANCIAL STATEMENTS
| in thousands of Canadian dollars except per
share and percentage data
| Three Months Ended
|Gross profit (loss)||(5,594)||(2,270)||-146.4%|
|Gross margin (% of Sales)||-13.7%||-8.1%|
|loss from operations||(8,993)||(9,826)||8.5%|
|Income recoveries (taxes)||(813)||118|
|EBITDA before stock-based compensation||(5,210)||(7,855)||33.7%|
|Loss per share:|
|Weighted average number of shares:|
|Balance Sheet Highlights||As at 9/30/13||As at 12/31/12|
During the third quarter of 2013, net loss was $13.5 million (-$0.16 per share) compared with a loss of $11.1 million (-$0.13 per share) during the same period of 2012.
As at September 30, 2013, the Company's unrestricted cash position declined to $4.0 million from $5.0 million at December 31, 2012. With the acquisition of Tieling, the Company's total loans increased to $189.6 million at September 30, 2013 from $123.2 million at December 31, 2012.
Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 9:00 a.m. EST on Friday, November 15, 2012. The details are as follows:
| Dial in number:
|| 1-888-231-8191 or 647-427-7450
| Conference ID and
Replay pass code:
|Taped Replay:|| 1-855-859-2056 or 416-849-0833
(Available until November 22, 2013)
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 into cornstarch, germ and gluten for sale to the domestic Chinese market. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 1.5 million tonnes of corn per year.
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:
Executive Vice President
Asia Bio-Chem Group Corp.
Email: [email protected]