Boyuan Files Q1'16 Financial Statements and Provides Disclosure Update

TORONTO, Dec. 23, 2015 /CNW/ - Boyuan Construction Group, Inc. (TSX: BOY, BOY.DB.A) ("Boyuan" or the "Company"), a growing construction company in China of commercial, residential and municipal infrastructure projects, has filed its financial statements and MD&A for the quarter ended September 30, 2015 which can be found on SEDAR ( under the Company's profile.

Selected Quarterly Financial Highlights

In thousands except share and % data








Gross profit




Gross profit margin







Net income




Earnings per share - diluted




September 30, 2015

June 30, 2015

Total Assets




Cash, cash equivalents and restricted cash





Q1'16 Operational and Financial Highlights

  • Revenue of $60.9 million, down 7.4% from $65.8 million for Q1'15
  • EBITDA of $6.5 million, down 8.9% from $2.8 million in Q1'15
  • Net income of $2.2 million, or $0.08 per diluted share, down from $2.8 million, or $0.10 per diluted share, for Q1'15

Review of Financial Results

Revenue for the three months period ended September 30, 2015 was $60.9 million, down 7.4% from $65.8 million for the same period in 2014. Revenue is recognized on the percentage-of-completion method. Despite there were signs that the real estate market had stabilized somewhat in 2014, there are recent indications that the real estate market has slowed down once again. In response, the Company has been more selective in taking on new construction projects since the early part of the current calendar year. New projects taken up in FY2015 and FY2014 amounted to $204 million and $367 million respectively. Most of the Company's projects have duration between one to three years.

Cost of construction for Q1'16 was $55.3 million, down 6.0% from $58.8 million for Q1'15. The decrease was primarily a result of lower expenses associated with lower project volume. 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 were $38.1 million and labour cost was $15.1 million in Q1'16. In comparison, direct material costs and labour costs were $42.9 million and $14.5 million in Q1'15.

Gross profit for Q1'16 was $5.6 million, representing a margin of 9.1% on revenue. Gross profit for Q1'15 was $7.0 million, representing a margin of 10.7% on revenue. Gross profit margins remained under pressure due to the current real estate market environment in China. Developers have become more price sensitive and have longer development cycles which has eroded some of our normal margins.

G&A expenses were $1.3 million in Q1'15 compared to $1.5 million in Q1'15. G&A expenses have remained in-line with our expectations on a year-over-year basis.

Interest and other income was $1.3 million in Q1'16, compared to $0.9 million in Q1'15. Accretion income from the discount on non-current accounts receivable and unbilled revenue of $1.2 million and $0.9 million was recorded to interest and other income for the quarters ended September 30, 2015 and 2014 respectively.

Interest expense was $1.8 million in Q1'16, similar  to $1.9 million in the same period last year.

After-tax net income for Q1'16 was $2.2 million or $0.08 per fully diluted share while it was $2.8 million or $0.10 for Q1'15.  The decrease was principally due to the decrease in revenue as a result of a decreased volume of new projects taken up in the past year.

Disclosure Update

As previously announced, the Ontario Securities Commission ("OSC") issued a management cease trade order ("MCTO") on October 14, 2015 with respect to the Company. The MCTO was issued as a result of Boyuan's delay in filing its audited annual financial statements for the fiscal year ended June 30, 2015 and related Management's Discussion & Analysis, Annual Information Form and CEO and CFO certification of filings (collectively, the "2015 Filings"), by the required date, and also applies to the interim filings for the quarter ended September 30, 2015.  The MCTO restricts all trading in and all acquisitions of the securities of the Company, whether direct or indirect, by the Chief Executive Officer and the Chief Financial Officer of the Company until two full business days following the receipt by the OSC of all Annual Filings.  The MCTO does not affect the ability of persons who are not insiders of Boyuan to trade its securities.

Further to its press releases issued on December 23, December 11, November 27 and 16, 2015, the Company has filed all annual and interim financial statements and MD&As, related certifications and the annual information form required by the securities regulations.

Boyuan intends to satisfy the provisions of the Alternative Information Guidelines as set out in National Policy 12 - 203 for as long as Boyuan remains in default, including the issuance of further by-weekly default status reports, each of which will be issued in the form of a press release. A general cease trade order may be issued if Boyuan fails to file such default status reports on a timely basis.

A copy of the MCTO can be found at the Company's website at

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, 2015, 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.  All information other than statements of historical fact may be forward-looking information.  Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking information contained in this press release includes, but is not limited to, management's expectation to comply with the Alternative Information Guidelines. 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 include, but are not limited to: risk of a general cease trade order bing issued, risk of risk of macro-economy cycle, risk from competition, risk from insufficient marketing to secure new projects, risk in obtaining additional financing, risk involving permits and licences, reliance on key management member, risk from supply of raw materials, risk of financial leverage, risk of bad debts in accounts receivables, risk involved in real estate development, foreign exchange fluctuations, political and economic conditions in China and other risks included in the Company's AIF for the fiscal year ended June 30, 2015 and in the Company's public disclosure documents filed with certain Canadian securities regulatory authorities and available at The forward-looking information contained in this press release are 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: Contacts: Boyuan Construction Group, Inc., Mr. Paul Law, CFO, +(852) 9329 5088,; National Equicom, Ms. Renée Lam, (416) 848-1405,

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890