SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

News Feed Item

Changfeng Revenue Up 39%, Gross Profit Up 40% and Net Income Up 52% for the Three Months Ended March 31, 2014 With Compared to the Same Period of 2013

TORONTO, ONTARIO -- (Marketwired) -- 05/15/14 -- Changfeng Energy Inc. (TSX VENTURE: CFY) ("Changfeng" or the "Company") is pleased to announce that the Company has filed its unaudited condensed interim consolidated financial results for the first quarter ended March 31, 2013. The unaudited condensed interim consolidated financial results and Management Discussion and Analysis can be downloaded from www.SEDAR.com or from the Company's website at www.changfengenergy.com.

Summary of the First Quarter of 2014 Consolidated Financial Results


---------------------------------------------------------------------------
In thousands of Canadian dollars      Three months ended March 31,
except percentages and per share             2014     2013   Change       %
amounts
------------------------------------- -------------------------------------
Revenue                                    13,381    9,623    3,758     39%
------------------------------------- -------------------------------------
Gross margin                                7,790    5,572    2,218     40%
------------------------------------- -------------------------------------
Net income                                  1,930    1,273      657     52%
------------------------------------- -------------------------------------
EBITDA (1)                                  5,019    3,001    2,018     67%
------------------------------------- -------------------------------------
Note:
(1) See Non- IFRS Financial Measures in this Press Release.

Sales from the gas distribution utility for the three months ended March 31, 2014 were $11.4 million, an increase of $3.4 million, or 43%, from $8.0 million for same period of 2013. This increase was attributable to the 11.5% appreciation of exchange rate between the Chinese RMB and the Canadian dollar, an increase in connection fees in the Sanya operation, increased gas volume sold of 11.0 million m3 in the Sanya operation in the first three months of 2014 compared to 10.9 million m3 sold in Sanya operation in the same period of 2013; and increased gas volume sold of 0.3 million m3 in the Xiangdong operation in the first three months of 2014 compared to 0.0 million m3 sold in the same period of 2013.

Total revenue from the CNG refueling retail station for the three months ended March 31, 2014 was $2.0 million, an increase of $0.3 million, or 18%, from $1.7 million for same period of 2013. The increase was attributable to the combined effect of the increased gas volume sold and the appreciation of exchange rate between the Chinese RMB and the Canadian dollar. (3.0 million m3 in the three months ended March 31, 2014 compared to 2.8 million m3 sold in the same period of 2013). The Company has been upgrading its station's refueling capacity to meet the increasing demand that is primarily driven by both rising gasoline prices and continued government support for clean energy vehicles. It is expected that more existing gasoline-fueled buses in the city will be converted into dual-fuel vehicles (gasoline/CNG).

Gross margin for the first quarter of 2014 increased $2.2 million, or 40%, to $7.8 million from $5.6 for the comparable period in 2013. The gross margin percentage of 58% for the first quarter of 2014 is approximately the same as for the first quarter of 2013.

General and administrative expenses for the first quarter of 2014 were $2.7 million, an increase of $0.6 million, or 27%, from $2.2 million in the same period of 2013. The increase was attributable to higher employee salaries and benefits as a result of a higher inflation rate in China, additional employees, higher conference and professional fees and higher exchange rate between the Chinese RMB and the Canadian dollar. General and administrative expenses as a percentage of sales for the first quarter of 2014 decreased to 20% from 22% in the first quarter of 2013.

Travel and business development expenses for the first quarter of 2014 were $1.1 million, an increase of $0.1 million, or 12%, from $1.0 million in the first quarter of 2013. Travel and business development expenses as a percentage of sales for the first quarter of 2014 decreased to 8% from 10% in the first quarter of 2013. These expenses normally fluctuate with travel and business development activities in mainland China as the Company seeks to develop new projects in close proximity to the new national pipelines.

Net income for the first quarter of 2014 was $1.9 million, or $0.030 per share (basic and diluted) compared to $1.3 million or $0.020 per share (basic and diluted) for the same period in 2013, primarily due to the reasons discussed above.

EBITDA (non-IFRS measure as identified and defined under section "Non-IFRS Measures") for the first quarter of 2014 was $5.0 million, an increase of $2.0 million, or 67%, from $3.0 million for the same period of 2013. The increase was driven primarily by higher sales. EBITDA as a percentage of revenue for the first quarter of 2014 was 38%, compared to 31% in the first quarter of 2013, representing an increase of 7% due to the sales increases but was partially offset by higher operating expenses, as discussed above.

Financial Position

Cash increased by $0.05 million to $15.20 million at March 31, 2014 from $15.15 million at December 31, 2013, primarily resulting from cash provided during the quarter by operating activities of $2.1 million and effects of foreign exchange on cash balances of $0.2 million, offset by $0.1 million repayment of long-term debt, $0.3 million for share buyback and cash used for capital expenditures of $1.9 million during the quarter.

Net cash provided by operations was $2.1 million for the first quarter of 2014 compared to $1.7 million for the same period of 2013.

Cash used in financing activities in the first quarter of 2014 included a $0.1 million principle payment of long-term debt and $0.3 million paid for the share buyback.

Capital expenditures in property and equipment totaled $1.9 million in the first quarter of 2014 compared to $2.2 million in the same period of 2013. The expenditures were mainly related to the purchase of equipment for the Xiangdong project and the on-going construction of pipeline networks to connect new customers in the Sanya Region.

Changfeng will finance the majority of the upcoming construction of projects under development in mainland China through its long-term bank loans with BOC Sanya and BOC Pingxiang, as well as operating cash flow from its existing operations.

Non-IFRS Financial Measures

The Company uses the following non-IFRS financial measure: EBITDA. The Company believes this non-IFRS financial measure provides useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.

Management uses this non-IFRS financial measure to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated operating performance, as the excluded items are not necessarily reflective of the Company's underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

This measure do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. This measure is listed and defined below:

EBITDA

EBITDA is defined herein as income before income tax expense, interest expense, depreciation and amortization, share of loss of investment in associate, as well as non-cash stock-based compensation expense. EBITDA does not have any standardized meaning prescribed by IFRS and therefore may not conform to the definition used by other companies. A reconciliation of net income to EBITDA for each of the periods presented as follows:


---------------------------------------------------------------------------
In thousands                         Three months ended March 31,
(except for % figures)                   2014      2013    Change         %
---------------------------------------------------------------------------
Net Income                              1,930     1,273       657       52%
Add (less):
 Income tax                             1,469       744       725       97%
 Interest income                          (9)       (9)         0        0%
 Share of loss of investment in
  associate                               7.6       0.3         7     2333%
 Stock-based compensation                  87         -        87      100%
 Amortization                           1,044       551       493       89%
 Interest expense                         490       442        48       11%
---------------------------------------------------------------------------
EBITDA                                  5,019     3,001     2,018       67%
---------------------------------------------------------------------------

About Changfeng Energy Inc.

Changfeng Energy Inc. is a natural gas service provider with operations located throughout the People's Republic of China. The Company services industrial, commercial and residential customers, providing them with natural gas for heating purposes and fuel for transportation. The Company has developed a significant natural gas pipeline network as well as urban gas delivery networks, stations, substations and gas pressure regulating stations in Sanya City & Haitang Bay. Through its network of pipelines, the Company provides safe and reliable delivery of natural gas to both homes and businesses. The Company is headquartered in Toronto, Ontario and its shares trade on the Toronto Venture Exchange under the trading symbol "CFY". For more information, please visit the Company website at www.changfengenergy.com.

Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. Although Management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to th...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, focused on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud platfo...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...