TORONTO, Aug. 19, 2021 (GLOBE NEWSWIRE) -- CF Energy Corp. (TSX-V: CFY) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), a leading new energy service provider in the People’s Republic of China (the ”PRC”), announces the following business updates:
Pricing formula adjustment notification for gas distribution business in Sanya from the Sanya City Development and Reform Commission (“SYDRC”)
The SYDRC has finalized the latest Sanya City’s natural gas utility pricing formula adjustment which will be the guideline for the Group to follow on its gas selling prices starting from September 1, 2021 (the “New Gas Selling Price”). SYDRC is the government natural gas price regulating body in Sanya City, and this pricing formula adjustment is part of the pricing control strategy of China’s National Development and Reform Commission (“NDRC”) for the whole of China.
With effect from September 1, 2021, the New Gas Selling Price per m3 to commercial customers in Sanya City will be adjusted from RMB4.0 to RMB3.83 while the price to social welfare units such as schools, government facilities and other not-for-profit organizations, which are classified under commercial customers, would remain unchanged at RMB3.23, and the New Gas Selling Price to residential customers, which is based on 3 levels of consumption, with the 1st and 2nd level prices remain unchanged at RMB 2.94 and RMB3.53 respectively, while the 3rd level price will be adjusted from RMB3.96 to RMB3.82.
Going forward, as the pricing control policy of the NDRC is being further implemented by the SYDRC, the Group expects the New Gas Selling Price would significantly and adversely impact the profitability of its natural gas distribution business segment. However, the management of the Company will continue to maintain close communications with local government to obtain further financial and policy support and provide timely market feedback to the Company’s shareholders.
COVID-19 impact on our business in the Hainan Province
With the resurgence of the outbreak of COVID-19 confirmed cases in China around the end of July 2021, to combat this, the Central Government has re-instated certain travel restrictions previously adopted across China restricting residence in major cities with recent confirmed cases of COVID-19 to travel outside of these cities and likewise, for travelers to travel to the restricted cities, unless traveling is deemed absolutely essential. These restrictions were also applicable to the Hainan Province until they were uplifted today as there were a few recent confirmed COVID-19 infected cases in Hainan.
As a result of these restrictions, the demand for natural gas for the month of August 2021 (the traditionally high demand summer month) has so far experienced significant drop from the daily average consumption of 120,000 m3 to 80,000 m3. Assuming that the restrictions would continue through to the end of August 2021, our conservative estimate is an overall drop in revenue of approximately RMB3 million to RMB4 million for the August 2021 month.
The restrictions have also affected our other business segments, including the Haitang Bay Integrated Smart Energy Project and the electric vehicle (“EV”) battery swap station business. The planned commencement of operation for the Haitang Bay Integrated Smart Energy Project is expected to be delayed as some of the hotels which are planned to convert to our system are temporarily closed and the schedules for new hotel customers tapping into our system have been delayed. The significant drop in visitors to Sanya has also impacted our EV battery swap station business as demand for network taxis has also reduced.
The Company will continue to monitor closely the COVID-19 development and will provide further updates to the shareholders of updates as and when required.
About CF Energy Corp. (Previously known as: Changfeng Energy Inc.)
CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange (“TSX-V”) under the stock symbol “CFY”. It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC. In 2009, CF Energy was recognized as being one of China’s the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSXV for the 2018 year.
CONTACT INFORMATION
Corporate Investment Relations
Investor.relations@changfengenergy.cn
Charles Wang
Executive Assistant to CEO & Chair of the Board
zhaoyu.wang@changfengenergy.cn
Frederick Wong
Director of the Board
fred.wong@changfengenergy.cn
Mike Liu
VP Capital Market
mike.liu@changfengenergy.cn
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”). All statements, other than statements of historical fact, included or incorporated by reference in this document are forward-looking statements —including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future. These forward-looking statements can be identified by the use of forward-looking words such as “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, other similar words and/or the negatives thereof. No assurance is given that the plans, intentions or expectations or assumptions upon which these forward-looking statements are based will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon. Though management believes that the expectations outlined in such forward-looking statements are reasonable, there can be no assurance that such expectations will materialize. Such-looking statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, performance or achievements to deviate materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. These factors include, without limitation, significant and continuing adverse changes in general economic conditions or conditions in the financial markets. Readers are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’s filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider these factors. The forward-looking statements included in this news release 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. This news release neither constitutes an offer to sell nor a solicitation of offers to buy any of the securities described herein. Accordingly, undue reliance should not be placed on its contents.
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