TORONTO, May 29, 2019 (GLOBE NEWSWIRE) -- CF Energy Corp., (TSX-V: CFY) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), an energy provider in the People’s Republic of China (the ”PRC”), announces that the Company has filed its unaudited condensed interim consolidated financial results for the first quarter ended March 31, 2019 (“Q1 2019”). Revenue from continuing operations for Q1 2019 was RMB107.8 million (approx. CAD21.2 million), an increase of RMB3.7 million (approx. CAD0.5 million), or 4%, from RMB104.1 million (approx. CAD20.7 million) for the first quarter ended March 31, 2018 (“Q1 2018”). Gross profit was RMB38.7 million (approx. CAD 7.6 million), a decrease of RMB9.2 million (approx. CAD1.9 million), or 19%, as compared to RMB47.9 million (approx. CAD9.5 million) for Q1 2018. Gross profit margin was 36.0%, a decrease of 10.0% from 46.0% in Q1 2018. Profit for the period from continuing operations was RMB4.8 million (approx. CAD1.0 million), a decrease of RMB9.1 million (approx. CAD1.8 million), or 65%, as compared to RMB14.0 million (approx. CAD2.8 million) for Q1 2018. EBITDA from continuing operations for Q1 2019 was RMB17.9 million (approx. CAD3.5 million), a decrease of RMB10.4 million (approx. CAD2.1 million), or 37%, from RMB28.3 million (approx. CAD5.6 million) for Q1 2018.
The significant drop in profit for the period from continuing operations was mainly attributable to the drop in overall gross profit margin for Q1 2019 as compared with Q1 2018. The drop was primarily due to the decrease in gross profit margin of the gas supply companies of the Group, which contributed 89.6% (Q1 2018: 100%) of total gas sales and 57.4% (Q1 2018: 61.4%) of total revenue in Q1 2019, which is expected to be temporary.
The Company would like to emphasize that this temporary drop in gross profit margin of gas supply companies of the Group in Q1 2019 will not affect our Company's operations going forward and, therefore, will not be comparable with previous periods. It is a normal practice of our Company to spread the usage of our annual supply of cheaper piped gas from CNOOC over the first three quarters of the year and when the supply of piped gas is used up, LNG at a higher cost will be consumed as a substitute. In Q1 2019, due to the depletion of the old gas field (Yacheng 13-1 gas field), the overall supply of piped gas has been reduced, hence the amount of piped gas spread for the quarter has been reduced accordingly, resulting in more expensive LNG gas being used which significantly affected the gross profit and gross profit margin for the quarter. However, piped gas from the new gas field (Dongfang 13-2 gas field) of CNOOC, which is expected to be operational later in 2019, will be supplying piped gas to Hainan Province's enterprises through the original pipelines of the old gas field. The agreement of gas supply contract with CNOOC for the supply of piped gas to the Company is currently under negotiation. Once the contract is signed and the new gas field becomes operational, the Company's gross profit margin will expect to return to the normal level as before.
The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.SEDAR.com or from the Company's website at www.cfenergy.com.
About CF Energy Corp. (Formerly “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.
TELE-CONFERENCE
A tele-conference will be held following the release of this press release and the results of the Group, details of which will be provided by way of a separate press release in due course.
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
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” or “continue” or similar words or the negative thereof. No assurance can be given that the plans, intentions or expectations or assumptions upon which these Forward-Looking Statements are based will prove to be correct and such Forward-Looking Statements included in this news release should not be unduly relied upon.
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. Such Forward-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 differ materially from the anticipated results, performance or achievements or developments expressed or implied by such Forward-Looking Statements. These factors include, without limitation, no 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 those 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 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.
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