Antelope Enterprise Announces First Half 2021 Financial Results
Antelope Enterprise Holdings Limited (NASDAQ: AEHL) reported a revenue of RMB 50.1 million (US$ 7.7 million) for the six months ended June 30, 2021, marking a 25.9% increase from RMB 39.8 million (US$ 5.6 million) in the same period of 2020. However, the company faced a gross loss of RMB 6.5 million (US$ 1.0 million) compared to a gross profit of RMB 0.9 million (US$ 0.1 million) in 2020, mainly due to strategic inventory sales at reduced prices. Net loss decreased to RMB 70.8 million (US$ 10.9 million), down from RMB 111.5 million (US$ 15.8 million) in 2020, aided by a reduction in bad debt expense.
- Revenue rose by 25.9% year-over-year due to increased sales volume and contributions from new subsidiaries.
- Net loss decreased from RMB 111.5 million to RMB 70.8 million, indicating improved financial health.
- 11% increase in sales volume of ceramic tiles compared to the same period in 2020.
- Gross loss of RMB 6.5 million reflects challenges in maintaining profitability.
- 8.6% decrease in average selling price of ceramic tiles indicates pricing pressure.
- Operating results affected by bad debt expense of RMB 49.8 million.
JINJIANG, China, Sept. 30, 2021 /PRNewswire/ -- Antelope Enterprise Holdings Limited (NASDAQ Capital Market: AEHL) ("Antelope Enterprise" or the "Company"), a leading Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings, today announced its financial results for the six months ended June 30, 2021.
First Half 2021 Summary
- Revenue was RMB 50.1 million (US
$ 7.7 million ) as compared to RMB 39.8 million (US$ 5.6 million ) for the same period of 2020. - Gross loss was RMB 6.5 million (US
$ 1.0 million ) as compared to gross profit of RMB 0.9 million (US$ 0.1 million ) for the same period of 2020. - Operating results were affected by bad debt expense of RMB 49.8 million (US
$ 7.7 million ) for the six months ended June 30, 2021, as compared to bad debt expense of RMB 101.8 million (US$ 14.4 million ) for the same period of 2020. - Net loss was RMB 70.8 million (US
$ 10.9 million ) for the six months ended June 30, 2021, as compared to a net loss of RMB 111.5 million (US$ 15.8 million ) for the same period of 2020. - Loss per share both on a basic and fully diluted basis was RMB 16.24 (US
$ 2.51) for the six months ended June 30, 2021, as compared to a loss per share on a basic and fully diluted basis of RMB 40.82 (US$ 5.77) for the six months ended June 30, 2020, with the latter figures retroactively presented for the 3:1 reverse stock split effective September 3, 2020.
Ms. Meishuang Huang, Chief Executive Officer of Antelope Enterprise, commented, "For the first half of 2021, we experienced challenging market conditions due to the slowdown of the real estate sector in China which was still being impacted by the continued effects of the COVID-19 pandemic. Our sustained marketing efforts during this period enabled us to realize an
"For the first half of 2021, we utilized production facilities capable of producing 1.1 million square meters of ceramic tiles per year out of effective annual production capacity of 51.6 million square meters of ceramic tiles. We took production offline at our Hengdali facility for the first half of 2021, exempting what we lease to a third party, since we determined that we had ample inventory available to work through our sales channels."
"While we are committed to our core business, we are also focused upon diversifying our business lines to fuel our growth. We are encouraged that Antelope Chengdu, one of our new subsidiaries in the financial technology sector, contributed a significant level of revenues to our financial performance for the first half of 2021."
"We believe that our building materials sector will continue to benefit from the importance of the real estate sector to the Chinese economy. We believe that the Chinese government's renewed efforts to promote affordable housing, projected growth in lower Tier cities and the upgrading of existing housing stock are potential catalysts that could benefit our business," concluded Ms. Huang.
Fiscal Six Months Results Ended June 30, 2021
Revenue for the six months ended June 30, 2021 was RMB 50.1 million (US
Gross loss for the six months ended June 30, 2021 was RMB 6.5 million (US
Other income for the six months ended June 30, 2021 was RMB 7.2 million (
Selling and distribution expenses for the six months ended June 30, 2021 were RMB 3.2 million (US
Administrative expenses for the six months ended June 30, 2021 were RMB 17.2 million (US
Bad debt expense for the six months ended June 30, 2021 was RMB 49.8 million (US
Other expenses for the six months ended June 30, 2021 were RMB 77,000 (US
Net loss for the six months ended June 30, 2021 was RMB 70.8 million (US
Loss per basic share and fully diluted share for the six months ended June 30, 2021 were RMB 16.24 (US
Statements of Selected Financial Position Items for the Six Months Ended June 30, 2021
- Cash and bank balances were RMB 34.0 million (US
$ 5.3 million ) as of June 30, 2021, compared with RMB 12.3 million (US$ 1.9 million ) as of December 31, 2020. - Inventory turnover was 128 days as of June 30, 2021, as compared to 190 days as of December 31, 2020. The decrease in inventory turnover days was primarily due to the cessation of production at our Hengdali facility during the six months ended June 30, 2021 due to our plan to primarily utilize current inventory in stock. We believe that the value of our current inventories is realizable.
- Trade receivables turnover, net of value added tax, was 253 days as of June 30, 2021, as compared with 242 days as of December 31, 2020. The increase in trade receivables turnover was primarily due to the slow collection of our trade receivables as a result of tight cash flow as reported by our customers due to the COVID-19 pandemic.
- Trade payables turnover, net of value added tax, was 17 days as of June 30, 2021 as compared with 22 days as of December 31, 2020. The average turnover days was within the normal credit period of one to four months granted by our suppliers.
Liquidity and Capital Resources
Cash flow used in operating activities was RMB 3.7 million (US
Cash flow used in investing activities was RMB 129,000 (US
Cash flow generated from financing activities was RMB 25.4 million (US
Plant Capacity and Capital Expenditures Update
We utilized plant capacity capable of producing 1.1 million square meters of ceramic tiles for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, when we utilized production facilities capable of producing 2.6 million square meters. As of June 30, 2021, we had twelve production lines available for production, only one of which was in use as of June 30, 2021. Our reduced production utilization during the current period was primarily attributable to the continued slowdown of the real estate industry in China which was still being impacted by the effects of the Covid-19 pandemic.
Our Hengda facility has an annual production capacity of 22.8 million square meters of ceramic tiles. The Company utilized production capacity at our Hengda facility capable of producing 1.1 million square meters of ceramic tiles for the six months ended June 30, 2021.
Our Hengdali facility has an annual production capacity of 28.8 million square meters (which excludes our leasing out 10 million square meters of production capacity to a third party). We utilized no production capacity at our Hengdali facility for the six months ended June 30, 2021 due to our having utilized current inventory in stock.
Our total annual production capacity is 51.6 million square meters of ceramic tiles and we intend to bring our unused production capacity online as customer demand dictates and when there are signs of improvement in China's real estate and construction sectors.
We review the level of capital expenditures throughout the year and make adjustments subject to market conditions. Although business conditions are subject to change, we anticipate a modest level of capital expenditures for the remainder of 2021 other than those associated with minimal upgrades, small repairs and the maintenance of equipment.
Business Outlook
For the first half of 2021, the Company's operating results were impacted by the continued slowdown of China's real estate sector which was still being impacted by the continued effects of the COVID-19 pandemic. Although we realized a
Looking forward, China's real estate sector continues to be a vital component of China's economic growth as the sector and its impact on other business activities is estimated to comprise
In addition, as it has in the past, the central government could impose lending curbs such as constraints on mortgage lending and restrictions on the number of homes that families can buy. Further, certain municipalities have halted land auctions in order to cool what have been excessive price bidding at land auctions. We anticipate that these trends could potentially limit new project development which could make the business conditions for the construction and building materials sectors challenging.
We believe that the real estate and construction sectors will continue to grow in the long-term which is of key importance to the building materials sector, and that urbanization continues to be a key driver for construction activity. In addition, the Chinese government has announced that it intends to promote the construction of one million affordable housing units in 2021. This, along with the upgrading of neglected housing stock and the renovation of existing homes, could lead to a higher demand for building materials.
We believe that the demand for our products will mostly come from Tier 3 and lower-tier cities as well as coastal cities over the next few years. However, we will also market our products to Tier 1 and Tier 2 cities as opportunities arise, and we will be increasing our efforts to secure customers in the larger Southeast Asia market. We remain focused on diversifying our operations to fuel our growth as a new subsidiary in the financial technology sector contributed a significant level of revenue to our financial performance in the first half of 2021.
This business outlook reflects the Company's current and preliminary views and is based on the information currently available to us, which are subject to change, and is subject to risks and uncertainties, as well as risks and uncertainties identified in the Company's public filings.
Conference Call Information
We will host a conference call at 8:00 am ET on September 30, 2021. Listeners may access the call by dialing +1 (877) 275-8968 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (918) 398-8123. The conference participant pass code is 7174574. A replay of the conference call will be available for 14 days starting from 11:00 am ET on September 29, 2021. To access the replay, dial +1 (855) 859-2056. International callers should dial +1 (404) 537-3406. The pass code is 7174574 for the replay.
About Antelope Enterprise Holdings Limited
Antelope Enterprise Holdings Limited is a leading manufacturer of ceramic tiles in China. The Company's ceramic tiles are used for exterior siding, interior flooring, and design in residential and commercial buildings. Antelope Enterprise's products, sold under the "Hengda" or "HD", "Hengdali" or "HDL", the "TOERTO" and "WULIQIAO" brands, and the "Pottery Capital of Tang Dynasty" brands, are available in over 2,000 style, color and size combinations and are distributed through a network of exclusive distributors as well as directly to large property developers. For more information, please visit http://www.aehltd.com.
Currency Convenience Translation
The Company's financial information is stated in Renminbi ("RMB"). Translations of amounts from RMB into United States dollars ("US$") in this earnings release are solely for the convenience of the readers and were calculated at the rate of US
Safe Harbor Statement
Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this press release include, without limitation, the continued stable macroeconomic environment in the PRC, the PRC real estate and construction sectors continuing to exhibit sound long-term fundamentals, our ability to bring additional capacity online going forward as our business improves, our customers continuing to adjust to our product price increases, our ability to sustain our average selling price increases and to continue to build volume in the quarters ahead, and whether our enhanced marketing efforts will help to produce wider customer acceptance of the new price points. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended December 31, 2020 and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.
FINANCIAL TABLES
ANTELOPE ENTERPRISE HOLDINGS., LTD AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
As of June 30, 2021 | As of | |||
USD'000 | RMB'000 | RMB'000 | ||
ASSETS AND LIABILITIES | ||||
NONCURRENT ASSETS | ||||
Property and equipment, net | 28 | 178 | 68 | |
Right-of-use assets, net | 7,949 | 51,326 | 58,458 | |
Total noncurrent assets | 7,977 | 51,504 | 58,526 | |
CURRENT ASSETS | ||||
Inventories, net | 4,238 | 27,364 | 52,201 | |
Trade receivables, net | 9,105 | 58,782 | 101,470 | |
Other receivables and prepayments | 1,205 | 7,780 | 845 | |
Cash and bank balances | 5,270 | 34,029 | 12,344 | |
Total current assets | 19,818 | 127,955 | 166,860 | |
CURRENT LIABILITIES | ||||
Trade payables | 851 | 5,494 | 6,750 | |
Accrued liabilities and other payables | 3,550 | 22,927 | 22,846 | |
Amounts owed to related parties | 5,630 | 36,348 | 36,348 | |
Lease liabilities | 2,389 | 15,423 | 13,431 | |
Taxes payable | 96 | 620 | 1,934 | |
Total current liabilities | 12,516 | 80,812 | 81,309 | |
NET CURRENT ASSETS | 7,302 | 47,143 | 85,551 | |
NONCURRENT LIABILITIES | ||||
Lease liabilities | 4,769 | 30,789 | 46,728 | |
Total noncurrent liabilities | 4,769 | 30,789 | 46,728 | |
NET ASSETS | 10,510 | 67,858 | 97,349 | |
EQUITY | ||||
Share capital | 145 | 937 | 591 | |
Reserves | 10,365 | 66,921 | 96,758 | |
Total stockholders' equity | 10,510 | 67,858 | 97,349 | |
ANTELOPE ENTERPRISE HOLDINGS LIMITED AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Six Months ended June 30, | ||||
2021 | 2020 | |||
USD'000 | RMB'000 | RMB'000 | ||
Net sales | 7,744 | 50,107 | 39,787 | |
Cost of goods sold | 8,749 | 56,610 | 38,848 | |
Gross profit (loss) | (1,005) | (6,503) | 939 | |
Other income | 1,106 | 7,154 | 9,767 | |
Selling and distribution expenses | (498) | (3,219) | (5,203) | |
Administrative expenses | (2,658) | (17,196) | (14,708) | |
Bad debt expense | (7,701) | (49,827) | (101,800) | |
Finance costs | (169) | (1,094) | (418) | |
Other expenses | (12) | (77) | - | |
Loss before taxation | (10,937) | (70,762) | (111,423) | |
Income tax expense | 1 | 7 | 85 | |
Loss attributable to shareholders | (10,938 ) | (70,769) | (111,508) | |
Other comprehensive loss | ||||
Exchange differences on translation of financial | 12 | 76 | (91) | |
Total comprehensive loss for the year | (10,950) | (70,693) | (111,599) | |
Loss per share | ||||
Basic (RMB) | (2.51) | (16.24) | (40.82) | |
Diluted (RMB) | (2.51) | (16.24) | (40.82) | |
ANTELOPE ENTERPRISE HOLDINGS LIMITED AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
Six Months ended June | |||||||||
2021 | 2020 | ||||||||
USD'000 | RMB'000 | RMB'000 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Loss before taxation | (10,937) | (70,762) | (111,423) | ||||||
Adjustments for | - | ||||||||
Operating lease charge | 1,087 | 7,035 | 6,279 | ||||||
Depreciation of property, plant and | 3 | 19 | 6 | ||||||
Amortization of prepaid expenses | - | - | 2,800 | ||||||
Bad debt provision of trade receivables | 7,701 | 49,827 | 101,800 | ||||||
Share based compensation | 129 | 832 | 318 | ||||||
Interest expense on lease liability | 169 | 1,094 | 410 | ||||||
Operating cash flows before working capital | (1,848) | (11,955) | 190 | ||||||
Decrease (increase) in inventories | 3,838 | 24,837 | (21,129) | ||||||
Decrease (Increase) in trade | (1,103) | (7,139) | 39,976 | ||||||
Decrease (Increase) in other receivables and prepayments | (1,072) | (6,934) | (5,473) | ||||||
Decrease in trade payables | (194) | (1,255) | (11,206) | ||||||
Decrease in unearned revenue | - | - | (396) | ||||||
Increase (decrease) in taxes payable | (203) | (1,315) | (1,028) | ||||||
Decrease in accrued liabilities, other payables, and amounts owed to related parties | 13 | 82 | 393 | ||||||
Cash generated from (used in) operations | (569) | (3,679) | 1,327 | ||||||
Interest paid | - | - | - | ||||||
Income tax paid | (1) | (7) | (15) | ||||||
Net cash generated from (used in) operating activities | (570) | (3,686) | 1,312 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Acquisition of fixed assets | (20) | (129) | - | ||||||
Decrease in restricted cash | - | - | 2,785 | ||||||
Net cash generated from (used in) investing activities | (20) | (129) | 2,785 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Payment for lease liabilities | (2,313) | (14,964) | (14,605) | ||||||
Insurance of share capital for equity financing | 4,633 | 29,976 | 8,089 | ||||||
Warrants exercised | 1,607 | 10,394 | - | ||||||
Advance from related parties | - | - | 7,780 | ||||||
Net cash generated from financing activities | 3,927 | 25,406 | 1,264 | ||||||
NET INCREASE IN CASH & EQUIVALENTS | 3,337 | 21,591 | 5,361 | ||||||
CASH & EQUIVALENTS, BEGINNING OF PERIOD | 1,892 | 12,344 | 8,212 | ||||||
EFFECT OF FOREIGN EXCHANGE RATE DIFFERENCES | 41 | 94 | (91) | ||||||
CASH & EQUIVALENTS, END OF PERIOD | 5,270 | 34,029 | 13,482 | ||||||
ANTELOPE ENTERPRISE HOLDINGS., LTD. AND ITS SUBSIDIARIES | |||||||||
SALES VOLUME AND AVERAGE SELLING PRICE (UNAUDITED) | |||||||||
Six months ended June 30 | |||||||||
2021 | 2020 | ||||||||
Sales volume (square meters) | 2,045,295 | 1,762,465 | |||||||
Average Selling Price (in RMB / square meter) | 20.63 | 22.57 |
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SOURCE Antelope Enterprise Holdings Limited
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