Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2023

Rhea-AI Summary

MingZhu Logistics Holdings Limited (YGMZ) announced unaudited financial results for the six months ended June 30, 2023, with a 7.0% decrease in revenue, a 2.4% decrease in operating expenses, and a net loss of $805,636. The company had a cash balance of $4.3 million and an accounts receivable balance of $15.5 million as of June 30, 2023.

Positive

• Decrease in operating expenses
• Efforts to reduce operating expenses
• Maintaining a healthy balance sheet

Negative

• 7.0% decrease in revenue
• Net loss of $805,636
• Increase in transportation costs by 83%

Insights

Financial Analyst

The financial results of MingZhu Logistics Holdings Limited indicate a contraction in revenue by 7.0% for the first half of 2023 compared to the same period last year. This decline is a significant indicator of the company's performance amidst the broader economic challenges. The reduction in operating expenses, while beneficial to the company's balance sheet, was not sufficient to offset the revenue decrease, resulting in a net loss for the period. The financial health of MingZhu is of particular interest to investors, as the cash balance of $4.3 million and accounts receivable of $15.5 million must be weighed against the backdrop of increased transportation costs and a cautious acquisition strategy. The shift in prepayment balances suggests a change in the company's working capital management, which could be a response to the current economic environment.

Market Research Analyst

MingZhu's report reflects broader trends in the logistics and transportation industry, where companies are experiencing pressure from rising costs and fluctuating demand. The 83% increase in transportation costs is a substantial figure that exceeds general industry trends, highlighting the need for MingZhu to enhance its cost management strategies. The company's focus on reducing operating expenses and prioritizing cost reductions in operations is a strategic approach to maintaining competitiveness. However, the slowed diversification strategy due to a sluggish acquisition environment may limit MingZhu's ability to mitigate risks associated with economic volatility. Stakeholders should monitor the company's ability to navigate these challenges while seeking opportunities for growth in a cost-effective manner.

Economist

The unaudited financial results of MingZhu provide insights into the economic forces at play within the logistics sector. Higher interest rates, as mentioned by the CEO, are likely impacting the company's cost of capital and acquisition strategy, reflecting a broader monetary tightening environment. The reported net loss contrasts with the net income from the previous year, signaling a downturn that could have ripple effects on employment, investment and stakeholder confidence. The company's efforts to minimize the impact of volatility on its balance sheet, while commendable, must be considered in the context of the long-term sustainability of its business model amidst ongoing economic uncertainties.

SHENZHEN, China, Dec. 27, 2023 /PRNewswire/ -- MingZhu Logistics Holdings Limited ("MingZhu" or the "Company") (NASDAQ: YGMZ), an elite provider of logistics and transportation services to businesses, today announced its unaudited financial results for the six months ended June 30, 2023.

Mr. Jinlong Yang, CEO of MingZhu, commented, "While the broader economic environment remained challenged, with customers adjusting to demand fluctuations, our team was focused and worked to minimize the impact of the volatility where we could. Through our efforts, we were able to reduce operating expenses in the first six months of 2023, compared to the year ago period, enabling us to maintain a healthy balance sheet. Our longer-term business diversification strategy remains in place but has been slowed by a sluggish acquisition environment given higher interest rates and costs, including an 83% increase in our transportation costs, which served to depress our net income. We believe there are meaningful opportunities for further cost reductions in our operations and have made this a priority moving forward as we continue to adjust our business to the evolving market."

Operating Results for the Six Months Ended June 30, 2023

Revenue for the six months ended June 30, 2023, decreased by $4,239,764, or 7.0%, to $56.1 million from $60.3 million for the same period of last year.

Total operating expenses decreased by $1,430,036, or 2.4%, to $57.0 million for the six months ended June 30, 2023, from $58.4 million for the same period of last year.

Net loss for the six months ended June 30, 2023 was $805,636 compared to net income of $1,645,083 in the year ago period. The decrease in net income was primarily due to the lower revenue.

Balance Sheet and Cash Flow

As of June 30, 2023, the Company had a $4.3 million balance of cash, and an accounts receivable balance of $15.5 million. The balance of prepayment to suppliers totaled $10.7 million as of June 30, 2023, compared to $7.3 million as of December 31, 2022, as the Company retrieved partial payments back from suppliers or received services and products.

About MingZhu Logistics Holdings Limited (NASDAQ: YGMZ)

Established in 2002 and headquartered in Shenzhen, China, MingZhu Logistics Holdings Limited is a 4A-rated professional trucking service provider. Based on the Company's regional logistics terminals in Guangdong Province and Xinjiang Autonomous Region, MingZhu Logistics Holdings offers tailored solutions to our clients to deliver their goods through our network density and broad geographic coverage across the country by a combination of self-owned fleets tractors and trailers and subcontractors' fleets. For more information, please visit ir.szygmz.com.

Forward-Looking Statements

The statements in this press release regarding the Company's future expectations, plans and prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding plans, goals, objectives, strategies, future events, expected performance, assumptions and any other statements of fact that have not occurred. Any statements that contain the words "may", "will", "want", "should", "believe", "expect", "anticipate", "estimate", "calculate" or similar statements that are not factual in nature are to be considered forward-looking statements. Actual results may differ materially from historical results or from those expressed in these forward-looking statements as a result of a variety of factors. These factors include, but are not limited to, the Company's strategic objectives, the Company's future plans, market demand and user acceptance of the Company's products or services, technological advances, economic trends, the growth of the trucking services market in China, the Company's reputation and brand, the impact of industry competition and bidding, relevant policies and regulations, fluctuations in China's macroeconomic conditions, and the risks and assumptions disclosed in the Company's reports provided to the CSRC (China Security Regulatory Commission). For these and other related reasons, we advise investors not to place any reliance on these forward-looking statements, and we urge investors to review the Company's relevant SEC filings for additional factors that may affect the Company's future results of operations. The Company undertakes no obligation to publicly revise these forward-looking statements subsequent to the filing of these documents as a result of changes in particular events or circumstances. 

 

 

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
		As of				As of
		June 30,				December 31,
		2023				2022
		USD				USD
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	4,307,362			$	5,687,311
Accounts receivable, net			15,496,761				19,127,321
Prepayments			10,666,774				7,339,861
Other receivables			3,462,794				2,795,843
Loans receivable*			31,085,776				28,622,704
Amount due from related parties			5,406,484				2,677,345
Total current assets			70,425,951				66,250,385
NON-CURRENT ASSET
Property and equipment, net			7,338,773				9,073,698
Deferred tax assets			241,381				238,237
Deposits			3,059,220				2,657,126
Goodwill			33,237,409				33,237,409
Total non-current asset			43,876,783				45,206,470
Total assets		$	114,302,734			$	111,456,855
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings		$	13,842,541			$	10,022,335
Accounts payable			7,147,277				10,134,535
Other payables and accrued liabilities			33,376,960				29,054,674
Amount due to related parties			6,933,731				6,108,866
Tax payable			4,754,198				5,278,436
Current maturities of long-term bank borrowings			206,209				586,935
Current portion of capital lease and financing obligations			714,621				757,088
Total current liabilities			66,975,537				61,942,869
NON-CURRENT LIABILITIES
Long-term bank borrowings			274,485				253,352
Long-term portion of capital lease and financing obligations			687,901				1,158,642
Total non-current liabilities			962,386				1,411,994
Total liabilities			67,937,923				63,354,863
SHAREHOLDERS' EQUITY
Ordinary shares: $0.001 par value, 50,000,000 shares authorized, 22,960,277 and 22,960,277 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively**			22,960				22,960
Share subscription receivables			(848,414)				(847,086)
Additional paid-in capital			41,583,382				41,734,546
Statutory reserves			1,046,249				1,036,841
Retained earnings			5,825,256				7,704,538
Accumulated other comprehensive Loss			(1,264,622)				(1,549,807)
Total shareholders' equity			46,364,811				48,101,992
Total liabilities and shareholders' equity		$	114,302,734			$	111,456,855

 

*	Loans receivable mainly comprise of interest-free advances to third parties as a result of strategic business cooperation.

**	Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

 

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
		For the Six Months Ended June 30,
		2023				2022
		USD				USD
REVENUES		$	56,090,997			$	60,330,761
COSTS AND EXPENSES
Transportation costs			32,840,752				17,953,860
Costs of rental services			13,020,751				24,962,970
Costs of insurance services			8,576,401				12,740,606
General and administrative expenses			2,112,502				2,471,467
Sales and marketing expenses			442,500				294,039
Total costs and expenses			56,992,906				58,422,942
(LOSS) INCOME FROM OPERATIONS			(901,909)				1,907,819
OTHER (EXPENSES) INCOME
Interest expenses			(413,618)				(652,372)
Other expenses			(12,815)				(358,267)
Other income			482,540				1,237,049
Total other income, net			56,107				226,410
(LOSS) INCOME    BEFORE INCOME TAXES			(845,802)				2,134,229
(BENEFIT)  PROVISION FOR INCOME TAXES			(40,166)				489,147
NET LOSS			(805,636)				1,645,082
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment			285,185				(229,321)
COMPREHENSIVE (LOSS) INCOME		$	(520,451)			$	1,415,761
Weighted average shares used in computation:
Basic*			21,429,877				21,429,877
Diluted*			20,885,442				20,885,442
(LOSS) EARNINGS PER SHARE - BASIC*		$	(0.04)			$	0.07
(LOSS) EARNINGS PER SHARE - DILUTED*		$	(0.04)			$	0.07

 

*	Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

 

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
										Share				Additional												Accumulated Other Comprehensive
										Subscription				Paid-in				Statutory				Retained				Income
		Shares*				Amount				Receivables				Capital				Reserve				Earnings				(Loss)				Total
						USD				USD				USD				USD				USD				USD				USD
BALANCE, December 31, 2022			22,960,277			$	22,960			$	(847,086)			$	41,734,546			$	1,036,841			$	7,704,538			$	(1,549,807)			$	48,101,992
Net income (loss) for the period			-				-				-				-				-				(805,636)				-				(805,636)
Foreign currency translation adjustment			-				-				(1,328)				(151,164)				-				(1,064,238)				285,185				(931,545)
Appropriation to statutory reserve			-				-				-				-				9,408				(9,408)				-				-
BALANCE, June 30, 2023			22,960,277			$	22,960			$	(848,414)			$	41,583,382			$	1,046,249			$	5,825,256			$	(1,264,622)			$	46,364,811

 

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		For the Six Months Ended June 30,
		2023				2022
		USD				USD
Cash flows from operating activities:
Net (loss)  income		$	(805,636)			$	1,645,083
Adjustments to reconcile net income to net cash provided (used in by operating activities:
Amortization of deferred financing fees			-				26,607
Provision for doubtful accounts			19,413				-
Depreciation for property and equipment			851,324				3,441,564
Deferred income tax benefit			(12,532)				(24,798)
Changes in operating assets and liabilities
Accounts receivable			3,015,034				(19,659,925)
Prepayments			(3,845,327)				1,080,484
Other receivables			(2,629,641)				702,011
Loans receivable			(1,992,268)				(12,301,292)
Deposits			(822,745)				-
Accounts payable			(2,821,222)				9,226,616
Other payables and accrued liabilities			5,356,422				9,259,017
Tax payables			(278,606)				2,572,424
Net cash used in operating activities			(3,965,784)				(4,032,209)
Cash flows from investing activities:
Purchases of equipment			-				(1,343,653)
Disposal of equipment			31,102				-
Cash from acquisition of subsidiary			-				410,863
Net cash provided by (used in)   investing activities			31,102				(932,790)
Cash flows from financing activities:
Proceeds from short-term bank borrowings			4,876,613				2,988,620
Repayment of short-term bank borrowings			(354,778)				(1,122,278)
Repayment of long-term bank borrowings			-				(149,756)
Repayments of loans from other financial institutions			(784,097)				(144,126)
Repayments of obligations under capital leases			-				(1,864,325)
Amounts advanced from related parties			3,222,649				3,128,231
Repayments to related parties			(4,257,112)				-
Net cash provided by financing activities			2,703,275				2,836,366
Effect of exchange rate change on cash			(148,542)				86,862
Net decrease   in cash			(1,379,949)				(2,041,771)
Cash at beginning of the period			5,687,311				5,752,117
Cash at end of the period		$	4,307,362			$	3,710,346
Supplemental disclosure of cash flow information:
Interest paid		$	504,655			$	242,386
Income tax paid		$	10,620			$	769,924
Supplemental non-cash investing and financing information:
Non-cash capital leases to acquire revenue equipment		$	-			$	-
Uncollected receivable from disposal of revenue equipment		$	-			$	-
Reconciliation to amounts on consolidated balance sheets:
Cash		$	4,307,362			$	3,710,346
Restricted cash			-				-
Total cash and restricted cash		$	4,307,362			$	3,710,346

 

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SOURCE MingZhu Logistics Holdings Limited

FAQ

What are the unaudited financial results announced by MingZhu Logistics Holdings Limited for the six months ended June 30, 2023?

MingZhu Logistics Holdings Limited (YGMZ) announced unaudited financial results for the six months ended June 30, 2023, with a 7.0% decrease in revenue, a 2.4% decrease in operating expenses, and a net loss of $805,636.

What was the revenue for the six months ended June 30, 2023?

The revenue for the six months ended June 30, 2023, decreased by $4,239,764, or 7.0%, to $56.1 million from $60.3 million for the same period of last year.

What was the net loss for the six months ended June 30, 2023?

The net loss for the six months ended June 30, 2023 was $805,636 compared to net income of $1,645,083 in the year ago period.

What was the cash balance and accounts receivable balance as of June 30, 2023?

As of June 30, 2023, the company had a cash balance of $4.3 million and an accounts receivable balance of $15.5 million.

What were the efforts made by MingZhu to minimize the impact of demand fluctuations?

The team at MingZhu was focused and worked to minimize the impact of demand fluctuations, enabling them to reduce operating expenses in the first six months of 2023 compared to the year ago period.

What is the ticker symbol for MingZhu Logistics Holdings Limited?

The ticker symbol for MingZhu Logistics Holdings Limited is YGMZ.