Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2022
BEIJING, Sept. 29, 2022 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. (NASDAQ:FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the second quarter of 2022 ended June 30, 2022.
Second quarter highlights
- Net sales were RMB88.7 million (US$13.2 million)
- Sales of specialty films were RMB64.9 million (US$9.7 million), or 73.1% of total revenues
- Gross profit was RMB24.9 million (US$3.7 million), representing a gross profit margin of 28.1%
- Net profit attributable to the Company was RMB13.7 million (US$2.0 million)
First Six Months 2022 Financial Highlights
- Net sales were RMB191.9 million (US$28.6 million)
- Sales of specialty films totaled RMB136.8 million (US$20.4 million), or 71.3% of total revenues
- Overseas sales were RMB19.6 million (US$2.9 million), equivalent to 10.2% of total revenues
- Our gross profit was RMB55.1 million (US$8.2 million), representing a gross profit margin of 28.7%
- Net income attributable to the Company amounted to RMB30.8 million (US$4.6 million)
Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "We saw positive overall sales trends, particularly in specialty films, such as a base film for dry film, which accounted for 73.1% of total revenue. The increase in base film sales demonstrates that our customers value the high quality of our products, and we believe it has helped the company's financial performance. At Fuwei Films, we prioritize innovation and utilize a distinct marketing approach while expanding future end-user markets for our film goods. Through these efforts, we anticipate that the Company will continue capitalizing on new opportunities despite difficult market and economic conditions."
Second Quarter 2022 Results
Net sales during the second quarter ended June 30, 2022, were RMB88.7 million (US$13.2 million), compared to RMB100.6 million during the same period in 2021, representing a year-over-year decrease of RMB11.9 million, or 11.8% on an annual base. The average sales price decline contributed to a RMB3.6 million year-over-year decrease while lower sales volume represented a decline of RMB8.3 million.
Sales of specialty films in the second quarter of 2022 were RMB64.9 million (US$9.7 million), or 73.1% of total revenues, compared to RMB69.0 million, or 68.6% in the same period of 2021, representing a decrease of RMB4.1 million, or 5.9%. The decline in sales volume resulted in a reduction of RMB2.0 million, while a lower average sales price caused a decrease of RMB2.1 million.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
Three-Month Period | % of Total | Three-Month Period | % of Total | |||
RMB | US$ | RMB | ||||
Stamping and | 15,594 | 2,328 | 17.6 % | 21,762 | 21.6 % | |
Printing film | 4,626 | 691 | 5.2 % | 5,232 | 5.2 % | |
Metallization film | 161 | 24 | 0.2 % | 1,090 | 1.1 % | |
Specialty film | 64,864 | 9,684 | 73.1 % | 68,979 | 68.6 % | |
Base film for other applications | 3,489 | 521 | 3.9 % | 3,519 | 3.5 % | |
88,734 | 13,248 | 100.0 % | 100,582 | 100.0 % | ||
Overseas sales totaled RMB9.4 million, or US$1.4 million, equivalent to10.6% of total revenues, compared with RMB13.4 million, or 13.3% of total revenues in the second quarter of 2021. Higher average sales price represented an increase of RMB0.6 million, while the sales volume decline resulted in a decrease of RMB4.6 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
Three-Month Period | % of Total | Three-Month Period | % of Total | |||
RMB | US$ | RMB | ||||
Sales in China | 79,330 | 11,844 | 89.4 % | 87,205 | 86.7 % | |
Sales in other countries | 9,404 | 1,404 | 10.6 % | 13,377 | 13.3 % | |
88,734 | 13,248 | 100.0 % | 100,582 | 100.0 % | ||
Gross profit was RMB24.9 million (US$3.7 million) for the second quarter ended June 30, 2022, representing a gross profit margin of 28.1%, compared to a gross profit margin of 39.6% for the same period in 2021.
Operating expenses for the second quarter ended June 30, 2022, amounted to RMB14.1 million (US$2.1 million) compared to RMB14.0 million in the same 2021 period.
Net profit attributable to the Company during the second quarter ended June 30, 2022, totaled RMB13.7 million (US$2.0 million), while net profit attributable to the Company was RMB19.8 million during the same period in 2021.
Basic and diluted net profit per share was RMB4.20 (US$0.63) and RMB6.06 for the three-month period ended June 30, 2022, and 2021, respectively.
Total shareholders' equity was RMB347.8 million, or US$51.9 million, as of June 30, 2022, compared with RMB317.0 million as of December 31, 2021.
As of June 30, 2022, the Company had 3,265,837 basic and diluted ordinary shares outstanding.
Financial Results for the Six Months Ended June 30, 2022
Net sales during the six-month period ended June 30, 2022, were RMB191.9 million (US$28.6 million), compared to RMB202.2 million in the same period in 2021, representing a 5.1% decrease, or RMB10.3 million. The average sales price decline represented a decrease of RMB3.7 million, while lower sales volume resulted in a decrease of RMB6.6 million.
In the six-month period ended June 30, 2022, sales of specialty films totaled RMB136.8 million (US$20.4 million), or 71.3% of our total revenues, compared to RMB133.9 million, or 66.2% in the same period of 2021. Specialty films sales rose RMB2.9 million, or 2.2%, compared to the same period in 2021. The increase in sales volume amounted to RMB4.9 million, while lower average sales price caused a decrease of RMB2.0 million.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
Six-Month Period | % of Total | Six-Month Period | % of Total | |||
RMB | US$ | RMB | ||||
Stamping and | 37,705 | 5,630 | 19.7 % | 47,113 | 23.3 % | |
Printing film | 9,103 | 1,359 | 4.7 % | 10,714 | 5.3 % | |
Metallization film | 1,582 | 236 | 0.8 % | 2,733 | 1.4 % | |
Specialty film | 136,811 | 20,425 | 71.3 % | 133,941 | 66.2 % | |
Base film for other | 6,666 | 995 | 3.5 % | 7,705 | 3.8 % | |
191,867 | 28,645 | 100.0 % | 202,206 | 100.0 % | ||
Overseas sales during the six months ended June 30, 2022, were RMB19.6 million, or US$2.9 million, equivalent to 10.2% of total revenues, compared with RMB22.4 million, or 11.1% of total revenues in the same period in 2021. Overseas sales declined RMB2.8 million from the same 2021 period. Lower sales volume explained the RMB4.2 million decrease, while a higher average sales price contributed to an increase of RMB1.4 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
Six-Month Period | % of Total | Six-Month Period | % of Total | |||
RMB | US$ | RMB | ||||
Sales in China | 172,252 | 25,717 | 89.8 % | 179,801 | 88.9 % | |
Sales in other | 19,615 | 2,928 | 10.2 % | 22,405 | 11.1 % | |
191,867 | 28,645 | 100.0 % | 202,206 | 100.0 % | ||
Our gross profit totaled RMB55.1 million (US$8.2 million) for the first six months ended June 30, 2022, representing a gross margin of 28.7%, compared to a gross margin of 40.7% for the same period in 2021, a 12% decrease in the period. Our average product sales prices fell 1.9% from the same period last year, while the average cost of goods sold rose 18.0% compared to last year, resulting in a decrease in our gross margin.
Operating expenses for the six months ended June 30, 2022, were RMB27.8 million (US$4.2 million), compared to RMB24.4 million in the same period in 2021, equal to RMB3.4 million, or 13.9% higher than the same period in 2021. This increase was mainly explained by higher expenses on R&D and welfare.
Net income attributable to the Company during the first half of 2022 was RMB30.8 million (US$4.6 million) compared to net income attributable to the Company of RMB51.2 million during the same period in 2021, a RMB20.4 million decrease from the same period in 2021 explained by the factors described above.
Cash, cash equivalent and restricted cash totaled RMB265.2million (US$39.6 million) as of June 30, 2022. Total shareholders' equity was RMB347.8 million (US$51.9 million).
As of June 30, 2022, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.
About Fuwei Films
Fuwei Films conducts its business through its wholly-owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei develops, manufactures, and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used for packaging food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.
Safe Harbor
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include negative impacts of the determination of the U.S. Securities and Exchange Commission that the Public Company Accounting Oversight Board ("PCAOB") is currently unable to inspect our auditor in relation to their audit work and the potential that our ordinary shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act ("HFCAA") in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China, or 2023 if proposed changes to the law are enacted, the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the uncertainty of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, potential delisting of our ordinary shares under the Holding Foreign Company Affordable Act if the US Public Company Accounting Oversight Board is unable to inspect our auditors located in China, uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from the information contained in the forward-looking statements as a result of the risk factors.
For more information, please contact:
In China:
Ms. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: [email protected]
In the U.S.:
Lucia Domville
Investor Relations
Grayling
Phone: +1-646-824-2856
Email: [email protected]
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
AS OF JUNE 30, 2022, AND DECEMBER 31, 2021 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
June 30, 2022 | December 31, 2021 | ||||
RMB | US$ | RMB | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | 245,728 | 36,686 | 250,608 | ||
Restricted cash | 19,500 | 2,911 | 28,294 | ||
Accounts and bills receivable, net | 25,337 | 3,783 | 29,225 | ||
Inventories | 47,030 | 7,021 | 35,456 | ||
Advance to suppliers | 17,645 | 2,634 | 7,933 | ||
Prepayments and other receivables | 2,266 | 338 | 1,199 | ||
Deferred tax assets - current | 1,152 | 172 | 1,144 | ||
Total current assets | 358,658 | 53,545 | 353,859 | ||
Property, plant and equipment, net | 101,712 | 15,185 | 106,928 | ||
Construction in progress | 6,253 | 934 | - | ||
Lease prepayments, net | 14,418 | 2,153 | 14,685 | ||
Deferred tax assets – non-current | 156 | 23 | 227 | ||
Total assets | 481,197 | 71,840 | 475,699 | ||
Current liabilities | |||||
Short-term borrowings | 65,000 | 9,704 | 65,000 | ||
Accounts payables | 22,368 | 3,339 | 22,616 | ||
Notes payable | 37,470 | 5,594 | 50,126 | ||
Advance from customers | 1,343 | 201 | 7,672 | ||
5,429 | 811 | 11,479 | |||
Total current liabilities | 131,610 | 19,649 | 156,893 | ||
Deferred tax liabilities | 1,756 | 262 | 1,789 | ||
Total liabilities | 133,366 | 19,911 | 158,682 | ||
Equity | |||||
Shareholders' equity | |||||
Registered capital (of US$0.519008 par value; 135,000,000 | 13,323 | 1,989 | 13,323 | ||
Additional paid-in capital | 311,907 | 46,566 | 311,907 | ||
Statutory reserve | 37,441 | 5,590 | 37,441 | ||
Retained earnings | (15,680) | (2,341) | (46,494) | ||
Cumulative translation adjustment | 840 | 125 | 840 | ||
Total shareholders' equity | 347,831 | 51,929 | 317,017 | ||
Total equity | 347,831 | 51,929 | 317,017 | ||
Total liabilities and equity | 481,197 | 71,840 | 475,699 | ||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021 | |||||||||||
(amounts in thousands except share and per share value) | |||||||||||
(Unaudited) | |||||||||||
The Three-Month Period Ended June 30, | The Six-Month Period Ended June 30, | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
RMB | US$ | RMB | RMB | US$ | RMB | ||||||
Net sales | 88,734 | 13,248 | 100,582 | 191,867 | 28,645 | 202,206 | |||||
Cost of sales | 63,832 | 9,530 | 60,728 | 136,795 | 20,423 | 119,902 | |||||
Gross profit | 24,902 | 3,718 | 39,854 | 55,072 | 8,222 | 82,304 | |||||
Operating expenses | |||||||||||
Selling expenses | 5,237 | 782 | 4,944 | 10,378 | 1,549 | 9,058 | |||||
Administrative | 8,856 | 1,322 | 9,014 | 17,431 | 2,602 | 15,369 | |||||
Total operating | 14,093 | 2,104 | 13,958 | 27,809 | 4,151 | 24,427 | |||||
Operating income | 10,809 | 1,614 | 25,896 | 27,263 | 4,071 | 57,877 | |||||
Other income (expense) | |||||||||||
- Interest income | 2,016 | 301 | 1,368 | 3,877 | 579 | 2,225 | |||||
- Interest expense | (1,080) | (161) | (1,378) | (2,138) | (319) | (2,953) | |||||
- Other incomes | 1,973 | 295 | (344) | 1,842 | 275 | (222) | |||||
Total other income | 2,909 | 435 | (354) | 3,581 | 535 | (950) | |||||
Income before | 13,718 | 2,049 | 25,542 | 30,844 | 4,606 | 56,927 | |||||
Income tax expense | (12) | (2) | (5,736) | (30) | (4) | (5,755) | |||||
Net income | 13,706 | 2,047 | 19,806 | 30,814 | 4,602 | 51,172 | |||||
Net income (loss) | - | - | - | - | - | - | |||||
Net income (loss) | 13,706 | 2,047 | 19,806 | 30,814 | 4,602 | 51,172 | |||||
Other comprehensive | |||||||||||
- Foreign currency | - | - | - | - | - | - | |||||
- Foreign currency | - | - | - | - | - | - | |||||
Comprehensive loss | - | - | - | - | - | - | |||||
Comprehensive income | 13,706 | 2,047 | 19,806 | 30,814 | 4,602 | 51,172 | |||||
Earnings per share, | 4.20 | 0.63 | 6.06 | 9.44 | 1.41 | 15.67 | |||||
Weighted average | 3,265,837 | 3,265,837 | 3,265,837 | 3,265,837 | 3,265,837 | 3,265,837 | |||||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
The Six-Month Period Ended June 30, | |||||
2022 | 2021 | ||||
RMB | US$ | RMB | |||
Cash flow from operating activities | |||||
Net income | 30,814 | 4,602 | 51,172 | ||
Adjustments to reconcile net loss to net cash | |||||
used in operating activities | |||||
- Depreciation of property, plant and equipment | 6,646 | 992 | 6,109 | ||
- Amortization of intangible assets | 267 | 40 | 266 | ||
- Deferred income taxes | 30 | 4 | 5,755 | ||
- Bad debt recovery | 53 | 8 | 338 | ||
-Inventory provision | - | - | (497) | ||
Changes in operating assets and liabilities | |||||
- Accounts and bills receivable | 3,836 | 573 | (12,667) | ||
- Inventories | (11,575) | (1,728) | 1,456 | ||
- Advance to suppliers | (9,712) | (1,450) | (2,102) | ||
- Prepaid expenses and other current assets | (1,067) | (159) | (52) | ||
- Accounts payable | (248) | (37) | (3,967) | ||
- Accrued expenses and other payables | (5,976) | (893) | (21,118) | ||
- Advance from customers | (6,328) | (945) | (6,389) | ||
- Tax payable | (76) | (11) | 1,682 | ||
Net cash provided by (used in) operating activities | 6,664 | 996 | 19,986 | ||
Cash flow from investing activities | |||||
Purchases of property, plant and equipment | (1,429) | (213) | (730) | ||
Proceeds from sale of property, plant and equipment | - | - | 122,919 | ||
Advanced to suppliers - non-current | - | - | 1,542 | ||
Amount change in construction in progress | (6,253) | (934) | - | ||
Net cash provided by (used in) investing activities | (7,682) | (1,147) | 123,731 | ||
Cash flow from financing activities | |||||
Principal payments of bank loans | - | - | - | ||
Proceeds from (payment to) short-term bank loans | - | - | - | ||
Proceeds from (payment to) related party | - | - | (73,571) | ||
Change in notes payable | (12,656) | (1,889) | (15,000) | ||
Net cash (used in) provided by financing activities | (12,656) | (1,889) | (88,571) | ||
Effect of foreign exchange rate changes | - | (2,129) | - | ||
Net increase in cash and cash equivalent | (13,674) | (4,169) | 55,146 | ||
Cash and cash equivalent | |||||
At beginning of the period | 278,902 | 43,766 | 120,923 | ||
At end of the period | 265,228 | 39,597 | 176,069 | ||
SUPPLEMENTARY DISCLOSURE: | |||||
Interest paid | 2,138 | 319 | 2,953 | ||
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: | |||||
Account payable for plant and equipment: | 1,010 | 151 | 1,010 | ||
View original content:https://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-second-quarter-of-2022-301636949.html
SOURCE Fuwei Films