|By PR Newswire||
|April 1, 2014 12:31 AM EDT||
TORONTO, March 31, 2014 /CNW/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia Bio-Chem" or the "Company") announces its financial results for the three-month and fiscal year ending December 31, 2013.
The Company continues to manage its capacity utilization in reaction to
market conditions. During the fourth quarter, the Company's Changtu
and Daqing plants operated at approximately 12% capacity while the
newly acquired Tieling facility remained closed. Consequently,
revenues were $18.0 million during the fourth quarter representing a
12.3% decline from the same period of 2012.
During the fourth quarter, lower starch prices caused a negative gross
margin of 13.4% compared with a negative gross margin of 13.0% during
the same period in 2012.
The Company took a $30.0 million non-cash charge during the quarter to
reflect impairment of the assets employed in the business.
As a result of the impairment charge, the Company 's EBITDA decreased
during the fourth quarter to negative $34.3 million compared with
negative $8.1 million during the fourth quarter of 2012.
Net loss for the fourth quarter was $41.0 million (-$0.48 per share)
compared with a net loss of $14.4 million (-$0.17 per share) during the
fourth quarter of 2012
The Company continues to enjoy the strong support of its banking group
and successfully renewed all loans due in the fourth quarter and
obtained additional $4.7 million in loans in the quarter.
The Company maintains unrestricted cash balance of $1.6 million at
December 31, 2013.
On March 7, 2014 the Company announced that its controlling shareholders
have entered into a letter of intent to sell of their shares of Asia
Bio-Chem to a subsidiary of the Chinese state-owned Beidahuang State
Farm Group General Corp. This transaction is expected to close during
the second quarter of the current fiscal year.
- On February 28, 2014 the Company announced that it was put on notice by the Toronto Stock Exchange that its common shares will be delisted on March 28, 2014. In order to provide continuous trading in its shares, the Company obtained approval for listing on the Canadian Securities Exchange which commenced on March 27, 2014.
"During 2013 our industry has continued to struggle from the weak Chinese economy and we have seen rationalization and consolidation," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem. "We are pleased to be part of this consolidation through our pending transaction with Beidahuang State Farm Group. Upon closing, Asia Bio-Chem expects to benefit from financial support and integration with the State Farm corn purchasing and down-stream processing capabilities".
During the fourth quarter, overall production was 24,732 tonnes representing 12% capacity utilization of the Daqing and Changtu facilities. For the fiscal your 2013, capacity utilization of these plants was 31%.
During the fourth quarter, gross margin reached -13.4% as starch and germ prices declined and corn costs remained relatively constant compared with the fourth quarter of 2012. For the year as a whole, gross margin improved to -5.3% from -6.3% the previous year. This improvement was primarily due to lower corn costs and higher product prices for gluten and fibre.
SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian
dollars except per share and
|Three Months Ended||Twelve Months Ended December 31|
|31/12/13||31/12/12||% Change||2013||2012||% Change|
|Gross margin (% of Sales)||-13.4%||-13.0%||-5.3%||-6.3%||112.6%|
|Income (loss) from operations||(7,938)||(10,588)||-244.6%||(28,826)||(32,450)||-103.5%|
|Other income (expense)||(33,378)||(1,331)||-150.4%||(42,876)||(6,306)||n/a|
|Income recovery (taxes)||(358)||(2,446)||n/a||809||(523)||-80.8%|
|EBITDA before stock-based compensation||(34,313)||(8,092)||305.5%||(43,373)||(23,497)||29.1%|
|Earnings per share|
|Weighted average number of shares|
Earnings before interest, taxes, depreciation and amortization ("EBITDA") during the fourth quarter declined by $26.2 million compared with the same period of 2012. However adjusting for the non-cash impairment charge, EBITDA improved during the fourth quarter by $3.8 million compared with the fourth quarter of 2012.
For the fiscal year, EBITDA, after adjusting for the impairment charge, improved to negative $13.3 million from negative $19.5 million during fiscal 2012.
In addition to the impairment charge, the Company experienced higher depreciation and G&A costs during the fourth quarter and fiscal year ended December 31, 2013. These higher costs were largely associated with the Tieling facility which remained closed during the year.
Net losses for the fourth quarter and year was $41.0 million and $72.5 million respectively. While these losses were significantly higher than the corresponding periods of the previous year, the higher losses are almost entirely due to the impairment charge taken in the fourth quarter.
During 2013, the Company's unrestricted cash position declined to $1.6 million and total debt increased to $209.5 million as at December 31, 2013.
The Company will hold a conference call to discuss its results hosted by Mr. Zhiping Wang, President and Chief Executive Officer, Mr. Robert Wilson, Executive Vice President, and Ms. Elaine Zhao, Chief Financial Officer. Details regarding the call are as follows:
|Date:||Tuesday, April 1, 2014|
|Time:||9:00 AM Eastern Standard Time|
|Dial in number:||1-888-231-8191 or 647-427-7450|
|Conference ID and|
|Replay pass code:||10088019|
|Taped Replay:||1-855-859-2056 or 416-849-0833|
|(Available until April 7, 2014)|
About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the People's Republic of China, is in the business of processing corn into cornstarch, germ and gluten for sale into the domestic Chinese market. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 1.5 million tonnes of corn per year.
This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects,", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.
SOURCE Asia Bio-Chem Group Corp.
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