Hongli Clean Energy Technologies Corp. (NASDAQ:CETC) (“Hongli” or
the “Company”), a vertically integrated producer of clean energy
products located in Henan Province, China, today reported its
second quarter financial results for fiscal year 2016, which ended
December 31, 2015.
Second Quarter Financial Highlights:
- Revenue of syngas was $4,520,206 for the quarter ended December
31, 2015 with sales volume of 46,832,764 cubic meters and an
average selling price per cubic meter of $0.1, which revenue
accounted for 84% of our total revenue, highlighting the company’s
transformation from a coke and coal producer to clean energy
producer.
- Net loss for the quarter ended December 31, 2015 was
$48,689,412, or ($2.03) per diluted share, compared to net profit
of $3,981,858, or $0.17 per diluted share, for the same period of
fiscal year 2015.
- Gross profit decreased by $505,194, or 18.80%, to $2,182,656
but gross margin improved by 19.49 points to 40.69% for the quarter
ended December 31, 2015. The decrease in gross profit (18.80%) was
mainly due to the decline in sales of coal and coke despite the
higher gross profit contributed from sales of syngas.
- Cost of revenues decreased by 68.15%, from $9,989,469 to
$3,181,705 compared to the same period last year. The decrease was
mainly driven by lower sales volumes for coal and coke products and
the low cost of revenue from syngas.
- Revenue decreased by $7,312,958 or 57.69% to $5,364,361 for the
three months ended December 31, 2015. Such decrease resulted from
decreases in sales of coal and coke products to steel plants,
offset by increased sales of our new product, syngas.
The average price of syngas was approximately
$0.10 or RMB 0.62 per cubic meter. The Company has long-term syngas
supply agreements with customers to provide syngas at a fixed
vending price of $0.10 or RMB 0.62 per cubic meter. In some cases,
syngas may be sold with periodic price adjustments. Due to the
control of coal consumption by the Chinese government, the use of
syngas is encouraged and its price is currently lower than natural
gas. The vending price of syngas is stable and we expect the price
to increase.
On November 24, 2015, the Company announced that it has
discontinued its coking business by terminating its coke producing
agreement with Pingdingshan Hongfengxuanmei Coking and Chemical
Company. The Company’s coke inventory will be used for producing
syngas. Company management expects coke demand will continue to
slide due to the current weak economic position of the steel
industry in China. In the meantime, CETC will be more focused on
developing, manufacturing and commercializing its clean energy
products by leveraging its existing technologies and
infrastructure.
In order to reorganize its capital structure and effect the
company’s long-term strategic goal of transforming from a coke and
coal producer to clean energy producer, CETC entered into a Credits
and Debts Transfer Agreement with an unrelated third party,
Wuhan Guangyao New Energy Automobile Operation Co., Ltd.
(“Guangyao”) on January 10, 2016. CETC agreed to make a transfer to
Guangyao with a lump sum of credit assets of RMB 254,160,210.59 and
outstanding debts of RMB 274,167,269.37. The 20,007,058.78
difference will be paid by CETC within 6 months of the effective
date of the agreement, and a 4.5% interest rate will be applied if
not paid on time.
In connection with the Credits and Debts Transfer Agreement,
CETC has also signed an Assets Transfer Agreement with Guangyao to
transfer 900,000 tons of Coking Asset in Construction for RMB
45,692,140. Guangyao will make the payment within 6 months of the
effective date with a 4.5% interest if not paid on time.
The Company’s CEO, Mr. Jianhua Lv, said “The past quarter is a
truly revolutionary quarter for CETC as we made an important
strategic decision to fully discontinue our low margin coal and
coking business. Now 84% of our revenue comes from our flagship
product—syngas—with overall gross profit achieving 40.69%. Though
the macroeconomic conditions in China remain challenging, we
believe our strategy of focusing on developing clean energy
products with our robust innovation capabilities will bring
unprecedented growth to the Company in near future.”
About Hongli Clean Energy Technologies Corp.
Previously known as SinoCoking Coal and Coke Chemical
Industries, Inc., Hongli Clean Energy Technologies Corp. (“Hongli”
or the “Company”) is a Florida corporation and an emerging producer
of clean energy products located in Pingdingshan City, Henan
Province, China. The Company has historically been a
vertically-integrated coal and coke processor of basic and
value-added coal products for steel manufacturers, power
generators, and various industrial users. The Company has been
producing metallurgical coke since 2002, and acts as a key supplier
to regional steel producers in central China. The Company also
produces and supplies thermal coal to its customers in central
China. The Company currently owns its assets and conducts its
operations through its subsidiaries, Top Favour Limited and
PingdingshanHongyuan Energy Science and Technology Development Co.,
Ltd., and its affiliated companies, Henan Province
PingdingshanHongli Coal & Coke Co., Ltd., Baofeng Coking
Factory, BaofengHongchang Coal Co., Ltd., BaofengHongguang
Environment Protection Electricity Generating Co., Ltd., Zhonghong
Energy Investment Company, Henan Hongyuan Coal Seam Gas Engineering
Technology Co., Ltd., BaofengShuangri Coal Mining Co., Ltd., and
BaofengXingsheng Coal Mining Co., Ltd.
For additional information on the Company,
please go to http://www.cetcchina.net/ or refer to the
company's periodic reports filed with the Securities and Exchange
Commission (http://www.cetcchina.net/sec-filings.html). Investors
wishing to receive the Company's corporate communications as they
become available may go to the company's Investor Relations site
(http://www.cetcchina.net/corporate-overview.html) and register
under Email Alerts.
Also, investors may submit questions directly to
Mr. Lv and his staff to receive non-confidential information about
the company's operations and products at the company's "Ask
Management" blog
(http://www.cetcchina.net/ask-management.html).
Forward-Looking Statements
This press release contains forward-looking statements,
particularly as related to, among other things, the business plans
of the Company, statements relating to goals, plans and projections
regarding the Company's financial position and business strategy.
The words or phrases "plans," "would be," "will allow," "intends
to," "may result," "are expected to," "will continue,"
"anticipates," "expects," "estimate," "project," "indicate,"
"could," "potentially," "should," "believe," "think," "considers"
or similar expressions are intended to identify "forward-looking
statements." These forward-looking statements fall within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Act of 1934 and are subject to the safe
harbor created by these sections. Actual results could differ
materially from those projected in the forward-looking statements
as a result of a number of risks and uncertainties. Such
forward-looking statements are based on current expectations,
involve known and unknown risks, a reliance on third parties for
information, transactions or orders that may be cancelled, and
other factors that may cause our actual results, performance or
achievements, or developments in our industry, to differ materially
from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from anticipated results
include risks and uncertainties related to the fluctuation of
local, regional, and global economic conditions, the performance of
management and our employees, our ability to obtain financing,
competition, general economic conditions and other factors that are
detailed in our periodic reports and on documents we file from time
to time with the Securities and Exchange Commission. Statements
made herein are as of the date of this press release and should not
be relied upon as of any subsequent date, and the Company
specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments,
unanticipated events or circumstances after the date of such
statement.
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
December 31, |
|
|
June 30, |
|
|
|
2015 |
|
|
2015 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
46,832 |
|
|
$ |
81,605 |
|
Accounts receivable, net |
|
|
13,654,667 |
|
|
|
13,970,451 |
|
Other receivables and deposits |
|
|
8,605 |
|
|
|
4,928,967 |
|
Inventories |
|
|
1,772,932 |
|
|
|
3,191,605 |
|
Advances to suppliers |
|
|
2,689,182 |
|
|
|
8,216,127 |
|
Prepaid expenses |
|
|
- |
|
|
|
16,670 |
|
Total current assets |
|
|
18,172,218 |
|
|
|
30,405,425 |
|
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
net |
|
|
21,076,180 |
|
|
|
18,750,242 |
|
|
|
|
|
|
|
|
|
|
CONSTRUCTION IN
PROGRESS, net |
|
|
32,194,455 |
|
|
|
65,420,768 |
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
Prepayments |
|
|
18,513,600 |
|
|
|
19,674,034 |
|
Intangible assets, net |
|
|
33,687,664 |
|
|
|
56,355,185 |
|
Long-term investments |
|
|
2,748,002 |
|
|
|
2,920,247 |
|
Other assets |
|
|
107,830 |
|
|
|
114,589 |
|
Total other assets |
|
|
55,057,096 |
|
|
|
79,064,055 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
126,499,949 |
|
|
$ |
193,640,490 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
Current maturity of long term
loans |
|
$ |
40,016,826 |
|
|
$ |
44,471,220 |
|
Accounts payable, trade |
|
|
390,564 |
|
|
|
70,164 |
|
Other payables and accrued
liabilities |
|
|
2,859,271 |
|
|
|
4,503,689 |
|
Other payables - related party |
|
|
496,074 |
|
|
|
736,596 |
|
Acquisition payable |
|
|
- |
|
|
|
4,747,250 |
|
Customer deposits |
|
|
75,570 |
|
|
|
80,306 |
|
Taxes payable |
|
|
1,329,366 |
|
|
|
907,472 |
|
Current portion of warrants
liability |
|
|
- |
|
|
|
289,481 |
|
Total current liabilities |
|
|
45,167,671 |
|
|
|
55,806,178 |
|
|
|
|
|
|
|
|
|
|
LONG TERM
LIABILITIES |
|
|
|
|
|
|
|
|
Warrants liability |
|
|
111,094 |
|
|
|
2,626,168 |
|
Total long term liabilities |
|
|
111,094 |
|
|
|
2,626,168 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
45,278,765 |
|
|
|
58,432,346 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value,
100,000,000 shares authorized, 23,960,217 shares issued and
outstanding as of December 31 and June 30, 2015, respectively |
|
|
23,960 |
|
|
|
23,960 |
|
Additional paid-in capital |
|
|
6,846,397 |
|
|
|
6,846,397 |
|
Statutory reserves |
|
|
3,689,941 |
|
|
|
3,689,941 |
|
Retained earnings |
|
|
61,850,183 |
|
|
|
108,831,633 |
|
Accumulated other comprehensive
income |
|
|
4,479,103 |
|
|
|
11,484,613 |
|
Total Hongli Clean Energy
Technologies Corp.'s equity |
|
|
76,889,584 |
|
|
|
130,876,544 |
|
|
|
|
|
|
|
|
|
|
NONCONTROLLING
INTERESTS |
|
|
4,331,600 |
|
|
|
4,331,600 |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
81,221,184 |
|
|
|
135,208,144 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
126,499,949 |
|
|
$ |
193,640,490 |
|
|
|
|
|
|
|
|
|
|
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME(UNAUDITED)
|
|
For the Three Months Ended December 31, |
|
|
For the Six Months Ended December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
$ |
5,364,361 |
|
|
$ |
12,677,319 |
|
|
$ |
11,806,599 |
|
|
$ |
26,251,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
|
3,181,705 |
|
|
|
9,989,469 |
|
|
|
7,519,026 |
|
|
|
21,281,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
2,182,656 |
|
|
|
2,687,850 |
|
|
|
4,287,573 |
|
|
|
4,969,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling |
|
|
6,272 |
|
|
|
35,091 |
|
|
|
31,938 |
|
|
|
69,255 |
|
General and administrative |
|
|
49,422,945 |
|
|
|
2,129,454 |
|
|
|
50,583,244 |
|
|
|
3,017,249 |
|
Total operating expenses |
|
|
49,429,217 |
|
|
|
2,164,545 |
|
|
|
50,615,182 |
|
|
|
3,086,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
|
(47,246,561 |
) |
|
|
523,305 |
|
|
|
(46,327,609 |
) |
|
|
1,882,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
25 |
|
|
|
62,856 |
|
|
|
57 |
|
|
|
165,107 |
|
Interest expense |
|
|
(1,255,062 |
) |
|
|
(1,502,341 |
) |
|
|
(2,532,043 |
) |
|
|
(2,999,554 |
) |
Other finance expense |
|
|
(59,900 |
) |
|
|
(51,236 |
) |
|
|
(64,845 |
) |
|
|
(51,899 |
) |
Other income, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Change in fair value of
warrants |
|
|
269,143 |
|
|
|
5,452,865 |
|
|
|
2,804,555 |
|
|
|
3,425,703 |
|
Total other income (expense),
net |
|
|
(1,045,794 |
) |
|
|
3,962,144 |
|
|
|
207,724 |
|
|
|
539,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSSES) BEFORE
INCOME TAXES |
|
|
(48,292,355 |
) |
|
|
4,485,449 |
|
|
|
(46,119,885 |
) |
|
|
2,422,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES |
|
|
397,057 |
|
|
|
503,591 |
|
|
|
861,565 |
|
|
|
993,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
|
(48,689,412 |
) |
|
|
3,981,858 |
|
|
|
(46,981,450 |
) |
|
|
1,428,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
|
(1,593,614 |
) |
|
|
175,539 |
|
|
|
(7,005,510 |
) |
|
|
170,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
|
$ |
(50,283,026 |
) |
|
$ |
4,157,397 |
|
|
$ |
(53,986,960 |
) |
|
$ |
1,599,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
23,960,217 |
|
|
|
23,960,217 |
|
|
|
23,960,217 |
|
|
|
22,642,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSSES) PER
SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(2.03 |
) |
|
$ |
0.17 |
|
|
$ |
(1.96 |
) |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
|
|
For the Six Months Ended December 31, |
|
|
|
2015 |
|
|
2014 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(46,981,450 |
) |
|
$ |
1,428,601 |
|
Adjustments to reconcile net income
(loss) to cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
787,571 |
|
|
|
652,208 |
|
Amortization and depletion |
|
|
370,835 |
|
|
|
35,408 |
|
Impairment loss on intangible
assets |
|
|
19,489,408 |
|
|
|
- |
|
Impairment loss on equipment |
|
|
2,094,259 |
|
|
|
- |
|
Impairment loss of CIP |
|
|
23,820,387 |
|
|
|
- |
|
Loss from inventories LCM |
|
|
1,870,436 |
|
|
|
- |
|
Bad debt expense |
|
|
1,731,583 |
|
|
|
1,549,034 |
|
Change in fair value of
warrants |
|
|
(2,804,555 |
) |
|
|
(3,425,703 |
) |
Amortization of prepaid
expenses |
|
|
16,670 |
|
|
|
33,332 |
|
Change in operating assets and
liabilities |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(1,047,699 |
) |
|
|
(9,093,126 |
) |
Other receivables |
|
|
4,752,481 |
|
|
|
(135,855 |
) |
Inventories |
|
|
(607,144 |
) |
|
|
5,035,275 |
|
Advances to suppliers |
|
|
3,972,159 |
|
|
|
(1,106,222 |
) |
Prepaid expenses |
|
|
- |
|
|
|
(5,000 |
) |
Accounts payable, trade |
|
|
333,209 |
|
|
|
(2,975,332 |
) |
Other payables and accrued
liabilities |
|
|
(1,504,640 |
) |
|
|
1,778,225 |
|
Taxes payable |
|
|
488,119 |
|
|
|
1,263,983 |
|
Net cash provided by (used in)
operating activities |
|
|
6,781,629 |
|
|
|
(4,965,172 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Collection of loans receivable |
|
|
- |
|
|
|
4,500,000 |
|
Increase of loans receivable |
|
|
- |
|
|
|
(200,000 |
) |
Payments of gasification
equipment |
|
|
- |
|
|
|
(14,497,925 |
) |
Payments of coal mine
acquisition |
|
|
(4,586,576 |
) |
|
|
- |
|
Net cash provided by (used in)
investing activities |
|
|
(4,586,576 |
) |
|
|
(10,197,925 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from short-term loans -
CPL |
|
|
1,638,416 |
|
|
|
- |
|
Repayment of short-term loans -
CPL |
|
|
(3,601,712 |
) |
|
|
- |
|
Proceeds from issuance of common
stock |
|
|
- |
|
|
|
13,204,538 |
|
Proceeds from (payment to) related
parties |
|
|
(205,250 |
) |
|
|
2,019,836 |
|
Net cash provided by (used in)
financing activities |
|
|
(2,168,546 |
) |
|
|
15,224,374 |
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE
ON CASH |
|
|
(61,280 |
) |
|
|
63,698 |
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN
CASH |
|
|
(34,773 |
) |
|
|
124,975 |
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
period |
|
|
81,605 |
|
|
|
191,992 |
|
|
|
|
|
|
|
|
|
|
CASH, end of
period |
|
$ |
46,832 |
|
|
$ |
316,967 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for income tax |
|
$ |
772,264 |
|
|
$ |
827,448 |
|
Cash paid for interest expense, net
of capitalized interest |
|
$ |
4,113,540 |
|
|
$ |
2,127,570 |
|
|
|
|
|
|
|
|
|
|
NON-CASH TRANSACTIONS
OF INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Common stock issued for a service
fee |
|
$ |
- |
|
|
$ |
100,000 |
|
Issuance of warrants related to the
sale of common stock |
|
$ |
- |
|
|
$ |
10,048,116 |
|
Transfer of construction in
progress into plant and equipment |
|
$ |
6,331,704 |
|
|
$ |
7,987,721 |
|
|
|
|
|
|
|
|
|
|
Company Contact:
Song Lv, CFO
Phone: + 86-375-2882-999
Email: lvsong@sinocoking.net
Website: http://www.cetcchina.net/
Hongli Clean Energy (NASDAQ:CETC)
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Hongli Clean Energy (NASDAQ:CETC)
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De Jun 2023 a Jun 2024