Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.
UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2018
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 31 MARCH 2018
Review of Performance
Review of the Group’s Performance for the first quarter ended 31 March 2018 ("1Q2018") as compared to that of the first quarter ended 31 March 2017 ("1Q2017")
Revenue increased by approximately 2.4% or RMB 14.79 million, mainly due to the increase in the sales volume of liquified petroleum gas (“LPG”) from 165,194 tonnes 1Q2017 to 169,410 tonnes in 1Q2018. This is partially offset by the drop of average sale price of LPG from RMB 3,703 per tonne in 1Q2017 to RMB 3,698 per tonne in 1Q2018. Price competitiveness of LPG as compared to substitute products contributed to the increase of local demand during the period.
Gross profit decreased by RMB 43.47 million or 82.9% as compared to 1Q2017 due to the decrease in the margin and change in margin mix, domestic volume increase by 17% (165,124 tonnes vs corresponding period of 140,724 tonnes) whilst export volume down by 82% (4,286 tonnes vs corresponding period of 24,470 tonnes) as result of canceling a non-profitable long term contract with an export customer. Correspondingly, gross profit margin decreased from 8.6% in 1Q2017 to 1.43% in 1Q2018.
Other operating income
Other operating income increased by RMB 8.8 million or 489.2% as compared to 1Q2017, mainly due to the increase in the foreign exchange gain of RMB 9.25 million.
Operating expenses decreased by RMB 5.2 million or 29.7% mainly due to the following:
Finance costs decreased by approximately RMB 2.5 million or 57.9% mainly due to a decrease in interest expenses by RMB 2.9 million, which was driven by the decrease in average loans from banks.
Review of the Group's Financial Position as at 31 March 2018 and the Group's Financial Position as at 31 December 2017
Current assets decreased by approximately RMB 110.5 million or 27.2% from RMB 405.7 million as at 31 December 2017 to RMB 295.2 million as at 31 March 2018. This is mainly due to a decrease in inventories of RMB 29.8 million, decrease in cash and cash equivalents of RMB 57.8 million and the decrease in trade and other receivables of RMB 21.1 million, and partially offset by increase in due from related parties of RMB 16.2 million.
Current liabilities decreased by approximately RMB 99.5 million or 29.6% from RMB 335.1 million as at 31 December 2017 to RMB 235.7 million as at 31 March 2018. This is mainly due to decrease in the trade and other payables of RMB 157.7 million, partially offset by an increase in short term borrowings of RMB 60.5 million.
Review of the Group's Cash Flow Statements for 1Q2018
Net cash outflow generated from operating activities amounted to approximately RMB 118.7 million. This is mainly due to the profit before income tax of RMB 4.0 million, after adding non-cash items of RMB 3.6 million, offset by the net cash outflows of working capital of RMB 126.39 million and net interest payment of RMB 1.4 million.
Net cash outflows from working capital mainly caused by a decrease in trade and other payables (excluding interest payables) of RMB 157.7 million, and the decrease due from/to related parties of RMB 16.2 million, partially offset by a decrease in the trade and other receivables (excluding interest receivables) of RMB 21.1 million and a decrease in the inventories of RMB 29.8 million.
Net cash outflow generated from investing activities amounted to RMB 0.2 million due to purchase of fixed assets of RMB 0.4 million, which was offset by disposal of investment 0.6million.
Net cash generated from financing activities amounted to RMB 59.7 million mainly due to increase in short term borrowing of RMB 60 million, decrease in fixed deposit RMB 18.7 million and partially offset by repayment of long term bank borrowings RMB 19.5 million.
International oil price has risen substantially recently and is likely to remain high as the OPEC countries continue to stick to their production quotas to boost oil prices and also the geopolitical tensions in the Middle East. In addition, trade tensions are also likely to have some impact on the China economy and the RMB will likely be weaker following recent trends. The global economy remains healthy although the growth rate may be slower. The Group is keeping close watch over these market and global trends in managing its business risks, particularly bearing in mind its less favourable performance in 1Q2018. Over the next 12 months and for 2Q2018, the Group is cautiously optimistic that it can cope with these challenges ahead and will remain prudent in controlling its operating costs to improve its performance.