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UNAUDITED CONSOLIDATED INCOME STATEMENTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2017
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS) FOR THE THIRD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2017
Review of Performance
Review of the Group's Performance for the third quarter ended 30 September 2017 ("3Q2017") as compared to that of the third quarter ended 30 September 2016 ("3Q2016")
Revenue recorded increase of approximately 15.77% or RMB76.96 million in 3Q2017, mainly due to increase of sales price of LPG from 2,561 per tonne in 3Q2016 to 3,101 per tonne in 3Q2017 despite the drop of average sale volume of LPG from 196,165 tons in 3Q2016 to 180,165 tons in 3Q2017.
Cost of sales
Cost of sales increase by 17.85% or RMB 82.21 million in 3Q2017 due to the increase the price of raw material by 15.04% .or RMB 66.36 million.
Gross profit decreased by RMB5.22 million or 19.04% in 3Q2017 as compared to 3Q2016. Correspondingly, gross profit margin decreased from 5.62% to 3.93% mainly due to the fluctuation of LPG purchase price which was more volatile in 3Q2017 as compared to 3Q2016. On top of that the arrangement of sales and purchase in terms of timing and quantity became more challenging for the management.
Other operating income
Other operating income increased by RMB 7.284 million mainly due to the increase of foreign exchange gain
Operating expenses decreased due mainly to:
Selling and distribution expenses decreased by approximately RMB6.81million or 42.25% mainly due to decrease in the land freight of RMB6.95 million , decrease in the tugboat charges of RMB1.86 million
Administrative expenses decreased by RMB0.672 million or 12.92% mainly due to decrease in the salary and the port fee
Finance costs decreased by approximately RMB0.522 million or 13.31% mainly due to decrease in bank loan interest and the average loan amounts.
Profit attributable to equity holders
As a result of the above, net profit attributable to equity holders recorded RMB11.22 million in 3Q2017
Review of the Group’s Financial Position as at 30 September 2017 and the Group’s Financial Position as at 31 December 2016
Current assets increased by approximately RMB42.94 or 9.69% from RMB443 million in December 2016 to RMB486 million as at 30 September 2017. This is mainly due to increase in trade and other receivables of RMB174.43 million, increase in due from related parties of 18.96 million ,partly offset by the decrease in Inventories of RMB 113.36 million, investment of RMB 11.62 million and Cash and cash equivalents of RMB10.26 million
Current liabilities increased by approximately RMB14.36 million or 2.99% from RMB479.55 million as at 31 December 2016 to RMB493.91million as at September 2017. This is mainly due to decrease in the trade and other payables of RMB102.79 million and increase of the due to a related party of RMB95.04 million
Review of the Group’s Cash Flow Statements for 3Q2017
The Group’s net cash generated before operating working capital changes amounted to approximately RMB18.1 million mainly due to the profit before income tax of RMB11.28 million and after adding non-cash items and net interest amounting to RMB6.8 million. Net cash used in working capital amounted to RMB62.4 million mainly due to decrease in the inventories of RMB116.66 million and increase in due to related party of RMB99.5 million and offset by increase in trade and other payables of RMB102.27 million, increase in the amounts due from related parties of RMB19.5 million and increase in trade and other receivables of RMB155 million. Net cash used in operating activities amounted RMB44.4 million after decrease in net interest paid of RMB3.4 million and increase in income tax payables of RMB3.29 million.
Net cash used in investing activities amounted to RMB1.06 million due to the disposal of property, plant and equipment of RMB1,4 million and increase in investment of RMB2.49 million.
Net cash generated from financing activities amounted to RMB72.34 million mainly due to the increase of bank borrowings RMB60.03million and decrease in pledged deposit of RMB12.3 million.
The global market and economic growth in the following months until end of 2017 and the next year will still be full of uncertainties and challenges. Going forward, over the next 12 months, the international oil prices are likely to remain volatile. The price of the liquid petroleum gas increased compared to liquid natural gas which made the local customers reduced the use of the liquid petroleum gas. However, the lower economic growth rate for China and weaker RMB are likely to change better. The company would to be prudent in managing our business risks, controlling our operating costs and will take advantage of all opportunities going forward to cope with all our challenges and strive to enlarge market in the rural areas and enhanced our profitability as soon as possible.