Full Year Financial Statement And Dividend Announcement

Transcription

1 Full Year Financial Statement And Dividend Announcement PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year Actual Proforma Full year ended 31 December Full year ended 31 December 2004 % change RMB 000 RMB / (-) Revenue 240, , % Cost of sales (175,721) (130,546) 34.60% Gross profit 65,210 70,160 (7.06)% Other operating income (1) 3,254 1, % Administrative expenses (25,554) (13,216) 93.36% Research expenses (3,055) (2,457) 24.34% Selling and distribution expenses (18,457) (11,316) 63.11% Other operating expenses (113) (81) 39.51% Profit from operations 21,285 44,195 (51.84)% Finance cost (1,268) (394) % Profit before income tax 20,017 43,801 (54.30)% Income tax expense - (311) nm Profit after income tax 20,017 43,490 (53.97)% Attributable to: Equity holders of the Company 18,602 41,608 Minority interests 1,415 1,882 20,017 43,490 nm- not meaningful 1

2 Explanatory Notes: (i) (ii) The Company was incorporated in Bermuda on 28 April 2004 and the was formed as a result of the Restructuring Exercise as described in the prospectus of the Company dated 8 March (the Prospectus ). Other information: Actual Proforma Full year ended 31 December Full year ended 31 December 2004 % change RMB 000 RMB / (-) Depreciation expense 2,674 1, % Amortisation of land use rights % Amortisation of trademark % Impairment of trademark nm Impairment allowance on trade receivables 1,018 - nm Impairment allowance on inventories nm Loss (Gain) on disposal of property, plant and equipment 4 (24) % Notes: 1. Other operating income comprises: Actual Proforma Full year ended 31 December Full year ended 31 December 2004 % change RMB 000 RMB / (-) Government grant 2, % Sale of scrap materials 83 - nm Service income nm Interest income % Gain on disposal of property, plant and - 24 nm equipment Others % Total 3,254 1, % 2

3 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year < < Company December 31 December December 31 December 2004 RMB 000 RMB 000 RMB 000 RMB 000 Current assets: Cash and bank balances 33,712 17,318 1, Pledged cash deposits 26, Trade receivables 123,501 60, Other receivables and prepayments 39,462 12, ,882 Inventories 29,599 10, Land use rights Total current assets 252, ,887 1,642 6,534 Non-current assets: Land use rights 4,411 4, Property, plant and equipment 29,062 12, Investment in subsidiaries ,019 17,685 Trademark 2,486 2, Total non-current assets 35,959 19,570 58,019 17,685 Total assets 288, ,457 59,661 24,219 Current liabilities: Trade payables 103,153 33, Other payables 12,151 11,370 3,879 2,217 Short term bank loans 45,000 6, Convertible loans - 20,736-20,736 Total current liabilites 160,304 71,118 3,879 22,953 Capital and reserves: Issued capital 27,230 2,488 27,230 2,488 Share premium 35,275-35,275 - General reserves 8,589 6, Currency translation deficit (239) (38) (1,484) - Accumulated profits (losses) 51,112 34,791 (5,239) (1,222) Attributable to the equity holders of the Company 121,967 43,549 55,782 1,266 Minority interests 6,612 5, Total equity 128,579 49,339 55,782 1,266 Total liabilities and equity 288, ,457 59,661 24,219 3

4 (b)(ii) Aggregate amount of group borrowings and debt securities Amount payable in one year or less, or on demand As at 31 December As at 31 December 2004 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB 000 Bank loans - 45,000-6,000 Convertible loans ,736 For details of the convertible loans, please refer to pages 71 and 72 of the Prospectus dated 8 March. Amount payable after one year As at 31 December As at 31 December 2004 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB Details of any collateral There are three new bank loans as at 31 December : (i) Bank loans amounting to RMB31 million are guaranteed jointly by a related party and another subsidiary. (ii) Bank loans amounting to RMB8 million are guaranteed by another subsidiary. (iii) Bank loans amounting to RMB6 million are guaranteed jointly by a director of the Company and another subsidiary. As at 31 December 2004, the bank loan of RMB6 million was guaranteed by another subsidiary. 4

5 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year Actual Proforma (1) Full year ended 31 December Full year ended 31 December 2004 RMB 000 RMB 000 Cash flows from operating activities: Profit before income tax 20,017 43,801 Adjustments for: Depreciation expense 2,674 1,657 Amortisation of land use rights Amortisation of trademark Impairment allowance on trade receivables 1,018 - Impairment allowance on inventories Impairment of trademark Loss (Gain) on disposal of property, plant and equipment 4 (24) Interest expense 1, Interest income (138) (25) Operating profit before working capital changes 25,535 46,315 Trade receivables (63,769) (32,083) Other receivables and prepayments (27,016) 14,068 Inventories (19,626) 23,261 Trade payables 70,141 (27,708) Other payables 847 9,170 Cash (used in) from operations (13,888) 33,023 Interest received Interest paid (1,334) (329) Income tax not transferred under - (311) Restructuring Exercise Net cash (used in) generated from operating activities (15,084) 32,408 Cash flows from investing activities: Purchase of property, plant and equipment (19,486) (7,134) Acquisition of assets and undertakings pursuant to Sunpower and - (33,386) Shengnuo Undertakings Proceeds from disposal of property, plant and equipment - 72 Net cash used in investing activities (19,486) (40,448) Cash flows from financing activities: Proceeds from (Repayment of) in short term loans 39,000 (2,047) Increase in convertible loans - 20,736 Proceeds from paid-up capital, net of issue expense 39,326 2,488 Pledged bank deposits (26,523) - (Payment to) Contribution from minority interest (593) 3,908 Pro forma adjustments Net cash from financing activities 51,210 25,396 Net currency translation effect from consolidation of subsidiaries (246) (38) Net increase in cash 16,394 17,318 Cash and bank balances at beginning of year 17,318 - Cash and bank balances at end of year 33,712 17,318 Explanatory Note: (1) For the purpose of this announcement, the comparative proforma cash flow statement of the for the year ended 31 December 2004 have been prepared on the assumption that the structure arising from the Restructuring Exercise as described in the Prospectus had been in place throughout the period since 1 January of the relevant financial year. 5

6 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year Issued capital Share premium General reserves Currency translation deficit Accumulated profits Attributable to the equity holders of the Company Minority interests Total Equity RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance as at 28 April 2004 (Date of incorporation) Capital paid up 2, ,488-2,488 Currency translation deficit (38) - (38) - (38) Transfer - - 6,308 - (6,308) Profit for the period ,099 41,099 5,790 46,889 Balance as at 31 December ,488-6,308 (38) 34,791 43,549 5,790 49,339 Balance as at 1 January 2,488-6,308 (38) 34,791 43,549 5,790 49,339 Issue of shares: Conversion of convertible loans , ,691-20,691 Bonus issue 20,346 (20,346) Initial public offering 4,051 49, ,940-53,940 Share issue expenses - (14,614) (14,614) - (14,614) Payment to minority shareholders (593) (593) Currency translation (201) - (201) - (201) Transfer - - 2,281 - (2,281) Profit for the year ,602 18,602 1,415 20,017 Balance as at 31 December 27,230 35,275 8,589 (239) 51, ,967 6, ,579 6

7 Company Balance as at 28 April 2004 (Date of incorporation) Issued capital Share premium Currency translation deficit Accumulated losses Total RMB'000 RMB'000 RMB'000 RMB'000 RMB' Capital paid up 2, ,488 Profit for the period (1,222) (1,222) Balance as at 31 December , (1,222) 1,266 Balance as at 1 January 2, (1,222) 1,266 Issue of shares: Conversion of convertible loans , ,691 Bonus issue 20,346 (20,346) Initial public offering 4,051 49, ,940 Share issue expenses - (14,614) - - (14,614) Currency translation - - (1,484) - (1,484) Loss for the year (4,017) (4,017) Balance as at 31 December 27,230 35,275 (1,484) (5,239) 55,782 7

8 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year Date Purpose of issue Par value (US$) Issue Price / Consideration Number of shares Resultant issued and paid-up share capital (US$) Issued and paid-up share capital as at incorporation 27 July 2004 Issued and paid-up ordinary shares of US$1.00 each pursuant to the Founding Shareholders Conversion 23 July 2004 Credited as fully paid-up pursuant to the Founding Shareholders Conversion, the 12,000 ordinary shares of US$1.00 each 27 July 2004 Issued and paid-up ordinary shares of US$1.00 each pursuant to the Pre-IPO Investors Conversion , US$288, , , US$12,000 12, , US$2,500,000 41, ,693 2 February Share Split ,169, ,693 2 February Bonus Issue ,830,700 2,800,000 Resultant Issued and paid-up share capital ,000,000 2,800,000 Pursuant to the Company s Initial Public Offering, 49,000,000 new Ordinay shares and 64,165,000 vendor shares were offered at an issue price of S$0.22 each. The net proceeds attributable to the Company (after deducting the share of issue expenses) arising from the issue of the new shares were approximately RMB39.3 million. The Company was admitted to the Official List of the SGX-ST Dealing and Automated Quotation System ( SGX-Sesdaq ) on 16 March. 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The figures have neither been reviewed nor audited. 8

9 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter) Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer most recently audited annual financial statements have been applied The and the Company have adopted all the applicable new/revised FRS and Interpretations of Financial Reporting Standards ( INT FRS ) issued by the Council on Corporate Disclosure and Governance that are relevant to its operations and effective for annual periods beginning on January 1,. The adoption of the new/revised FRS and INT FRS has no material effect on the financial statements for the current or prior periods. 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of the change Not applicable. 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends Actual Full year ended 31 December Proforma Full year ended 31 December 2004 Earnings per share (EPS) (RMB cents) 5.83 (1) (1) Note: (1) Basic earnings per share was calculated on the s profit for the financial year attributable to shareholders of approximately RMB18.6 million based on the weighted average issued share capital of 318,931,507 ordinary shares of US$0.01 each. (FY2004: approximately RMB41.6 million based on the pre-invitation share capital of 280,000,000 ordinary shares of US$0.01 each.) 9

10 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year < As at As at 31 December 31 December 2004 < Company As at As at 31 December 31 December 2004 Net tangible asset value per share (RMB cents) (1) (2) (1) 7.86 (2) Notes: (1) NTA per share for 31 December has been computed based on shareholders equity as at this date and the post-invitation share capital of 329,000,000 Shares. (2) NTA per share for 31 December 2004 has been computed based on shareholders equity as at this date and as adjusted for the conversion of the convertible loans of US$2,500,000 (equivalent to RMB20,736,000), and the pre-invitation share capital of 280,000,000 Shares. 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on FY actual compared to FY2004 Proforma Revenue The s revenue increased by approximately RMB40.2 million from RMB200.7 million in FY2004 to RMB240.9 million in FY, representing a 20.0% growth. The growth was attributed to revenue increase of approximately RMB27.5 million for Heat Pipes and Heat Pipe Exchangers segment, and RMB32.0 million for Pressure Vessels segment. The increase was partially offset by the decline in revenue for Pipe Supports segment of approximately RMB16.7 million. The Heat Pipes and Heat Pipe Exchangers segment remains as our top revenue generator contributing to 42.3% of our s revenue due mainly to new customers acquired with the expansion of our market share. The expansion in production capacity and the introduction of Special Materials Pressure Vessels product have led to an improvement in our revenue contribution. During the year, there were fewer pipe supports contracts completed due to delay in customers projects which affected the revenue contribution in FY. Profitability Profit before taxation The posted a profit before tax of RMB20.0 million for FY, representing a decline of RMB 23.8 million or 54.3% over that achieved for FY2004 of approximately RMB43.8 million. This was largely due to the following reasons: a) The gross profit margin had decreased from 35.0% in FY2004 to 27.1% in FY. This was due largely to lower profit margins achieved for the Heat Pipes and Heat Pipe Exchangers segment which resulted from our competitive pricing strategy to expand market share. 10

11 b) An increase in operating expenses from approximately RMB27.1 million in FY2004 to approximately RMB47.2 million due largely to the increase in administrative expenses which included staff payroll, rental and listing compliance expenses. Research expenses increased by RMB0.6 million due primarily to research work conducted and increase in research staff salaries. Selling & distribution expenses increased by approximately RMB7.1 million due mainly to additional marketing personnel employed and higher business development expenses for the expansion of our market share. Net Profit for the year As a result of the above, net profit for the year dropped by RMB23.5 million or 54.0% to RMB20.0 million in FY from RMB43.5 million in FY2004. There is no taxation in FY as the s two PRC subsidiaries are entitled to exemptions from PRC income tax for the two years commencing from the profit-making year of operations, and thereafter, entitled to a 50% relief from PRC income tax for the next three years. This is in accordance with the tax legislations applicable to foreign invested enterprises in PRC. Review of Financial Position The s current assets increased by approximately RMB152.0 million or 150.7% from RMB100.9 million to RMB252.9 million as at 31 December due mainly to the increase in trade receivables of approximately RMB62.7 million, other receivables and prepayments of approximately RMB27.0 million and inventories of approximately RMB19.4 million. Trade receivables increased due mainly to more sales of Heat Pipes and Heat Pipe Exchangers, and Pressure Vessels at year end. The increase in other receivables and prepayments was due to more advances paid to suppliers for production materials, and deposit paid for the land use rights acquired. Inventories increased with more production materials purchased and work-in-progress. The increase in cash and bank balances of approximately RMB42.9 million was largely due to IPO proceeds of RMB39.3 million (less share issue expenses) raised. Approximately RMB26.5 million of the bank balance was pledged for opening letter of credit accounts for payment to overseas suppliers. The s non-current assets increased by approximately RMB16.4 million or 83.7% from RMB 19.6 million to RMB36.0 million as at 31 December due mainly to the acquisition of machinery and equipment for both the production facilities and the new office premises. Current liabilities amounted to RMB160.3 million as at 31 December, reflecting an increase of RMB89.2 million or 125.4%. This was mainly brought about by the increase in trade payables and short term bank loans of approximately RMB70.1 million and RMB39.0 million respectively, partially offset by the conversion of the Investors Convertible Loan to equity of RMB20.7 million. Trade payables increased due mainly to increase in customer advances and the additional short term loans are obtained to finance the working capital requirements of our expanded manufacturing facilities. The s cash used in operating activities amounted to RMB15.1 million due primarily to cash outflows arising from the increase in trade receivables, other receivables and prepayments and inventories. Investing activities utilised cash of RMB19.5 million for acquiring fixed assets. Net cash generated from financing activities related largely to net proceeds raised from the listing of the Company in March amounting to RMB39.3 million and additional short term loans of approximately RMB39.0 million which was offset by the pledged bank deposits of approximately RMB26.5 million. Overall, cash and cash equivalents increased by RMB16.4 million, resulting in a cash balance of RMB33.7 million at year end. 11

12 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results The Company issued two profit guidance during the year. The first profit guidance was announced on 2 August for the half-year ended 30 June. It stated the revenue and profits for 1H will be lower than those in 1H2004. It was also mentioned that the expects its overall performance to improve in the second half of. The Company issued the second profit guidance for the full year ended 31 December ( FY ) on 12 December stating that the profits for FY would be lower than that achieved in FY2004. Please refer to the profit guidance announcement for details. The actual results for FY, as reported herein did not vary significantly from the aforesaid statement. 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months For the year ended 31 December, the : (i) has clinched a RMB32.0 million coal liquefaction contract with China Shenhua Coal Liquefaction Corporation ( China Shenhua ) to undertake the design, procurement, manufacture, installation and commission of energy recovery system for China Shenhua ; (ii) has secured a contract amounting to RMB54.5 million with Nantong Cellulose Fibres Co., Ltd ( Nantong ) for the manufacture and supply to Nantong of special material pressure vessels scheduled for delivery in 2006; and (iii) has clinched total orders worth RMB49.9 million from Guangxi Huiyuan Manganese Industry Co., Ltd. for the manufacture and supply of ripple titanium anode plate facilities. In addition, the has recently secured contracts worth RMB21.4 million in total to supply heat pipes for use in the construction of Qinghai-Tibet railway. Including the above, total orders on hand amounted to approximately RMB251 million. Barring any unforseen circumstances, the above significant contracts are expected to have a positive contribution to the s revenue for the financial year ending 31 December

13 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? None (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? None (c) Date payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/recommended, a statement to that effect No dividend has been declared/recommended 13

14 PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year Actual 31 December Heat pipes and heat pipe exchangers Pipe supports Pressure vessels Waste gas and energy recovery systems Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue 102,032 25,480 98,494 14, ,931 Result: Segment result 4,820 6,121 10,404 3,829 25,174 Unallocated corporate expenses (4,027) Interest income 138 Profit from operations 21,285 Finance cost (250) (187) (722) (109) (1,268) Profit before income tax 20,017 Income tax expense - Profit after income tax 20,017 Other information: Capital expenditure 1,574 2,324 14, ,486 Depreciation expense , ,674 Impairment allowance on: - trade receivables ,018 - inventories Amortisation of trademark Amortisation of land use rights

15 Proforma 31 December 2004 Heat pipes and heat pipe exchangers Pipe supports Pressure vessels Waste gas and energy recovery systems Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue 74,486 42,194 66,521 17, ,706 Result: Segment results 10,044 15,786 11,882 7,399 45,111 Unallocated corporate expenses (952) 44,159 Interest income 36 Profit from operations 44,195 Finance cost (394) Profit before income tax 43,801 Income tax expense - (97) (165) (49) (311) Profit after income tax 43,490 Other information: Capital expenditure 2,439 3,563 1, ,135 Depreciation expense ,657 Amortisation of trademark Amortisation of land use rights Impairment of trademark Breakdown of Past Performance by Geographical Regions In, the s revenue is generated from the PRC. In 2004, other than a sale of RMB3,590,000 to Russia in the second half of 2004, all the sales were effected in PRC. Hence, no geographical segment is applicable. 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments Please refer to Paragraph 8. 15

16 15. A breakdown of sales Actual Proforma 2004 % change RMB 000 RMB / (-) 15(a) Sales reported for the first half year 99, ,492 (1) (0.99)% 15(b) Profit after tax reported for the first half year 15,935 22,768 (1) (30.01)% 15(c) Sales reported for second half year 141, , % 15(d) Profit after tax reported for second half year 4,082 20,722 (80.30)% Note: (1) These figures are presented in the Prospectus dated 8 March. 16. A breakdown of the total annual dividend (in dollar value) for the issuer latest full year and its previous full year Not applicable BY ORDER OF THE BOARD Ma Ming Director 23 February 2006 The listing of the shares of Sunpower Ltd., on the SGX-SESDAQ was sponsored by Stirling Coleman Capital Limited who takes no responsibility for the contents of this announcement. 16