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BEIJING , Sept. 29, 2022 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. ( Nasdaq: FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China , today announced its unaudited financial results for the second quarter of 2022 ended June 30 , 2022.
First Six Months 2022 Financial Highlights
Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "We saw positive overall sales trends, particularly in specialty films, such as a base film for dry film, which accounted for 73.1% of total revenue. The increase in base film sales demonstrates that our customers value the high quality of our products, and we believe it has helped the company's financial performance. At Fuwei Films, we prioritize innovation and utilize a distinct marketing approach while expanding future end-user markets for our film goods. Through these efforts, we anticipate that the Company will continue capitalizing on new opportunities despite difficult market and economic conditions."
Net sales during the second quarter ended June 30, 2022 , were RMB88.7 million (US$13.2 million ), compared to RMB100.6 million during the same period in 2021, representing a year-over-year decrease of RMB11.9 million , or 11.8% on an annual base. The average sales price decline contributed to a RMB3.6 million year-over-year decrease while lower sales volume represented a decline of RMB8.3 million .
Sales of specialty films in the second quarter of 2022 were RMB64.9 million (US$9.7 million ), or 73.1% of total revenues, compared to RMB69.0 million , or 68.6% in the same period of 2021, representing a decrease of RMB4.1 million , or 5.9%. The decline in sales volume resulted in a reduction of RMB2.0 million , while a lower average sales price caused a decrease of RMB2.1 million .
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
Three-Month Period Ended June 30, 2022
Base film for other applications
Overseas sales totaled RMB9.4 million , or US$1.4 million , equivalent to10.6% of total revenues, compared with RMB13.4 million , or 13.3% of total revenues in the second quarter of 2021. Higher average sales price represented an increase of RMB0.6 million , while the sales volume decline resulted in a decrease of RMB4.6 million .
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
Three-Month Period Ended June 30, 2022
Gross profit was RMB24.9 million (US$3.7 million ) for the second quarter ended June 30, 2022 , representing a gross profit margin of 28.1%, compared to a gross profit margin of 39.6% for the same period in 2021.
Operating expenses for the second quarter ended June 30, 2022 , amounted to RMB14.1 million (US$2.1 million ) compared to RMB14.0 million in the same 2021 period.
Net profit attributable to the Company during the second quarter ended June 30, 2022 , totaled RMB13.7 million (US$2.0 million ), while net profit attributable to the Company was RMB19.8 million during the same period in 2021.
Basic and diluted net profit per share was RMB4.20 (US$0.63) and RMB6.06 for the three-month period ended June 30, 2022 , and 2021, respectively.
Total shareholders' equity was RMB347.8 million , or US$51.9 million , as of June 30, 2022 , compared with RMB317.0 million as of December 31, 2021 .
As of June 30, 2022 , the Company had 3,265,837 basic and diluted ordinary shares outstanding.
Financial Results for the Six Months Ended June 30, 2022
Net sales during the six-month period ended June 30 , 2022, were RMB191.9 million (US$28.6 million ), compared to RMB202.2 million in the same period in 2021, representing a 5.1% decrease, or RMB10.3 million . The average sales price decline represented a decrease of RMB3.7 million , while lower sales volume resulted in a decrease of RMB6.6 million .
In the six-month period ended June 30, 2022, sales of specialty films totaled RMB136.8 million (US$20.4 million ), or 71.3% of our total revenues, compared to RMB133.9 million , or 66.2% in the same period of 2021. Specialty films sales rose RMB2.9 million , or 2.2%, compared to the same period in 2021. The increase in sales volume amounted to RMB4.9 million , while lower average sales price caused a decrease of RMB2.0 million .
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
Six-Month Period Ended June 30, 2022
Base film for other applications
Overseas sales during the six months ended June 30 , 2022, were RMB19.6 million , or US$2.9 million , equivalent to 10.2% of total revenues, compared with RMB22.4 million , or 11.1% of total revenues in the same period in 2021. Overseas sales declined RMB2.8 million from the same 2021 period. Lower sales volume explained the RMB4.2 million decrease, while a higher average sales price contributed to an increase of RMB1.4 million .
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
Six-Month Period Ended June 30, 2022
Our gross profit totaled RMB55.1 million (US$8.2 million ) for the first six months ended June 30, 2022 , representing a gross margin of 28.7%, compared to a gross margin of 40.7% for the same period in 2021, a 12% decrease in the period. Our average product sales prices fell 1.9% from the same period last year, while the average cost of goods sold rose 18.0% compared to last year, resulting in a decrease in our gross margin.
Operating expenses for the six months ended June 30, 2022 , were RMB27.8 million (US$4.2 million ), compared to RMB24.4 million in the same period in 2021, equal to RMB3.4 million , or 13.9% higher than the same period in 2021. This increase was mainly explained by higher expenses on R&D and welfare.
Net income attributable to the Company during the first half of 2022 was RMB30.8 million (US$4.6 million ) compared to net income attributable to the Company of RMB51.2 million during the same period in 2021, a RMB20.4 million decrease from the same period in 2021 explained by the factors described above.
Cash, cash equivalent and restricted cash totaled RMB265.2million (US$39.6 million ) as of June 30, 2022 . Total shareholders' equity was RMB347.8 million (US$51.9 million ).
As of June 30, 2022 , the Company had 3,265,837 basic and diluted total ordinary shares outstanding.
Fuwei Films conducts its business through its wholly-owned subsidiary, Fuwei Films (Shandong ) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei develops, manufactures, and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used for packaging food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include negative impacts of the determination of the U.S. Securities and Exchange Commission that the Public Company Accounting Oversight Board ("PCAOB") is currently unable to inspect our auditor in relation to their audit work and the potential that our ordinary shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act ("HFCAA") in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China , or 2023 if proposed changes to the law are enacted, the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the uncertainty of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China ") conducted by certain countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, potential delisting of our ordinary shares under the Holding Foreign Company Affordable Act if the US Public Company Accounting Oversight Board is unable to inspect our auditors located in China , uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from the information contained in the forward-looking statements as a result of the risk factors.
For more information, please contact:
Ms. Xiaoli Yu Investor Relations Officer Phone: +86-133-615-59266 Email: [email protected]
Lucia Domville Investor Relations Grayling Phone: +1-646-824-2856 Email: [email protected]
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
AS OF JUNE 30, 2022, AND DECEMBER 31, 2021
(amounts in thousands except share and per share value)
Accounts and bills receivable, net
Deferred tax assets - current
Property, plant and equipment, net
Registered capital (of US$0.519008 par value; 135,000,000 shares authorized; 3,265,837 issued and outstanding)
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021
(amounts in thousands except share and per share value)
The Three-Month Period Ended June 30,
The Six-Month Period Ended June 30,
Income before provision for income taxes
Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to the Company
- Foreign currency translation adjustments attributable to non-controlling interest
- Foreign currency translation adjustments attributable to the Company
Comprehensive loss attributable to non-controlling interest
Comprehensive income attributable to the Company
Earnings per share, Basic and diluted
Weighted average number of ordinary shares, Basic and diluted
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021
(amounts in thousands except share and per share value)
The Six-Month Period Ended June 30,
Cash flow from operating activities
Adjustments to reconcile net loss to net cash
- Depreciation of property, plant and equipment
Changes in operating assets and liabilities
- Prepaid expenses and other current assets
- Accrued expenses and other payables
Net cash provided by (used in) operating activities
Cash flow from investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Advanced to suppliers - non-current
Amount change in construction in progress
Net cash provided by (used in) investing activities
Cash flow from financing activities
Principal payments of bank loans
Proceeds from (payment to) short-term bank loans
Proceeds from (payment to) related party
Net cash (used in) provided by financing activities
Effect of foreign exchange rate changes
Net increase in cash and cash equivalent
At beginning of the period
At end of the period
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:
Account payable for plant and equipment:
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