FUZHOU, China, Sept. 23, 2012 /PRNewswire/ -- China Dredging Group Co., Ltd. (together with its consolidated subsidiaries and variable interest entities, "China Dredging," the "Company," "we," "us" and "our"), one of the leading independent (non-state-owned) providers of dredging services in the PRC, today announced its unaudited financial results for the second quarter of 2012.
Six Months Ended June 30, 2012 Highlights
- Revenues of $119.1 million, a 10.9% period-over-period increase
- Gross profit of $63.5?million, a 3.5% period-over-period increase
- Net income of $43.4?million, a 13.1% period-over-period decrease
- Operating cash flow of $47.3 million, a 11.4% period-over-period increase
- Cash of $158.4 million and working capital of $181.5 million as of June 30, 2012
Three Months Ended June 30, 2012 Highlights
- Revenues of $59.6 million, a 4.1% period-over-period increase
- Gross profit of $32.0?million, a 0.8% period-over-period decrease
- Net income of $21.7?million, a 6.7% period-over-period decrease
"I am very pleased that we were able to deliver steady quarterly results in revenue in the first half of 2012," said Mr. Xinrong Zhuo, Chairman and Chief Executive Officer of China Dredging. "We expanded our dredging volume in the first half of 2012 and have taken steps to reconfigure our modern dredging fleet to allow us to continue completing multiple projects simultaneously and to deliver our services more effectively in those projects that require a variety of dredging methods.? We expect to continue to gain recognition and increase our market share in China's dredging industry."
Recent Developments
In July 2012, we did not renew two dredgers lease agreements when the contracts expired, and terminated leasing one dredger in the consideration of its working efficiency. We try to integrate our management and technology for new projects. These three dredgers are not suitable for the new upcoming projects. As a result, we currently have 10 dredgers in our fleet, including 6 non-self-propelling cutter suction dredgers, 2 trailer suction hopper dredgers and 2 grab dredgers.
2012 Second Quarter Operating Results
| For the Three Months Ended | For the Six Months Ended | ||||||
| June 30, | June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Contract Revenue | $ ? ? 59,594,550 | $ ? ?57,224,466 | $ 119,094,081 | $ ?107,355,835 | |||
| Percentage Change | 4.1% | 10.9% | |||||
Contract revenue increased by $2.4 million, or 4.1% (1.7% without foreign exchange effect), to $59.6 million for the three months ended June 30, 2012, compared to $57.2 million for the same period of 2011.? Contract revenue increased by $11.7 million, or 10.9% (7.4% without foreign exchange effect), to $119.1 million for the six months ended June 30, 2012, compared to $107.4 million for the same period of 2011. The increased contract revenue primarily resulted from the increase of our dredging volume and unit construction price, which is a price negotiated with the contractor for each specific project. We completed 32.8 million and 65.2 million cubic meters of dredging volume for the three and six months ended June 30, 2012, respectively, as compared to 31.9 million and 60.4 million cubic meters for the three and six months ended June 30, 2011, representing increases of 2.7% and 8.0%, respectively, in dredging volume. In addition, the unit construction price per cubic meter increased by $0.03, or 1.7% (-1.0% without foreign exchange effect), to $1.82 for the three months ended June 30, 2012 from $1.79 for the same period of 2011, and increased by $0.05, or 2.8% (-0.6% without foreign exchange effect), to $1.83 for the six months ended June 30, 2012 from $1.78 for the same period of 2011.? The increase was primarily due to an increase of demand for our dredging services and general market conditions.?
| For the Three Months Ended | For the Six Months Ended | ||||||
| June 30, | June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Gross Profit | $ ? ? 32,021,439 | $ ? ?32,277,577 | $ ? 63,498,852 | $ ?61,368,982 | |||
| Gross Profit Margin | 53.7% | 56.4% | 53.3% | 57.2% | |||
Gross profit decreased by $0.3 million, or 0.8% (3.0% without foreign exchange effect), to $32.0 million for the three months ended June 30, 2012, compared to $32.3 million for the same period of 2011.? Gross profit increased by $2.1 million, or 3.5% (0.2% without foreign exchange effect), to $63.5 million for the six months ended June 30, 2012, compared to $61.4 million for the same period of 2011.? Our cost of contract revenue for three months ended June 30, 2012 increased by $2.6 million, or 10.5% (7.9% without foreign exchange effect), to $27.6 million, from $24.9 million for the same period of 2011.? Our cost of contract revenue for six months ended June 30, 2012 increased by $9.6 million, or 20.9% (16.9% without foreign exchange effect), to $55.6 million, from $46.0 million for the same period of 2011.? As a percentage of revenue, our cost of contract revenue increased from 43.6% for the three months ended June 30, 2011 to 46.3% for the same period of 2012, and it increased from 42.8% for the six months ended June 30, 2011 to 46.7% the same period of 2012. The increases in cost of revenue were primarily due to the increased headcount of employees and vessel leasing fee, the increasing price of consumable parts as well as the increased quantity demands for the projects. As a result, our gross profit margin decreased from 56.4% for the three months ended June 30, 2011 to 53.7% for the same period in 2012, and it decreased from 57.2% in six months ended June 30, 2011 to 53.3% for the same period of 2012.?
| For the Three Months Ended | For the Six Months Ended | ||||||
| June 30, | June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| General and Administrative Expenses | $ ? ?2,217,540 | $ ? ?2,201,241 | $ ? ?4,652,813 | $ ?4,151,924 | |||
| Percentage Change | 0.7% | 12.1% | |||||
General and administrative expenses were $2.2 million for the three months ended June 30, 2012 and 2011.? General and administrative expenses increased by $0.5 million, or 12.1%, from $4.2 million for the six months ended June 30, 2011 to $4.7 million for the same period of 2012, which was primarily attributable to an increase in other taxes, such as business tax which is levied?in the PRC based on revenue.? General and administrative expenses as a percentage of revenue were 3.7% and 3.8% for the three months ended June 30, 2012 and 2011 and 3.9% for both the six months ended June 30, 2012 and 2011.
| ? ?For the Three Months Ended? | ? ?For the Six Months Ended? | ||||||
| ?June 30, | ?June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Gain on Obligation under Make-Good Escrow | $ ? ? ? ? ? ?- | $ 6,135,280 | $ ? ? ? ? ? - | $ ?12,433,807 | |||
| Loss on Derivative | $ ? ?(728,720) | $ (5,461,731) | $ ?(921,677) | $ ?(5,484,583) | |||
For the three and six months ended June 30, 2012, we had $0.7 million and $0.9 million, respectively, in net losses from the reductions of estimated obligations to investors that had been incurred as a result of our fourth quarter 2010 Private Placement, as compared to net gains of $0.7 million and $6.9 million, respectively, for the same periods of 2011. The gain on obligation under the make-good escrow related to our meeting earnings targets both in 2010 and 2011, resulting in release of the contingent liability and a resulting gain, which significantly impacted our other income (expense) for the three and six months ended June 30, 2011. There is no such gain or loss in 2012 as the make-good escrow expired on December 31, 2011. The loss on derivative related to the fair value adjustment to the embedded derivatives in our preferred shares issued in our 2010 Private Placement. These gains or losses have no income tax effect.
Taxable income decreased by 0.7% and increased by 3.1% for the three and six months ended June 30, 2012, compared to the same periods of 2011. Income tax expense decreased by $0.1 million, or 0.7%, to $7.5 million for the three months ended June 30, 2012, compared to $7.6 million for the same period of 2011.? Income tax expense increased by $0.4 million, or 3.0%, to $14.9 million for the six months ended June 30, 2012, compared to $14.4 million for the same period of 2011.? ?The applicable income tax was 25%, which was effective on January 1, 2008 in the PRC.
| ?For the Three Months Ended? | ?For the Six Months Ended? | ||||||
| ?June 30, | ?June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Net Income | $ ? 21,723,917 | $ ? 23,287,352 | $ ? 43,392,735 | $ ?49,934,966 | |||
| Percentage Change | -6.7% | -13.1% | |||||
| Earnings per Diluted Ordinary Share | $ ? ? ? ? ?0.35 | $ ? ? ? ? ?0.37 | $ ? ? ? ? ?0.69 | $ ? ? ? ? 0.80 | |||
As a result of the foregoing, our net income decreased by $1.6 million, or 6.7% (8.6% without foreign exchange effect), to $21.7 million for the three months ended June 30, 2012, compared to $23.3 million for the same period of 2011.? Our net income decreased by $6.5 million, or 13.1% (15.8% without foreign exchange effect), to $43.4 million for the six months ended June 30, 2012, compared to $49.9 million for the same period of 2011.
As of June 30, 2012, we had cash of $158.4 million, total current assets $204.9 million, total assets of $322.9 million, total current liabilities of $23.4 million, no non-current liabilities, and a balance to Class A Preferred Shares of $50.0 million. We had a positive operating cash flow for the six months ended June 30, 2012 of $47.3 million, primarily attributable to the decrease in accounts receivable and prepaid expenses.
About China Dredging
China Dredging is one of the leading independent (non-state-owned) providers of specialized dredging services to the Chinese marine infrastructure market. With a modern fleet of ten dredging vessels, China Dredging has broad capabilities with which it is able to address diverse types of dredging projects. Its services, which require significant engineering and project management expertise, include on-site investigation and measurement, cost estimation, sediment and obstruction removal and transport and disposal of dredged material in an environmentally responsible manner. China Dredging conducts dredging operations through Fujian Xing Gang Port Service Co., Ltd., in which it holds a 50% equity interest, with the remaining 50% interest controlled by China Dredging pursuant to variable interest entity agreements.?
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking" statements regarding China Dredging's operating results and business prospects that involve substantial risks and uncertainties. You can identify some of these forward-looking statements by words or phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "future," "intend," "likely to," "may," "plan," "project," "potential," "predict," "should," "scheduled to," "target," "will," "would," or similar words, as well as statements in the future tense, in connection with any discussion of future operating or financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of China Dredging, or industry results, to differ materially from those expressed or implied by such forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to: continued public spending on PRC marine infrastructure; our ability to manage costs under our fixed-price contracts; our ability to maintain our concentrated customer base; the variable billing and payment cycles associated with our milestone contracts; our ability to maintain adequate working capital; our ability to expand our dredging fleet; unexpected adjustments or cancellations to our backlog; our ability to meet schedule requirements in our contracts; the significant competition in the markets in which we operate; our ability to attract and retain qualified personnel, including executive officers; extensive regulations of our business in the PRC; and political and economic policies of the Chinese government. Additional information and discussion of these risks, uncertainties, and other factors can be found in China Dredging's Annual Report on Form 20-F for the year ended December?31, 2011 and other filings by China Dredging with the U.S. Securities and Exchange Commission. ?
The forward-looking statements contained in this press release are made only as of the date hereof and China Dredging does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise.
| CHINA DREDGING GROUP CO., LTD AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (IN US DOLLARS) | ||||
| (Unaudited) | ||||
| June 30, 2012 | December 31, 2011 | |||
| Assets | ||||
| Current assets | ||||
| Cash | $158,421,471 | $112,409,544 | ||
| Accounts receivable | 23,478,578 | 27,020,183 | ||
| Cost and estimated earnings in excess of billings | ||||
| ?? on contracts in progress | 19,595,364 | 14,008,972 | ||
| Prepaid expenses | - | 4,767,072 | ||
| Inventories | 3,374,289 | 2,048,158 | ||
| Other receivables? | 3,621 | 3,364 | ||
| Total current assets | 204,873,323 | 160,257,293 | ||
| Other assets | ||||
| Prepaid dredger deposits | 22,823,862 | 23,038,180 | ||
| Security deposits | 48,418,070 | 48,872,718 | ||
| Property, plant and equipment, net | 46,777,556 | 51,131,051 | ||
| Total other assets | 118,019,488 | 123,041,949 | ||
| Total assets | $322,892,811 | $283,299,242 | ||
| Liabilities and equity | ||||
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable | $3,619,025 | $3,653,008 | ||
| Advance from a shareholder | 1,006 | - | ||
| Advance from related companies | 13,536 | 13,664 | ||
| Income tax payable | 7,510,272 | 8,295,538 | ||
| Accrued liabilities and other payables | 3,070,387 | 4,045,227 | ||
| Derivative liability | 9,201,504 | 8,279,827 | ||
| Total current liabilities | 23,415,730 | 24,287,264 | ||
| Total liabilities | 23,415,730 | 24,287,264 | ||
| Class A Preferred Shares, no par value; 25,000,000 shares | 50,064,935 | 50,064,935 | ||
| as of June 30, 2012 and December 31, 2011 | ||||
| Shareholders' equity | ||||
| Ordinary shares, no par value; 225,000,000 shares | - | - | ||
| Statutory reserves | 15,386,316 | 15,386,316 | ||
| Additional paid-in capital | 79,185,284 | 79,185,284 | ||
| Retained earnings | 141,951,831 | 98,559,096 | ||
| Accumulated other comprehensive income | 12,888,715 | 15,816,347 | ||
| Total shareholders' equity | 249,412,146 | 208,947,043 | ||
| Total liabilities and equity | $322,892,811 | $283,299,242 | ||
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| CHINA DREDGING GROUP CO., LTD AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||
| (IN US DOLLARS) | |||||||
| ?For the Three Months Ended? | ?For the Six Months Ended? | ||||||
| ?June 30, | ?June 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Contract revenue | $59,594,550 | $57,224,466 | $119,094,081 | $107,355,835 | |||
| Cost of contract revenue, including depreciation of $1,836,678 | (27,573,111) | (24,946,889) | (55,595,229) | (45,986,853) | |||
| Gross profit | 32,021,439 | 32,277,577 | 63,498,852 | 61,368,982 | |||
| General and administrative expenses | (2,217,540) | (2,201,241) | (4,652,813) | (4,151,924) | |||
| Income from operations | 29,803,899 | 30,076,336 | 58,846,039 | 57,217,058 | |||
| Other income (expense): | |||||||
| ?? Interest income | 182,678 | 122,927 | 331,085 | 195,055 | |||
| ?? Gain on exchange difference, net | - | - | 1,124 | - | |||
| ?? Gain on obligation under Make-Good Escrow | - | 6,135,280 | - | 12,433,807 | |||
| ?? Loss on derivative | (728,720) | (5,461,731) | (921,677) | (5,484,583) | |||
| Total other (expense) income | (546,042) | 796,476 | (589,468) | 7,144,279 | |||
| Income before income taxes | 29,257,857 | 30,872,812 | 58,256,571 | 64,361,337 | |||
| Income tax expense | (7,533,940) | (7,585,460) | (14,863,836) | (14,426,371) | |||
| Net income | 21,723,917 | 23,287,352 | 43,392,735 | 49,934,966 | |||
| Accretion of discount on Class A Preferred Shares | - | (400,519) | - | (6,135,012) | |||
| Net income attributable to ordinary shareholders | $21,723,917 | $22,886,833 | $43,392,735 | $43,799,954 | |||
| Earnings per ordinary share | |||||||
| ??? - Basic | $0.41 | $0.43 | $0.82 | $0.83 | |||
| ??? - Diluted | $0.35 | $0.37 | $0.69 | $0.80 | |||
| Weighted average number of ordinary shares outstanding | |||||||
| ??? - Basic | 52,677,323 | 52,677,323 | 52,677,323 | 52,677,323 | |||
| ??? - Diluted | 62,690,310 | 62,690,310 | 62,690,310 | 62,690,310 | |||
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Source: http://www.businessrevieweurope.eu/press_releases/china-dredging-group-co-ltd-reports-unaudited-second-quarter-2012-resultssuper bowl halftime show 2012 ahmad bradshaw tom brady halftime super bowl 2012 super bowl score madonna super bowl performance superbowl commercials
| CHINA DREDGING GROUP CO., LTD AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||||||||
| (IN US DOLLARS) | ||||||||
| ?For the Three Months Ended | ?For the Six Months Ended | |||||||
| ?June 30,? | ?June 30,? | |||||||
| 2012 | 2011 | 2012 | 2011 | |||||
| Net income attributable to ordinary shareholders | $21,723,917 | $22,886,833 | $43,392,735 | $43,799,954 | ||||
| Other comprehensive income | ||||||||
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