Antelope Enterprise Holdings Limited
Q2 2021 Earnings Call Transcript
Published:
- Operator:
- Good day, and thank you for standing by. Welcome to the Antelope Enterprise First Half 2021 Earnings Conference Call . Please be advised that today's conference is being recorded . I'd now like to hand the conference over to your speaker today, David Rudnick. Please go ahead.
- David Rudnick:
- Thank you, Lisa. Good morning, ladies and gentlemen, and good evening to those of you who are joining us from China. Welcome to Antelope Enterprise's First Half 2021 Earnings Conference Call. With us today are Antelope Enterprise's Chief Executive Officer, Ms. Meishuang Huang; and Chief Financial Officer, Mr. Edmund Hen. Before I turn the call over to Ms. Huang, I would like to address forward-looking statements that may be discussed on the call. Forward-looking statements involve risks and uncertainties and include, among others, those regarding revenue, operating expenses, other income and expense, taxes and future business outlook. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. The company claims the safe harbor of protections for such forward-looking statements as contemplated under the Private Securities Litigation Reform Act of 1995. Please refer to the documents filed by the company with the SEC, specifically the most recent report on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates. And now it's my pleasure to turn the call over to Antelope Enterprise's CEO, Ms. Meishuang Huang; and Antelope Enterprise's CFO, Mr. Edmund Hen. will be translating for Ms. Huang. Ms. Huang, you may proceed.
- Meishuang Huang:
- Thank you, David. On behalf of the company, I would like to welcome everyone to our first half 2021 earnings conference call. For the first half of 2021, we experienced challenging market conditions due to the slowdown of the real estate sector in China, which was still being impacted by the continued effects of the COVID-19 pandemic. Our sustained marketing efforts during this period enabled us to realize an 11% increase in sales volume in the first half of fiscal 2021 as compared to the same period of 2021. We made a strategic decision to sell products already in inventory at available market prices that are below our cost of production, which hindered our profitability for the first half 2021. However, this will help us to shift the momentum of the company towards future growth. For the first half of 2021, we utilized production facilities capable of producing 1.1 million square meters of ceramic tiles per year out of effective annual production capacity of 51.6 million square meters of ceramic tiles. We took production off-line at our Hengdali facility for the first half 2021, exempting that what we lease to a third party since we determined that we had ample inventory available to work through our sales channels. While we are committed to our core business, we are also focused upon diversifying our business lines to fuel our growth. We're encouraged that Antelope Chengdu, one of our subsidiaries in the financial technology sector, contributed a significant level of revenues to our financial performance for the first half of 2021. We believe that our building materials sector will continue to benefit from importance of the rural sector to the Chinese economy. We believe that the Chinese government's renewed efforts to promote affordable housing, projected growth in lower-tier cities and upgrading of existing housing stock are potential catalysts that could benefit our business. With that, I would like to turn over the call to the company's Chief Financial Officer, Mr. Edmund Hen, who will discuss the company's first half 2021 earnings results in more detail. Thank you.
- Edmund Hen:
- Thank you, Ms. Huang. I will now move on to a more detailed discussion of our financial results for the six months ended June 30, 2021. Our revenue for the six months ended June 30, 2021, was RMB50.1 million or $7.7 million, a 25.9% increase from RMB39.8 million or $5.6 million for the same period of 2020. The increase in revenue was due to a 6% increase in the sales of ceramic tiles to RMB42.2 million or $6.5 million for the six months of 2021 as compared to RMB39.8 million or $5.6 million for the same period of 2020 and RMB7.9 million or $1.2 million in software rights with revenue from Antelope Chengdu. The increase in sales of ceramic tiles was due to an 11.1% increase in our sales volume to 2 million square meters of ceramic tiles for the six months ended June 30, 2021 compared to 1.8 million square meters of ceramic tiles for the same period of 2020, which was partially offset by an 8.6% period-over-period decrease in our average selling price. Gross loss for the six months ended June 30, 2021 was RMB6.5 million or $1 million as compared to gross profit of RMB0.9 million or $0.1 million for the same period of 2020. The gross loss margin was 13% as compared to a gross profit margin of 2.4% for the same period of 2020. Our income for the six months ended June 30, 2021 was RMB7.1 million or $1.1 million compared to the RMB9.8 million or $1.4 million for the comparable period of 2020. Other income primarily consists of rental income or the company received by leasing out one of its production lines from its Hengdali facility pursuant to an eight year lease contract. In addition, we realized RMB2.4 million or $0.3 million in technology consulting income from our newly incorporated subsidiary, Chengdu Future, during the six months ended June 30, 2020. Selling and distribution expenses for the six months ended June 30, 2021 were RMB3.2 million or $0.5 million, a decrease from RMB5.2 million or $0.7 million for the comparable period of 2020. Administrative expenses for the six months ended June 30, 2021 were million or $2.7 million as compared to RMB14.7 million or $2.1 million for the same period of 2020. Bad debt expense for the six months ended June 30, 2021 was RMB49.8 million or $7.7 million as compared to bad debt expense of RMB101.8 million or $14.4 million for the same period of 2020. We recognized a loss allowance for expected credit loss on our financial assets, primarily on trade receivables, which are subject to impairment under IFRS 9, Financial Instruments. We believe that we have undertaken appropriate measures to resolve our bad debt expense. We will continue to review each of our for credit quality as well as assiduously test their account receivables balances in each upcoming fiscal period. Net loss for the six months ended June 30, 2021 was RMB70.8 million or $10.9 million as compared to net loss of RMB111.5 million or $15.8 million for the same period of 2020. The decrease in net loss was mainly due to a decrease in bad debt expense, which was partially offset by an increase in gross loss and an increase in administrative expenses. Loss per basic and fully diluted share for the six months ended June 30, 2021 was RMB16.24 or $2.51 as compared to loss per basic and fully diluted share of RMB40.82 or $5.77 for the same period of 2020 with the latter figures retroactively presented for the 3
- Operator:
- David Rudnick:
- Thank you. On behalf of the entire Antelope Enterprise management team, I want to thank all of you for your interest and participation on this call. This concludes Antelope Enterprise's first half 2021 earnings call. Thank you all very much.
- Operator:
- This concludes today's conference call. Thank you for participating. You may now disconnect.