TORONTO, May 29, 2020 (GLOBE NEWSWIRE) — CF Energy Corp. (TSX-V: CFY) (“CF Energy” or the “Company”, together with its subsidiaries, the “Group”), an energy provider in the People’s Republic of China (the ”PRC” or “China”), announces that the Company has filed its unaudited condensed interim consolidated financial results for the three-month period ended March 31, 2020 (“Q1 2020”).
Results for the Three-Month Period Ended March 31, 2020Since the outbreak of COVID-19 pandemic in late January 2020, the Group experienced a significant drop in revenue across all our business segments in Q1 2020. The economic damage caused by the COVID-19 pandemic is largely driven by a fall in gas demand due to the imposition of government protective and containment measures such as quarantine and travel restrictions and temporary cessation of businesses activities in all the cities where the Company operate which has adversely affected our overall revenue and gas sales volume in Q1 2020.Revenue in Q1 2020 was RMB67.4 million (approx. CAD13.0 million), a decrease of RMB40.4 million (approx. CAD8.3 million), or 38%, from RMB107.8 million (approx. CAD21.3 million) for the three-month period ended March 31, 2019 (“Q1 2019”).Gross profit in Q1 2020 was RMB27.3 million (approx. CAD5.3 million), a decrease of RMB11.4 million (CAD2.3 million) or 30% from RMB38.7 million (approx. CAD7.6 million) in Q1 2019. The overall gross margin in Q1 2020 was 40.6%, an increase of 4 percentage points as compared to 36.0% in Q1 2019. Lower gross margin in Q1 2019 was attributable to the shortage of pipeline gas supply resulting in more expensive LNG supplies had to be purchased to supplement natural gas requirements. Benefited from the new supply source of pipeline gas made available to the Group since late June 2019, there is a significant reduction in the Group’s reliance on more expensive LNG supplies, which allowed the Group to normalize its overall gross profit margins since early Q3 in 2019, the gross profit margin in Q1 2020 also improved as a result.Net profit in Q1 2020 was RMB16.5 million (approx. CAD3.2 million), an increase of RMB11.7 million (approx. CAD2.2 million), or 243%, from RMB4.8 million (approx. CAD1.0 million) in Q1 2019. Net Profit in Q1 2020 included a fair value change on derivative financial instrument of RMB12.1 million (approx. CAD2.3 million) relating to the commitment of the estate of Mr. Huajun Lin to subscribe for the common shares of the Company in the amount of RMB 36.0 million, which in line with IFRS, has been classified as a “derivative financial instrument”, subject to periodic fair value assessment and adjustment (as applicable). On a comparable basis, after excluding the fair value change on derivative financial instrument, the adjusted net profit in Q1 2020 was RMB4.4 million (approx. CAD0.9 million), close to that in Q1 2019.Chairman StatementAs with the society and business operators alike in China, we are very delighted and grateful to see China’s recent lifting of quarantine and travel restrictions with COVID-19 showing encouraging signs of abatement and the virus being under control, which immediately stimulated increased business and social activities and the economy showing early signs of recovery.Our recent procurement of the exclusive right in the fast-growing electric vehicle (EV) battery swap market in Hainan represents a major break-through, a welcome reinforcement and an additional weapon in our war chest to combat the continuing impact of COVID-19 on our existing business, but more importantly, it also represents one of the main drivers alongside our integrated smart energy initiatives for long term and sustained growth going forward. We will as duty bound continue with our protective measures to protect our employees and customers from contracting COVID-19 and avoid any unnecessary interruptions to our operations.The unaudited condensed interim consolidated financial results and Management’s Discussion and Analysis (MD&A) can be downloaded from www.SEDAR.com or from the Company’s website at www.cfenergy.com.About CF Energy Corp. (Formerly “Changfeng Energy Inc.”)CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange (“TSX-V”) under the stock symbol “CFY”. It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC. In 2009, CF Energy was recognized as being one of China’s the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSXV for the 2018 year.TELE-CONFERENCEA tele-conference will be held following the release of this press release and the results of the Group, details of which will be provided by way of a separate press release in due course.CONTACT INFORMATIONCorporate Investment Relations
Investor.relations@changfengenergy.cnCharles Wang
Executive Assistant to CEO & Chair of the Board
Zhaoyu.wang@changfengenergy.cnFrederick Wong
Director of the Board
fred.wong@changfengenergy.cnForward-Looking StatementsCertain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”). All statements, other than statements of historical fact, included or incorporated by reference in this document are Forward-Looking Statements, including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future. These Forward-Looking statements can be identified by the use of forward-looking words such as “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe” or “continue” or similar words or the negative thereof. No assurance can be given that the plans, intentions or expectations or assumptions upon which these Forward-Looking Statements are based will prove to be correct and such Forward-Looking Statements included in this news release should not be unduly relied upon.Although management believes that the expectations represented in such Forward-Looking Statements are reasonable, there can be no assurance that such expectations will prove to be correct. Such Forward-Looking Statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such Forward-Looking Statements. These factors include, without limitation, no significant and continuing adverse changes in general economic conditions or conditions in the financial markets. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’s filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider those factors.The Forward-Looking Statements included in this news release are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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