China Resources Reports Third Quarter Earnings.HONG n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. KONG--(BUSINESS WIRE)--Nov. 13, 1997--China Resources Development, Inc. (Nasdaq: CHRB CHRB California Horse Racing Board CHRB Community Housing Resource Board (Montana) CHRB Commonwealth Health Research Board , http://www.chrb.com), a leading natural rubber distributor based in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China (PRC), today announced operating results for the third quarter and nine months ended September September: see month. 30, 1997. Results have been converted from Renminbi (the lawful Licit; legally warranted or authorized. The terms lawful and legal differ in that the former contemplates the substance of law, whereas the latter alludes to the form of law. A lawful act is authorized, sanctioned, or not forbidden by law. currency of the PRC) to U.S. dollars (for information purposes), at the prevailing exchange rate as quoted by the People's Bank of China The People's Bank of China (PBC or PBOC) (Simplified Chinese: 中国人民银行; Traditional Chinese: on September 30, 1997 (U.S.$1.00=Rmb8.30). For the three months ended September 30, 1997, sales fell to Rmb419.3 million (U.S.$50.5 million), compared with Rmb486.8 million (U.S.$58.6 million) during the year-ago third quarter. The lower sales during the period was primarily due to reduced trading of agricultural products other than rubber. The Company's natural rubber distribution sales increased 4.4% in the 1997 third quarter compared to the year-earlier period, however, gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. fell significantly as currency deflation deflation: see inflation. deflation Contraction in the volume of available money or credit that results in a general decline in prices. A less extreme condition is known as disinflation. in Thailand, Indonesia and Malaysia (three of the world's leading natural rubber producing countries) impacted the worldwide natural rubber market, pushing the per-ton price down in the third quarter to Rmb9,000, versus Rmb10,400 in the first half of 1997 and Rmb12,000 per ton in the comparable 1996 period. Net income for the three-month period was Rmb8.8 million (U.S.$1.1 million), or Rmb1.46 (U.S.$0.18), compared with net income of Rmb15.6 million (U.S.$1.9 million), or Rmb5.31 (U.S.$0.64) per share, in the comparable 1996 period. Per share results are based on 6,029,004 and 2,939,589 weighted average shares outstanding for the 1997 and 1996 three month periods, respectively. The weighted average share count increase for both the three and nine month periods ended September 30, 1997 reflects the conversions into common stock of the Company's Series B Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". , which were sold in the Company's 1996 private placements and of which no shares remain unconverted or outstanding. Per share results and weighted average shares are adjusted for a one-for-ten reverse stock split of the Company's outstanding common stock that was effective on December 31, 1996. For the nine months ended September 30, 1997, sales were Rmb893.8 million (U.S.$107.7 million), compared with sales of Rmb1,282.5 million (U.S.$154.5 million) in the year-earlier period. Gross profit margins in the first nine months of 1997 impacted by reduced rubber prices fell to 3.8%, versus 9.1% in the year-earlier period, and adversely affected net income. For the first nine months of 1997, net income was Rmb18.9 million (U.S.$2.3 million), or Rmb3.19 (U.S.$0.38) per share, versus Rmb28.7 million (U.S.$3.5 million), or Rmb9.78 (U.S.$1.18) per share. Per share results are based on 5,917,893 and 2,939,589 weighted average shares outstanding in the 1997 and 1996 nine-month periods, respectively. Li Shunxing, President of China Resources China Resources (Chinese: 華潤; HKSE: 0291 ) is a group of companies in wide variety of business in Hong Kong and mainland China. Some of its companies use the name the acronym CRC. Development, Inc., commented on the results, "The unfavorable market conditions that have been impacting our operations continue to persist, and the Southeast Asian currency crisis has led to further profit margin erosion in the most recent quarter. We have been successful in mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. some of the adverse effects by hedging our exposure to falling natural rubber prices. Additionally, our corporate restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and streamlining program, instituted in the 1996 fourth quarter, has contributed to improved corporate efficiency and, significantly, 44% lower selling, general and administrative expenses through the first nine months of 1997." China Resources Development, Inc., with offices in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and the Hainan Province in the PRC, through a subsidiary, owns a 56% interest in Hainan Zhongwei Agricultural Resources Co. Ltd. (HARC). HARC markets and distributes dry, natural rubber, liquid latex latex, emulsion of a polymer (e.g., rubber) in water (see colloid). Natural latexes are produced by a number of plants, are usually white in color, and often contain, in addition to rubber, various gums, oils, and waxes. and other agricultural products, and procures production materials and supplies for major customers. The Hainan Province supplies over 60% of the PRC's natural rubber production. Additional corporate information is available at the Company's web site - www.chrb.com. Except for the historical information in this press release, it includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including, but not limited to the outcome of the Company's due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. process on its proposed strategic investment, the impact of weather, competitive pressures from within the natural rubber industry, quarterly fluctuations in results, the management of growth, market dynamics and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations. -0-
CHINA RESOURCES DEVELOPMENT, INC., AND SUBSIDIARIES
Condensed Consolidated Income Statements (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1997 1996 1997
RMB RMB US$(a) RMB RMB US$(a)
Sales 419,295 486,788 50,517 893,762 1,282,507 107,682
Cost of Sales 410,396 445,430 49,445 860,071 1,165,224 103,623
Gross Profit 8,899 41,358 1,072 33,691 117,283 4,059
Depreciation of
fixed assets 1,195 484 144 2,039 1,692 246
Selling and
administrative
expenses 6,263 14,132 755 21,979 39,305 2,648
Operating income 1,441 26,742 173 9,673 76,286 1,165
Financial
income/(expenses),
net (859) (10,122) (103) 31 (31,798) 4
Other income
(losses), net 19,981 11,127 2,407 38,726 15,370 4,666
Income before
income taxes 20,563 27,747 2,477 48,430 59,858 5,835
Income taxes 1,806 2,335 217 7,959 7,912 959
Net income
before minority
interests 18,757 25,412 2,260 40,471 51,946 4,876
Minority
interests 9,979 9,807 1,202 21,577 23,208 2,600
Net income 8,778 15,605 1,058 18,894 28,738 2,276
Earnings per
share 1.46 5.31 0.18 3.19 9.78 0.38
Weighted average
number of common and
common equivalent
primary shares
outstanding 6,029,004 2,939,589 6,029,004 5,917,893 2,939,589 5,917,893
(a) Based on an exchange rate of U.S.$1.00=Rmb8.30 on September 30, 1997.
CONTACT: Edward Wong Edward Wong (born 14 November, 1972 in Washington, D.C.) is an American journalist and a foreign correspondent for The New York Times. He started out as an intern in 1998 and eventually worked at the Metro, Sports, and Business desks. Financial Controller 011/852/28107205 or fc@chrb.com or Robert L. Rinderman, Joseph N. Jaffoni Jaffoni & Collins Incorporated 212/835-8500 or info@jcir.com |
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