Q2 2020 China XD Plastics Company Ltd Earnings Call
XD Plastics Co limited second quarter 2020 earnings conference call at this time. All participants are in a listen-only mode after the speaker's presentation in a question-and-answer session to ask a question during the session. You will need to press star one on your telephone. Please be advised that today's conference is being recorded. I will now like to hand the confirmation over to your host today. Mr. Shower one. Thank you, please go ahead sir.
Thank you. Operate it. Hello everyone. Thank you all for joining us for the China closet second quarter 2020 Financial results conference call Johnnie Mae and call today mister chairman. And CEO is the operating officer and chief technology officer Mister Taylor down Chief Financial Officer yesterday China actually passing issue a press release announcing the second quarter 2012 windows before management presentation. I would like to refer to the same bank statement in connection with today's conference calls, and we might our listeners that Management's prepared remarks during the call may contain forward-looking statements which are subject to risks and uncertainties and that management made me additional forward-looking statements in response to your questions.
All statements other than statements of historical fact contained are forward-looking statements including but not limited to the company's growth potential in international markets the effectiveness of ability of the convenience product allocation. The impact of the company's product mix shift to more advanced products and related pricing policies the volatility of the companies operating we self and financial condition the company's production of performance in two thousand times and other details in the Commons filing with the SEC and available on our website at ww.w.
These forward-looking statements or no and no risks and uncertainties and are based on current expectations assumptions estimates and projections about the company and the industry. I'm coming there for crimes the protection of the Safe Harbor for forward-looking statements that is contained in the private security education Reform Act of 1995 month.
Actual results may be different from those discussed today, and we refer you to a more detailed discussion for the risks and uncertainties in the company's filings with the Securities and Exchange Commission.
To supplement their financial results presented in accordance with the management. We'll make reference to earnings before interest expense income tax depreciation and amortization which we refer to as after is a non-gaap Financial Manager working cellphone the income which the company believes to provide meaningful additional information to better understand operating performance.
a table
Income to app that can be found on the learning process this issue earlier today.
I would now like to turn the call over to our chairman and chief executive officer. Mr. Han. Mr. Han will be speaking in Chinese and I will translate his opening remarks YouTube app and please go ahead and issue.
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We have peace with our quality without with recovery in both top and bottom lines during the first half of the year. We have witnessed severe disruption in bolt action and south of China's Auto industry and their production and sales in the first half of this year's show a year-on-year declined as the result of the government impact detik org. I mean the negative economic and Industrial environment during the 3 months period ended it June 30th, 2012. China staple actively find twenties marketing strategies to promote south of new categories of higher-end products of 66 mph six produced with high price for materials with higher wage in domestic Market. This was evident by sales in Southwest. China is China and South China an average sales price increase by dead.
19.7% partially offset, the decreased sales volume of 47%
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Yeah, this is why he's off for the father.
Along, the Chinese government recently issues about the policies toward Enterprise. We opening we will continue to focus on our customers need
synchronize our production and sales to pursue stable sales increased at the same time. We will continue to complete our infrastructure projects in Halo and a compass that tended just bringing the production capacity inhaling jenkem, but back to 390 thousand metric tons and bringing the total capacity off to try base two or three hundred thousand metric tons by the end of 2020. We are confident in our ability to make further inroads into more specialized high tempo. For previous applications in more other markets.
What was your quality ago? She had to hold a quote on Thursday.
We will continue to optimize our management structure and enhance our operating division. See we are confident though our cooperation with Chinese major Banks to successfully life. I would expansion strategy in multiple regions and sectors and confident with our chromatic positioning.
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If that I will now turn the call over to pay that then I will see if our financial.
Thank you, Miss on and everyone could join you in the car today before I review the numbers. Let me remind you that our figures I discussed this reporting. The second quarter of 2021 SS the otherwise additionally any of the Year comparison is to the second quarter of 2019 and any sequential comparison is to the first quarter of the month. So let's go over our second-quarter results.
Revenues were two hundred eighty three point two million dollars in second-quarter a decrease of 179.9 dollars or 38.8% off 463.1 million dollar in the same period last year this was due to decrease of 47% in sales volume 3.3% off negative impact form exchange due to depreciation of R&B against US dollars.
Partially offset by an increase of 19.7% in the average arm V7 part of our products as compared with those of the same. Rossiter.
International market for the 3 months ended 20-30 2020 Ram news from domestic Market is decreased by one hundred sixty two point six million dollars or 36.5% of the combined result of a decrease of 46.1% in the sales volume depreciation R&B against the installer wage, what point three-per-cent and partially offset by an increase of twenty 22.1% in average during the selling price of of our products.
As compared with those of us here.
going to the China Association of automobile manufacturers
automobile production in sales in China decreased by 16.8% and 16.9% respectively for the first half of 2020 as compared to the same period 2019
the weekend in macro-economic conditions since the outbreak of covid-19 demek in January 2020 continue to deliberate our business environments company's business was negatively impacted and has generated lower Revenue During the period from February to April 2020.
Thanks positive efforts to expand our customer base has and to meet their requirements including producing new materials for such as the goggles and money to help alleviate the pandemic to our communities and mitigates the negative impact of vodka demek on Chinese Auto industry and the company had gone to recover slowly after May twenty twenty. We had decrease in sales by 43.8% in most history.
28 one Napleton in North China 16.5% in Central Time and has increased in sales by 54.5% in Southwest China 41.9%. 27.8% in South China for the 3 months period in the extreme Thirty 20% as compared to the same period of last year.
I just sent in price increase of twenty 22.1% was mainly due to increased sales of new categories of higher-end products off of pa66 and Pier 6.
Reduce the with high parts of our materials with higher selling prices in domestic market during the three-month period ending in 3112 in overseas markets off the 3 months ended to 30% revenues from overseas markets was zero point two million dollars as compared to Seventeen point five million dollar in the center of the city was temporarily shut down since February and has now resumed operation till the current. Which has negatively impacted Home Security.
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39.9 million dollar in the second quarter compared to sixty five point three million dollar in the same. 2019 representing a dick 25.4 million dollar or 38.9% of our gross margin remains consistent at 14.1% for both callers and do the 10:30 2020 and 2019 primarily due to decreased sales in semi-finished good with lower part of marketing and partially offset by the ink wage cost for either capacity either results of shutting down during the second quarter of 2020.
Do you need to cancel to work three point seven million dollar for the quarter ending in 1320 compared to a 5.8 million dollar in the same period in 2019 representing a decrease of the two point 1 million dollar or 36.2% The decrease was primarily due to the degrees of salary and Welfare and Miss Minnie's spam any results through the managing the cost reduction measure to cope with impact from the covid-19 is were 5.8 million dollar in the ending in 1320 compared to his nine point six million dollar in the same period from 2019 representing. The people is of 3.8 million dollar or 39.6%
This decrease was due to the difference of a 3.4 million dollar in raw materials consumption decrease of a 0.3 million dollars in depreciation an increase of June when 1 million dollars in salary and Welfare warranty personnel, as of a drink 3020 the number of ongoing research and development project was 356.
Total operating income was 30 point four million dollar in the second quarter ended 10:30 2020 compared to 49% $7 in the same period of time representing a decrease of 119.3 million dollar was 38.8%
The secret is primarily due to the lower boost profits and park partially offset by the lower operating expenses and income was 17.5 $15 in the second order 2020 compared to a net income of forty Point 1 million dollar in the same Paradox here representing a decrease of twenty two point five million dollar or 15.1% But if you can tell you for sure for the second quarter between 20 or boost $0.26 compared to sixty cents earnings per share with us here the average number of share used in computation basic and diluted earnings per share for three months and it's been 30 2020 was 56.9 minutes.
compared to Fifty Point nine million shares
Earnings per share in the player yet. Even though was forty four point nine million dollar for the second quarter twenty compared to seventy Point 1 million dollar for the same. Up here. Where did I need a decrease of 25.2 million dollars or 35.5% or detailed reconciliation in on that measure to nearest Home equivalent received the financial table and end of our personal lease early today.
Now let's turn to the balance sheet. I haven't been 30 20 the company had two hundred ninety point eight million dollar in the total amount of cash and cash equivalents mistreated cash and time deposits representing the increase of 62 points.
$1000000 27.3% as compared to 228.4 million as of December 31st 2019.
Mainly due to financing activity cash flows. I also 10:30 20/20 wasn't Capital was 276 point eight million dollar and current ratio of one point two. I just compared to current ratio for 110 as of December 31st 2019. So as of June 30th 2020 was $800,600 increased by 4.8% as compared to $836 as of December 31st, 2019 primarily due to age of forty $519 a month until I'm controlling interest expenses and other current assets increased by $233,000 more $136 percent primarily due to an English of
308.5 million dollars in receivables fuel pump parties partially outside by a decrease of the 4270 and receivable and if you could have like twenty six point six million dollar event is from suppliers for purchasing raw materials. The average the average is short-term and long-term long-term bank loans increased by 34.3% due to using the line of credit to support operating and investing activities in Salem Junction that situation. We Define a management level as the sum of advocate short-term and long-term loans over to the assets.
I'm moving to our financial guidance and I'll look for ten twenty as a result of outbreak of covid-19 in the PRC China Auto industry production and sales office decreased, you know. 20/20. It has a ripple effect impact throughout all those Supply chains including the company.
The company had temporarily closed some of its manufacturing facility and opposites in PRC accordance with the requirements of a person regulation the ongoing and coordinate in pandemic suck. I'm going material adverse effect on our business operation a matter of these circumstances and continuing on certain days. The company will not be able to forecast Financial guidance physical 20/20 until further notice.
Before we open the car to your questions. I would like to note that for any question try to the management title translate your questions and the answers. If you want to ask you a question and Chong in English for the benefits of our other business, but it's also note that we only be able to respond to question about financial and operating results for automatic calling the Grand Prairie offer before you to our already issued press releases will not be able to respond to questions that are directed to the principles of the going private offer about the proposed transaction with that will not open the cultural question Jason.
Thank you. Ladies and gentlemen will now begin the question-and-answer session. If you wish to ask a question, please press star one on your telephone and wait for name to be announced. If you wish like a request, please press the pound or haschke.
press star one oil telephone
Once again, if you wish to ask a question, please press * 1. Your first question comes from Derek Wagner question.
Yes, I joined a little late. Could you please provide an update on the going private transaction?
Hi Derek, I actually started in already prepared remarks the we have filed with the definitive merger agreements and perhaps his statements with the SEC and the commission was already disposed.
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Yes.
so other then
no.
Okay.
Do you know when you would?
Let me ask my calls home know what she said. She got a woman so they just took off.
Is much higher sort of cheating on that old man down to the to the shows here to the Google box.
Hi Derrick, the answer comes from our chairman and CEO. So we everything is proceeding as what we have already discussed. There's some that.
Okay. Thank you.
Once again, if you wish you ask question, please press star one on your telephone.
Your next question comes from be Vendome from them code. Please ask your question.
Good afternoon here from the Netherlands and this is part from them. I've got a question considering you're few 2 results.
We do think the value of the company would be different than a few months ago. That's a question for the CEO.
Hey, brother. Thanks for the call. Let me transfer you a question about a woman to go people argue that because I help you.
She may have thought that's what she got your email off.
Hi, this is Taylor. I'm trimming sales at covid-19 pandemic and also the changing volatile domestic and oversee macro economic and political conditions. It's really hard for the management to give accurate speed option over either the year or the next year. But we are in the management is doing everything possible you have problems seeing that we've made some proactive initiative producing some people materials.
Okay. Thank you.
I think apart thank you. Once again, if you wish you ask question, please press star one on your telephone.
Once again to also question is star one on your telephone.
Once again to ask a question, please. Press star one on your telephone.
No questions at this time. I'll now hand over to mister Soldier one for closing remarks. Thank you.
Thank you on behalf of China traffic. We want to thank you for your interest and participation in this call. If you would like to speak with us further. Please call them myself with a day in your office their contact numbers for all of us at least at the end of the press release. Thank you.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect your lines.
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Ladies and gentlemen, thank you for standing by and welcome to China XD Plastics. Co limited second quarter 2020 earnings conference call at this time. All participants are in a listen-only mode after the speaker's presentation. There will be a question-and-answer session to ask questions during the session you will need to press star office telephone. Please be advised to this conference is being recorded. I will now like to hand the conference over to your host today with the shower. Thank you, please go ahead sir.
Thank you. Operate it. Hello everyone. Thank you all for joining us for the China closet second quarter 2020 financial company called Cox Johnny me or can call today is Chairman and CEO operating officer and chief technology officer Mister Taylor down Chief Financial Officer. Oh yesterday China actually part of the issue a press release announcing the second quarter two thousand plus results before management presentation. I would like to refer to the safe harbor statement in connection with today's conference call and remind our listeners that management prepared remarks during the call may contain forward-looking statements which are subject to change and uncertainty and that management make additional forward-looking statement in response to your questions.
Other than statements of historical fact contained are forward-looking statements including but not limited to the company's growth potential in international markets the effectiveness and profitability of the company is product allocation. The impact of the company's product mix shift to more advanced products and related pricing policies the volatility of the companies operating and financial condition the company production of performance in 2020 and other details in the Commons filing with the SEC and available on our website at www.sec.gov.
If forward-looking statements or no and no risks and uncertainties and are based on current expectations assumptions estimates and projections about the company and the industry. I'm coming there for crimes the protection of the Safe Harbor for forward-looking statements that is contained in the private security education Reform Act of 1995 month.
Actual results May differ from those discussed today and we refer you to a more detailed discussion for the risks and uncertainties in the company's filings with the Securities and Exchange Commission.
To supplement their financial results presented in accordance with the management will make reference to earnings before interest expense income tax depreciation and amortization which we refer to as after is a non-gaap Financial Manager working cellphone the income which the company believes to provide meaningful additional information off to better understand operating performance.
A table reconciling the income to add that can be found on the earnings release issue earlier today.
I would now like to turn the call over to our chairman and chief executive officer. Mr. Han Mr. Hunt will be speaking in Chinese and I will translate his opening remarks into age and please go ahead and issue.
Well, is it shows a cheese Aaliyah G.
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She Nation called you I guess hello. Happy birthday shows the time being social his let me be also she took over the show.
We have peace with our quality without with recovery in both top and bottom line during the first half of the year. We have written it severe disruption in bolt action and south of China's Auto industry and the production and sales in the first half of this year's show a year-on-year declined as the result of the government impact damage wage. I mean the negative economic and Industrial environment during the three months. And it's June thirtieth two thousand times China actually proactively find twenties marketing strategies to promote south of new categories of higher-end products of 66 mph six produced with high price for materials with higher salaries in domestic Market. This was evidenced by sales calls in Southwest. China is China and South China and average sales price increase by
19.7% partially offset, the decreased sales volume of 47%
Psari Seafood. May she may be that she's so yeah.
Yeah, what was that?
Along the Chinese government recently issue supportive policies toward Enterprise. We opening we will continue to focus on our customers need
synchronize our production and sales to pursue stable sales increased at the same time. We will continue to compete our infrastructure projects in Halo and a compass test and it just bringing the production capacity in Highland on campus back to 390 thousand metric tons and bringing the total capacity off the base two or three hundred thousand metric tons by the end of 2020. We are confident in our ability to make further inroads into more specialized tight end product for previous applications in more other markets.
She's your wife quality ago. She would be the quote on Monday.
We will continue to optimize our management structure and enhance our operating division. See we are confident though our cooperation with Chinese major Banks to successfully life. I would expansion strategy can multiple regions and sectors and confident with our core Market positioning.
If that I will now turn the call over to pay the bank. I will see if oh to walk you through our financials. Please.
Thank you, Miss on Sergio and everyone could bring in the car today before I review the numbers. Let me remind you that our figures I discussed this recording. Second quarter of 2020 on my otherwise additionally any way over your comparison is to the second quarter of 2019. And any sequential comparison is to the first quarter of a game. So let's go over our second-quarter results.
Revenues were two hundred eighty three point two million dollars in second-quarter a decrease of 179.9 dollars or 38.8% off 463.1 million dollar in the same period last year this was due to the decrease of 47% in sales volume 3.3% off an impact from exchange due to depreciation of R&B against US dollars.
And partially offset by an increase of 19.7% in the average selling price of our product as compared with those of the same. Our senior international market for the 3 months ended 20-30 2020 Ram news from domestic Market decreased by 162.6 million months or 36.5% of the combined result of a decrease of 46.1% in the sales volume depreciation R&B against your thoughts by 4.3% and partially offset by an increase of twenty 22.1% in average around the same price of of our products.
As compared with those of us here.
according to the China Association of automobile manufacturers
automobile production in sales in China decreased by 16.8% and 16.9% respectively for the first half of 2020 as compared to the same period of 2015.
We can in macro-economic conditions since the outbreak of covid-19 demek in January 2020 continue to deliberate our business environments company's business was negatively impacted and has generated lower Revenue During the period from February to import 2020.
Thanks.
A positive efforts to expand our customer base has and to meet their requirements including producing new materials for PPE such as the goggles and masks may help alleviate the pandemic to our communities and mitigate the negative impact of vodka demek on Chinese Auto industry and the company has begun to Palm Harbor slowly Optima 2020. We had decrease in sales by 33.8% in Northeast China.
181 Maple something Northside 16.5% in Central Time and has increased in sales by 54.5% in Southwest China 41.9% off 27.8% in South China for the 3 months period in the extreme Thirty 20% as compared to the same period of last year.
It's 407 price increase of twenty 22.1% was mainly due to increased sales of new categories of higher-end products off of pa66 and Pier 6.
Reduce the high parts of our materials with higher selling prices in domestic market during the three months. And the extreme 30 21 and over sea markets off the 3 months ended June Thirty Point twenty news from overseas markets was zero point two million dollars as compared to Seventeen point five million dollar in the center of Dubai facility was temporarily shut down since February and has not received this operation till the current. Which has negatively impacted by passivity.
Which profits was thirty nine point nine million dollar in the second quarter compared to sixty five point three million dollar in the same. Twenty nineteen. I'm representing a decrease of twenty five point four million dollars or 38.9% Our customers remained consistent at 14.1% of what Bush close ended in 30 2020 and 2019 primarily due to decreased sales in semi-finished good with lower part of marketing am actually upset by The increased cost for either capacity either results of shutting