Brilliance China Automotive Holdings Ltd Announces Interim Results
1 September 1998
Brilliance China Automotive Holdings Limited Announces Interim Results; Semi-Annual Dividend
HONG KONG, Aug. 31 -- Brilliance China Automotive Holdings
Limited (the "Company") announced today interim results for the
six months ended June 30, 1998 and the payment of a semi-annual dividend.
Consolidated net sales of the Company and its operating subsidiaries,
Shenyang JinBei Passenger Vehicle Manufacturing Company Ltd. ("Shenyang
Automotive") and Ningbo Yuming Machinery Industrial Co., Ltd. ("Ningbo
Yuming") in the first six months of 1998 were Rmb 1,383.1 million, a 38.9%
increase from sales of Rmb 995.5 million for the same period in 1997. The
increase in sales was primarily attributable to the strong sales of Shenyang
Automotive's Mid-priced Minibus.
Shenyang Automotive sold a total of 12,485 minibuses in the first half of
1998, a 50.1 % increase over the 8,318 minibuses sold for the same period in
1997. Shenyang Automotive sold 8,685 of its Mid-priced Minibuses in the first
six months of 1998, an increase of 134.1 % over the 3,710 units sold in the
same period of 1997. Unit sales of the Deluxe Minibus increased 7.6 % from
2,209 in the first six months in 1997 to 2,377 units for the same period in
1998. Unit sales of the Standard Minibus declined 40.7% from 2,399 units in
the first six months of 1997 to 1,423 for the same period in 1998.
Consolidated operating income for the first six months of 1998 increased
72.1% to Rmb 256.5 million from Rmb 149.0 million for the same period in 1997.
The increase was mainly due to increased sales and cost reductions resulting
from improved economies of scale in production, a decrease in the price of
domestic and imported components and improved operating efficiencies. Cost of
sales as a percentage of sales declined from 74.0% in the first half of 1997
to 72.7% for the same period in 1998. Selling and administrative expenses
rose in the first half of 1998 by 10.0% over the same period in 1997,
primarily as a result of increased promotional expenses.
Net income increased 64.0% to Rmb 123.8 million in the first half of 1998
from Rmb 75.5 million in the first half of 1997. Earnings per share were
US$0.86 for the first half of 1998, a 65.4% increase over the earnings of
US$0.52 per share for the first half of 1997.
In May 1998, the Company acquired an indirect interest in two components
suppliers: a 51% equity interest in Ningbo Yuming, a wholly foreign-owned
Chinese enterprise primarily engaged in the production of automobile window
molding and stripping; and a 50% equity interest in Mianyang Xinchen Engine
Co., Ltd. ("Mianyang Xinchen"), a Sino-foreign equity joint venture
manufacturer of gasoline engines for use in passenger vehicles and light duty
trucks. Ningbo Yuming is located near Shanghai in Ningbo, Zhejiang Province,
while Mianyang Xinchen is situated in Mianyang, Sichuan Province, in the
southwestern region of China. The sales revenue for the first six months of
1998 of Ningbo Yuming and Mianyang Xinchen were Rmb 64.7 million and
Rmb 56.0 million, respectively, which contributed Rmb 12.5 million and
Rmb 5.5 million, respectively, to the net income of the Company.
The Company adopted a resolution at a meeting of its Board of Directors on
August 26, 1998 to pay a cash dividend of US$0.04 per share of the Company's
common stock. The dividend is payable on October 30, 1998 to holders of
record on October 8, 1998.
In light of volatile market conditions in Asia, the Company decided to
postpone its recent proposed offering of 8,000,000 primary common shares. An
F-1 registration statement for this proposed offering was filed with the
U.S. Securities and Exchange Commission on June 11, 1998. The Company does
not believe this postponement will interrupt the current operations of
Shenyang Automotive. The Company will continue to monitor the market closely
to look for appropriate opportunities to raise funds in the capital markets.
The Company and its subsidiaries have established processes for evaluating
and managing the risks and costs associated with Year 2000 software failures.
The Company has identified and analyzed both internally developed and acquired
software that utilizes date embedded codes that may experience operational
problems when the Year 2000 is reached. The Company, its subsidiaries and
their software suppliers are making and intend to complete necessary
modifications to the identified software by the first half of 1999. The
Company and its subsidiaries are also communicating with customers, suppliers,
financial institutions and others with which it does business to coordinate
Year 2000 compliance. Management does not anticipate that the Company or its
subsidiaries will incur significant operating expenses or be required to
invest heavily in computer systems improvements to be Year 2000 compliant, and
does not anticipate that business operations will be disrupted or that its
customers will experience any interruption of sales or maintenance services as
a result of the millennium change.
The Company, incorporated in Bermuda, was established in 1992 to own a 51%
interest in Shenyang Automotive, a Sino-foreign equity joint venture
enterprise established in 1991. Shenyang Automotive, located in Shenyang, the
capital of Liaoning Province and the commercial center of the northeastern
region of China, is a leading manufacturer of minibuses in China. The Company
was the first with operations solely in China to list directly on the New York
Stock Exchange.
* Translation of amounts from Renminbi (Rmb) to U.S. dollars (US$) for the
convenience of the reader has been made at the rate of US$1.00 = Rmb 8.28,
the rate announced by the People's Bank of China on June 30, 1998. No
representation is made that the Renminbi amounts could have been, or may
now be converted into United States dollars at that or at any other rate.
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of June 30, 1998 and 1997
As of June 30, 1998 As of June 30, 1997
(unaudited) (unaudited)
(Amounts in thousands,
except for share data) Rmb Rmb
ASSETS
Current assets:
Cash and cash equivalents 329,529 217,665
Short-term bank deposits 1,591 228,146
Trade receivables, net 423,165 233,313
Inventories 315,050 208,531
Prepayments and other current assets 297,689 158,994
Due from affiliates 64,937 392,840
Total current assets 1,431,961 1,439,489
Property, plant and equipment, net 649,987 722,965
Investment in associated companies 218,269 --
Other assets 283,818 68,633
Total assets 2,584,035 2,231,087
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 172,619 243,590
Current portion of long-term loans 18,736 21,055
Accounts payable 332,230 265,200
Customer advances 9,496 22,728
Other payables 65,815 32,340
Accrued expenses and other
current liabilities 50,735 40,007
Taxes payable 95,502 20,394
Due to affiliates 77,475 57,481
Due to associated company 25,634 --
Dividend payable 9,004 4,927
Total current liabilities 857,246 707,722
Long-term loans -- 2,453
Minority interests 650,039 653,407
Shareholders' equity:
Capital stock
Supervoting common stock, par value
US$0.01 each, 30,000,000 shares
authorized; 12,328,304 shares
outstanding 813 813
Common stock, par value US$0.01 each,
50,000,000 shares authorized;
5,063,000 shares outstanding 362 362
Additional paid-in capital 618,933 618,933
Cumulative translation adjustments 39,179 39,179
Retained earnings 417,463 208,218
Total shareholders' equity 1,076,750 867,505
Total liabilities
and shareholders' equity 2,584,035 2,231,087
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 1998 and 1997
For the six months ended For the six months ended
June 30, 1998 June 30, 1997
(Amounts in thousands,
except for share data) Rmb Rmb
Sales, net 1,383,081 995,519
Cost of sales (1,005,414) (736,348)
Gross profit 377,667 259,171
Selling and administrative
expenses (121,178) (110,150)
Operating income 256,489 149,021
Equity in income of
associated company 5,450 --
Other income (expenses), net 4,860 8,356
Income before income taxes
and minority interests 266,799 157,377
Income taxes (24,108) (11,443)
Income before minority interests 242,691 145,934
Minority interests in
consolidated subsidiaries (118,925) (70,484)
Net income 123,766 75,450
Earnings per share in Rmb Rmb7.1 Rmb4.3
Earnings per share in US$ US$0.86 US$0.52
Dividend per share US$O.04 US$0.04
Weighted average number of
shares outstanding 17,391,304 17,391,304
Certain of the 1997 amounts have been reclassified to conform to the 1998
presentation.