Brilliance China Automotive Holdings Limited Announces Interim Results
20 September 1999
Brilliance China Automotive Holdings Limited Announces Interim Results; Semi-Annual Dividend
HONG KONG, Sept. 17 -- Brilliance China Automotive Holdings
Limited (the "Company") announced today interim results for the
six months ended June 30, 1999 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"), Ningbo Yuming Machinery Industrial Company Ltd.
("Ningbo Yuming") and Xing Yuan Dong Automotive Component Co., Ltd.
("Xing Yuan Dong") in the first six months of 1999 were Rmb 1,855.8 million, a
34.2% increase from sales of Rmb 1,383.1 million for the same period in 1998.
The increase in sales was primarily attributable to the increase in the unit
sales of Shenyang Automotive's Mid-priced Minibus as well as strong sales of
the Deluxe Minibus.
Shenyang Automotive sold a total of 18,084 minibuses in the first half of
1999, a 44.8% increase over the 12,485 minibuses sold during the same period
in 1998. Shenyang Automotive sold 14,154 of its Mid-priced Minibuses in the
first six months of 1999, an increase of 63.0% over the 8,685 units sold
during the same period in 1998. Unit sales of the Deluxe Minibus increased
32.2% from 2,377 in the first six months of 1998 to 3,143 units for the same
period in 1999. Unit sales of the Standard Minibus declined 44.7% from
1,423 units in the first six months of 1998 to 787 for the same period in
1999.
Consolidated operating income for the first six months of 1999 increased
50.3% to Rmb 385.5 million from Rmb 256.5 million for the same period in 1998.
The increase was due primarily to contributions from Xing Yuan Dong and the
two component manufacturers, as well as increased sales and cost reductions
resulting from improved economies of scale in production and improved
operating efficiencies. Cost of sales as a percentage of sales declined from
72.7% in the first half of 1998 to 66.4% for the same period in 1999. Selling
and administration expenses was Rmb 237.8 million, or 12.8% of sales, in the
first half of 1999, compared with Rmb 121.2 million, or 8.8% of sales, over
the same period in 1998. The increase was primarily stemmed from increased
transportation expenses incurred during the first half of 1999 due to changes
in cost sharing arrangements with distributors.
Net income increased 115.5% to Rmb 266.7 million in the first half of 1999
from Rmb 123.8 million in the first half of 1998. Earnings per share were
US$1.85 for the first half of 1999, a 115.1% increase over the earnings of
US$0.86 per share for the first half of 1998.
Mr. Yang Rong, Chairman and President of the Company, said, "Our business
performance across the board has been the best in the history of our
operations. Led by Shenyang Automotive's unmatched growth in production and
sales of minibuses in the national market, all of our subsidiaries have
realized impressive returns on investment. As always, management will
continue to look for ways to sustain this high growth over the long term and
increase value to our shareholders."
The Company issued a dividend of one bonus share for every two shares of
the Company's common stock held by its shareholders on June 29, 1999. The
Company has further proposed an issuance of four bonus shares for each share
of the Company's common stock held by its shareholders on September 24, 1999.
This bonus share issuance is subject to approval of its shareholders in the
special general meeting to be held on September 18, 1999.
The Company adopted a resolution at a meeting of its Board of Directors on
September 13, 1999 to pay a cash dividend of US$0.027 per share of the
Company's common stock (which amount will be adjusted to take into account the
proposed issuance of four bonus shares for each share if it is approved by
shareholders at the Company's special general meeting to be held on September
18, 1999). The dividend will be paid on November 3, 1999 to holders of record
on October 15, 1999.
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 has designated a team to
be responsible for looking into the Year 2000 problem in all the Company's
software that utilizes date embedded codes. The Company, its subsidiaries and
their software suppliers completed the majority of the necessary modifications
to the identified software in the first half of 1999. The Directors anticipate
that all remaining modifications will be completed before the end 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 the leading manufacturer and distributor of minibuses in
China. In May 1998, the Company acquired an indirect interest in two
components manufacturers: 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., a Sino-foreign joint venture manufacturer of
gasoline engines for use in passenger vehicles and light duty trucks. In
October 1998, the Company established Xing Yuan Dong as its wholly owned
subsidiary to centralize and consolidate the sourcing of auto parts and
components for Shenyang Automotive. 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$1.00 = Rmb 8.28, the
rate announced by the People's Bank of China on June 30, 1999. No
representation is made that the Renminbi amounts could have been, or may now
be converted into United States dollars at that or at any other rate.
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Six months Ended June 30, 1999 and 1998
For six months endedFor six months ended
June 30, 1999 June 30, 1998
(Amounts in thousands,
except for share data) Rmb Rmb
Sales 1,855,803 1,383,081
Cost of sales 1,232,580 1,005,414
Gross profit 623,223 377,667
Selling and administrative expenses 237,772 121,178
Operating income 385,451 256,489
Equity in earnings of associated companies 18,311 5,450
Other income, net 7,622 4,860
Income before income taxes
and minority interests 411,384 266,799
Income taxes 27,345 24,108
Income before minority interests 384,039 242,691
Minority interests in consolidated
subsidiaries 117,339 118,925
Net income 266,700 123,766
Earnings per share in Rmb Rmb15.3 Rmb7.2
Earnings per share in US$ US$1.85 US$0.86
Dividend per share US$0.04 US$0.04
Weighted average number
of shares outstanding 17,391,304 17,391,304
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of June 30, 1999 and 1998
June 30, 1999 June 30, 1998
(Amounts in thousands,
except for share data) Rmb Rmb
ASSETS
Current assets:
Cash and cash equivalents 715,568 329,529
Short-term bank deposits 199,000 1,591
Trade receivables, net 483,613 423,165
Inventories 366,692 315,050
Prepayments and other current assets 404,494 297,689
Due from affiliated companies 553,327 64,937
Total current assets 2,722.694 1,431,961
Property, plant and equipment 1,061,612 649,987
Investments in associated companies 200,852 218,269
Deposits for an investment 85,564 --
Other assets 256,129 283,818
Total assets 4,326,851 2,584,035
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 890,454 172,619
Current portion of long-term loans -- 18,736
Accounts payable 362,858 332,230
Customer advance 27,233 9,496
Other payables 228,473 65,815
Accrued expenses and other
current liabilities 47,026 50,735
Taxes payable 174,404 95,502
Due to affiliated companies 229,495 103,109
Dividend payable 838 9,004
Total current liabilities 1,960,781 857,246
Long-term loans -- --
Minority interests 844,357 650,039
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
Other comprehensive income 39,179 39,179
Dedicated Capital 5,191 --
Retained earnings 857,235 417,463
Total shareholders' equity 1,521,713 1,076,750
Total liabilities and
shareholders' equity 4,326,851 2,584,035