China XD Plastics Company Limited (CXDC) has reported a 12.82 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $9.90 million, or $0.15 a share in the quarter, compared with $11.36 million, or $0.17 a share for the same period last year. Revenue during the quarter grew 10.61 percent to $237.84 million from $215.03 million in the previous year period. Gross margin for the quarter contracted 157 basis points over the previous year period to 14.62 percent. Total expenses were 91.02 percent of quarterly revenues, up from 88.58 percent for the same period last year. That has resulted in a contraction of 244 basis points in operating margin to 8.98 percent.
Operating income for the quarter was $21.35 million, compared with $24.55 million in the previous year period.
"We are pleased to report our first quarter 2017 results as they reflect our strong operating capabilities as well as the results of our strategic initiatives. Our domestic sales showed favorable year-over-year comparisons as we continued to enter new geographic markets. Our high value-added products enable better safety and performance features for our automobile manufacturing customers and have wide applications in numerous verticals as well. However, a contraction in our gross margin occurred in the quarter due to a lower gross margin from higher-end products sold in the domestic market and an increase in cost of goods sold resulting from increased depreciation attributable to the expansion of our Sichuan campus. In terms of our international sales, we suspended overseas sales to an international customer due to an account receivable balance overdue situation which will be resumed once the agreed upon terms for payment are met and all overdue balances are collected," said Jie Han, chairman of the Board of Directors and chief executive officer.
For financial year 2017, China XD Plastics Company Limited projects revenue to be in the range of $1,200 million to $1,300 million . The Company expects net income to be in the range of $85 million to $100 million.
Working capital turns negative
Working capital of China XD Plastics Company Limited has turned negative to $179.80 million on Mar. 31, 2017 from positive $166.82 million on Mar. 31, 2016. Current ratio was at 0.83 as on Mar. 31, 2017, down from 1.20 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 27 days for the quarter from 114 days for the last year period. Days sales outstanding went down to 80 days for the quarter compared with 88 days for the same period last year.
Days inventory outstanding has decreased to 81 days for the quarter compared with 173 days for the previous year period. At the same time, days payable outstanding went down to 135 days for the quarter from 147 for the same period last year.
Debt increases substantially
China XD Plastics Company Limited has witnessed an increase in total debt over the last one year. It stood at $825.63 million as on Mar. 31, 2017, up 43.65 percent or $250.89 million from $574.74 million on Mar. 31, 2016. Total debt was 38.96 percent of total assets as on Mar. 31, 2017, compared with 30.25 percent on Mar. 31, 2016. Debt to equity ratio was at 1.27 as on Mar. 31, 2017, up from 0.97 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 2.13 for the quarter from 2.25 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
