China Keli Electric Company Ltd.
TSX VENTURE : ZKL

December 02, 2015 20:19 ET

China Keli Announces Q2 2016 Results: Quarterly Year-over-Year Profit Down 107% Although Revenue Up 65% and Six Months Year-over-Year Gross Margins of Revenue Lower and Loss Recorded

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 2, 2015) - China Keli Electric Co., Ltd. (TSX VENTURE:ZKL) ("Keli" or the "Company") today announced the financial and operating results for the three and six months ended October 31, 2015.

For the three months ended October 31, 2015 ("Q2 2016"), total revenue was $6,242,922, an increase of 64.6% over Q2 2015 of $3,793,214, caused by the increase in revenue from products sales with lower gross margin. Gross profit in Q2 2016 was $1,822,125 representing 29.2% of revenue over Q2 2015 of $1,784,831, which was 47.1% of revenue. Operating expenses were $1,574,846 in Q2 2016, an increase from $1,266,189 in Q2 2015, caused by the increase of commission expenses and repair and renovation expenses. The increased financing costs of $297,222 in Q2 2016 ($252,733 in Q2 2015) further increased the total expenses. As a result, the Company recorded a net loss of $21,338 in Q2 2016, compared with a net profit of $325,551 in Q2 2015. Basic and diluted earnings per share ("EPS") were $0.000 in Q2 2016, compared with $0.004 in Q2 2015. EBITDA was $629,407 in Q2 2016, a decrease from $789,808 in Q2 2015. After accounting for an unrealized foreign exchange translation gain (loss) of ($84,806), the Company reported total comprehensive income (loss) of ($106,144) in Q2 2016, compared with total comprehensive income of $1,103,118 in Q2 2015. The Company's unrealized foreign exchange income on translation of the Company's functional currency to its reporting currency is subject to fluctuations in the exchange rate between the RMB and the Canadian dollar in each reporting period.

For the six months of FY2016, total revenue was $9,616,362, an increase of 11.3% over $8,638,926 for the equivalent six months period in FY2015. The Company recorded a net loss of $279,888 in the first six months of FY2016, compared to a profit of $456,239 in same period in FY2015. For the six months of FY2016 comprehensive net income decreased 82.1% to $242,488 over the same period $1,357,681 in FY2015.

As of October 31, 2015, the Company had total cash and cash equivalents of $628,671 compared with $405,240 as of April 30, 2015. Accounts receivable was $22,714,299 as at October 31, 2015, an increase of 36.3% compared with $16,666,048 as at April 30, 2015, which is attributed to the result of slow cash collection from the customers during the period. The Company's working capital deficit increased to negative $1,384,851 as at October 31, 2015 from negative $998,884 as at April 30, 2015.

The functional currency of the Company and its subsidiaries is Chinese Yuan (also known as "Renminbi" or "RMB"). The financial and operating results of the relevant periods have been translated into Canadian dollars. Depending on the magnitude of changes in foreign currency exchange rates, the impact on the financial and operating results may or may not be material.

Full financial results of the Company for the three and six months ended October 31, 2015 are available on SEDAR at www.sedar.com.

About China Keli Electric Company Ltd.

China Keli Electric Company Ltd. specializes in the manufacturing and installation of electrical components and equipment, including pre-assembled mini substations, electrical controllers, pressurized and vacuumed switchgears and circuit breakers.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Keli's business are more fully discussed in the Company's disclosure materials filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars unless noted otherwise.

Contact Information