China Advanced Construction Materials
Beijing-based China ACM produces construction materials for large scale commercial, residential, and infrastructure developments. The company is primarily focused on producing and supplying a range of ready-mix concrete materials for highly technical, large scale, and environmental construction projects.
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China ACM shares slip on lower Q4 profits despite strong revenues
China Advanced Construction Materials Group (China ACM) (NASDAQ:CADC) announced Friday its fourth quarter profits slipped as it incurred higher expenses, despite strong revenues. Paired with a dim market in China, the company's shares slipped on the Nasdaq Exchange.
CEO Xianfu Han said: "In light of the recent government suspension of new and ongoing high-speed rail projects, our near-term outlook for the manufacturing services division is uncertain."
"The government is conducting ongoing quality inspections at high-speed rail construction sites across the country, which has resulted in a slowdown in overall construction. As a result, we are focused on managing our cost structure in anticipation of lower volumes from our portable plant network for the foreseeable future."
On the Nasdaq Exchange, its shares shed 2.21% Friday afternoon, to trade at $1.77.
For its fourth quarter ended June 30, the producer of ready-mix concrete for complex infrastructure projects posted net income of $6.96 million, or $0.39 per share, down 2% from $7.11 million, or $0.43 per share, a year ago.
Adjusted for changes in the fair value of its warrants, and other equity-based compensations, earnings were $5.32 million, or $0.30 per share, down less than one percent from $5.36 million, or $0.33 per share, in the same period a year ago.
Selling, general, and administrative expenses increased more than five-fold, to $9.1 million, from $1.8 million in the same period last year, driving earnings down. China ACM said the massive increase is from a $6.3 million bad debt expense, including a $2.3 million direct write-off.
Revenues, however, rose 60% to $49.3 million, from $30.9 million in the same quarter last year.
Analysts had anticipated 20-cents in earnings, on $30.11 million in sales.
Gross profits for the quarter increased to 19.6% from 10.4% a year ago, on higher demand and higher prices for its concrete products in Beijing.
For the full year, China ACM posted an adjusted net income of $16.02 million, or $0.88 per share, up 2% from $15.7 million, or $0.95 per share, a year ago. Revenues hiked 48% to $137.91 million, from $93.04 million last year.
Analysts had expected 79-cents in earnings on $118.71 million in sales for the full year fiscal 2011.
Han said: "During fiscal 2011, our volumes from our Beijing fixed plants increased as we expanded our customer base in that market."
"We also experienced increased volumes from our portable plant division that primarily services the build out of China's high-speed rail network."
Indeed, China ACM said that production volumes in the fourth quarter, both in Beijing and elsewhere, increased, with sales of the company's concrete, where it generates the bulk of its revenues, more than doubling to $41.2 million, from $17.4 million a year ago as the company expands its client base, it said.
Revenues from its manufacturing services nearly tripled to $7.9 million, from $2.8 million, as the company added several new portable plants to service its growing business pipeline.
Other China Advanced Construction Materials news
- China Advanced Construction secures 11th high speed railway contract
2010-01-27 - China Advanced Construction Materials Moves Up To NASDAQ
2009-10-28 - China Advanced Construction Materials wins contract for new French embassy
2009-10-23 - CADC adds four portable concrete plants to serve railway expansion
2009-07-29 - China ACM wins Guizhou-Guangzhou railway contract
2009-03-14
