China XD Plastics (CXDC) Reports Q4 Loss of $0.97 on Revenues of $310.5M

China XD Plastics (NASDAQ: CXDC) reported Q4 EPS of ($0.97), versus $0.20 reported last year. Revenue for the quarter came in at $310.5 million, versus $349.8 million reported last year.

Fourth Quarter 2019 Financial Highlights

• Revenue was $310.5 million, a decrease of 11.2% YoY and a decrease of 16.8% sequentially
• Gross profit was $43.7 million, a decrease of 30.0% YoY and a decrease of 27.3% sequentially
• Gross margin of 14.1%, a decrease of 370 basis points YoY and a decrease of 200 basis points sequentially
• Net loss was $65.0 million, compared to net income $13.0 million in the same period last year and net income of $17.0 sequentially
• EBITDA was negative $27.3 million, a decrease of 171.1% YoY and a decrease of 150.0% sequentially. A description of the adjustments from GAAP net loss to EBITDA is detailed in the table captioned "Reconciliation of GAAP and Non-GAAP Results" following this press release.
• Total volume shipped was 67,018 metric tons, down 46.3% YoY and a decrease of 27.2% sequentially

"Our fiscal 2019 results were consistent with the overall slow recovery of China auto industry,' said Jie Han, Chairman of the Board of Directors and Chief Executive Officer. 'The trade tension between China and United States, the stricter environmental protection standard, and larger reduction of subsidies on new energy vehicles, have generated a lot of pressure on the entire auto industry in China, resulting in depressed domestic demand. China XD has taken proactive measures to respond these changes. Since the second quarter of 2019, we have achieved revenues by increased sales of new categories of higher-end products of PA66 and PA6 produced with high-priced raw materials with higher selling price in domestic market; and sales of high-priced semi-finished goods in domestic market to accelerate inventory turnover and replenish operating funds. We are pleased to see an overall increase of 45.9% in the average RMB selling price of our products, partially offset the decreased sales volume of 18.8% for the year ended December 31, 2019. At the same time, the Company has achieved a rapid increase of customer orders in non-automobile applications, evidenced by our stable sales growth in several domestic regions."

"For 2020, the COVID-19 has caused a sharp fall in production and sales of the Chinese automotive industry, with the risk of supply disruption of some parts of the domestic automobile industry increased. As a result, China XD has responded to start producing raw materials for PPE such as goggles and masks, to help alleviate the pandemic to our communities and mitigate the negative impact of world pandemic on Chinese auto industry."

"We are committed to complete industrial project for upgrading existing equipment for 100,000 metric tons of engineering plastics by the end of second quarter of 2020, and our Qinling Road Project and Jiangnan Road Project for equipment upgrade and factory revamping by the end of the third quarter of 2020, thus bringing the production capacity in Heilongjiang Campus back to 390,000 MT. At the same time, we expect to complete additional 10 production lines our Sichuan plant by the end of the third quarter of 2020, thus to bring the total capacity of Sichuan base to 300,000 MT. Together with the production capacity ramp up in Dubai, we will continue to remain our ability to make further inroads into more specialized high-end products for various important new markets"

"We will continue to optimize our management structure and enhance our operating efficiency. And we are confident, through our cooperation with Chinese big banks to succeed Company's expansion strategy in multiple regions and sectors, and to be confident with our core market positioning and expanded platform for growth." Mr. Han concluded.

For earnings history and earnings-related data on China XD Plastics (CXDC) click here.

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