BEIJING, April 11, 2013 /PRNewswire-FirstCall/ -- China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or "the Company"), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, today announced its unaudited financial results for the fourth quarter and twelve months ended December 31, 2012.
Mr. Amit Gupta, Chairman of China Hydroelectric, stated, "We are pleased with CHC's progress and achievements during 2012. We entered the year with the intent of recovering from the difficulties caused by an unusually dry year in 2011 in Fujian and Zhejiang provinces, and succeeded due to favorable hydrological conditions and the focus and determination of our workforce. CHC's revenue grew to record levels, and we generated meaningful cash flow, thus improving our financial health. We strive to ensure that 2013 is another year of meaningful improvement on several levels, as we strengthen our management team, optimize our operating capability, and further strengthen our balance sheet."
Dr. You Su-Lin, interim Chief Executive Officer noted, "During the quarter we exceeded our core operational goals by improving production efficiency and rationalizing costs. Combined with favorable rainfall in Fujian and Zhejiang provinces, and the impact of several tariff increases during the year, we were able to achieve record revenue. We also improved our liquidity position through the sale of the Yuheng hydroelectric project and the refinancing of $121.8 million of debt. We are working on additional non-dilutive financing opportunities and aim to resolve any remaining liquidity challenges in the near future."
General
The following table presents precipitation levels for the regions as a percentage of historical long term average for the periods indicated. Precipitation is one of the principal factors affecting the Company's revenues, profitability and cash generated by operations. Other factors include, but are not limited to: upstream reservoir conditions; the cascading effects of multiple hydroelectric power projects on a single waterway; and upstream precipitation levels in the Company's river basins. The various provinces in which the Company operates are subject to different weather patterns or systems and precipitation fluctuates from region to region and quarter to quarter. On a total portfolio basis the Company's facilities experienced below average precipitation in 2011 and above average precipitation in 2012.
Precipitation - Percentage of Long-Term Average [1][2]
Province | Q4 2012 | Q4 2011 | Fiscal | Fiscal | Fiscal | ||
Zhejiang | 168% | 117% | 134% | 70% | 130% | ||
Fujian | 211% | 111% | 128% | 62% | 114% | ||
Yunnan | 65% | 82% | 87% | 86% | N/M | ||
Total Company | 152% | 110% | 121% | 84% | 120% | ||
[1] Source: Data collected by the Company and by provincial and national meteorological recording stations
[2] The Company has refined collection of precipitation data since our last press release and believes refined collections are more representative of historical data.
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The following table presents some key comparative financial and other information (in US$ millions, except for electricity sold, effective tariff, per ADS data and percentages):
Summary Data | Q4 2012 | Q4 2011 | % Change | Fiscal Year 2012 | Fiscal Year 2011 | % | ||||||
Continuing Operations | ||||||||||||
Electricity sold (millions kWh) | 282.1 | 224.3 | 26% | 1,768.0 | 1,262.3 | 40% | ||||||
Effective tariff (RMB/kWh) | 0.29 | 0.30 | -3% | 0.33 | 0.30 | 10% | ||||||
Average effective utilization rate | 24.7% | 19.6% | 26% | 39.2% | 28.1% | 40% | ||||||
Revenues | 12.4 | 9.9 | 25% | 85.4 | 54.6 | 56% | ||||||
Gross profit | 2.7 | 1.3 | 108% | 49.6 | 23.3 | 113% | ||||||
Adjusted EBITDA(1) | 4.4 | 2.4 | 83% | 58.5 | 31.5 | 86% | ||||||
Impairment loss on long-lived assets | - | (11.6) | 100% | - | (11.6) | 100% | ||||||
Impairment loss on goodwill | - | (11.4) | 100% | - | (11.4) | 100% | ||||||
Stock-based compensation expense | (0.1) | (7.6) | 99% | (0.2) | (10.5) | 98% | ||||||
GAAP net (loss) | (8.1) | (34.3) | 76% | (1.2) | (45.4) | 97% | ||||||
GAAP net (loss) per ADS | (0.15) | (0.64) | 77% | (0.02) | (0.87) | 98% | ||||||
Non-GAAP net (loss)/gain (2) | (7.1) | (11.2) | 37% | 0.10 | (19.0) | 101% | ||||||
Non-GAAP net (loss) per ADS (2) | (0.13) | (0.21) | 38% | (0.00) | (0.36) | 100% | ||||||
Net gain/(loss) from discontinued operations | 1.1 | (0.2) | 650% | 3.9 | (0.3) | 1400% | ||||||
(1) See "Net (loss) to adjusted EBITDA reconciliation" below (2) See "GAAP net (loss) to non-GAAP net (loss) reconciliation" below
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Fourth Quarter Ended December 31, 2012 Financial and Operational Results
Revenues
Revenues, net of value added taxes, from continuing operations for the fourth quarter of 2012 were $12.4 million, an increase of 25%, or $2.5 million, from $9.9 million for the fourth quarter of 2011. This increase was principally due to better than average hydrological conditions in Zhejiang and Fujian provinces in the current quarter compared to the fourth quarter of 2011.
The Company sold 282.1 million kWh from continuing operations in the fourth quarter of 2012, an increase of 57.8 million kWh, or 26%, from 224.3 million kWh sold in the fourth quarter of 2011.
The consolidated effective utilization rate from continuing operations for the fourth quarter of 2012 was 24.7%, compared to 19.6% in the fourth quarter of 2011. The higher consolidated effective utilization rate in the current period was principally the result of above average precipitation in Zhejiang and Fujian provinces, partially offset by below average precipitation in Yunnan province.
The effective tariff for the fourth quarter of 2011 and 2012 were RMB 0.296/kWh and RMB 0.292/kWh, respectively.
Cost of Revenues
Cost of revenues for the fourth quarter of 2012 was $9.7 million, as compared to $8.6 million for the fourth quarter of 2011, primarily due to higher variable costs as a result of increased rainfall in the fourth quarter of 2012. Such variable costs primarily include (i) an increase in repairs and maintenance costs to $2.0 million in the fourth quarter of 2012 from $1.2 million in the fourth quarter of 2011, (ii) an increase in operating expense and labor cost to $1.4 million in the fourth quarter of 2012 from $1.3 million in the fourth quarter of 2011, and (iii) an increase in depreciation and amortization (non-cash expenses included in cost of revenues from continuing operations) to $5.7 million for the fourth quarter of 2012 compared to $5.5 million for the fourth quarter of 2011.
Gross Profit and Margin
Gross profit for the fourth quarter of 2012 increased 108% to $2.7 million, from $1.3 million in the prior year fourth quarter period. Gross margin for the fourth quarter of 2012 increased to 22% compared to 13% in the same period of 2011 primarily due to increased revenues and the fixed nature of certain expenses included in cost of revenues.
Operating Expenses
General and administrative expenses ("G&A expenses") for the fourth quarter of 2012 decreased 55% to $6.4 million, from $14.3 million for the fourth quarter of 2011. The decrease was due to lower non-cash employee stock-based compensation expense of $0.06 million in the fourth quarter of 2012 compared to $7.6 million in the same period in 2011 due to the unamortized cost of stock-based compensation pertaining to 2009 and 2010 stock option grants that were written off in the fourth quarter of 2011, partially offset by approximately $1.8 million in termination expenses for the Company's former senior management in the fourth quarter of 2012.
Adjusted EBITDA and EBITDA Margin
Adjusted EBITDA attributable to China Hydroelectric Corporation shareholders increased 83% to $4.4 million in the fourth quarter of 2012 compared to $2.4 million in the same period of 2011. Adjusted EBITDA margin increased to 36% for the fourth quarter of 2012 compared to 22% in the same period of 2011 due to favorable hydrological conditions and higher tariffs as previously mentioned.
Interest Expenses
Interest expenses, net, were $6.7 million during the fourth quarter of 2012 compared to $7.9 million in the same period of 2011. The decrease was primarily due to a decrease in interest payments owed to original shareholders of acquired subsidiaries.
GAAP and Non-GAAP Net Income / Loss
Net loss attributable to China Hydroelectric Corporation shareholders declined to $8.1 million in the fourth quarter of 2012 compared to net loss of $34.3 million in the same period in 2011. The fourth quarter is historically a dry season with lower revenue. We have also accrued $1.8 million termination expenses for the Company's former management.
Non-GAAP net loss was $7.1 million, or $0.13 net loss per diluted ADS, for the fourth quarter of 2012 compared to net loss of $11.2 million, or $0.21 net loss per diluted ADS, for the fourth quarter of 2011. For reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net (Loss) to Non-GAAP Net (Loss) Reconciliation."
Weighted average American depository shares ("ADSs") used in the fourth quarter of 2012 and 2011 earnings per share calculation were 54.0 million ADSs, representing 162.0 million ordinary shares, and 54.0 million ADSs, representing 162.0 million ordinary shares, respectively.
Year Ended December 31, 2012 Financial and Operational Results
Revenues
Revenues, net of value added taxes, from continuing operations for the year ended December 31, 2012 were $85.4 million, an increase of 56%, or $30.8 million, from $54.6 million for the year ended December 31, 2011. This increase was principally due to better than average hydrological conditions in Zhejiang and Fujian provinces in the year 2012 compared to 2011 and a higher effective tariff rate due to the tariff increases at some of the projects in Fujian and Yunnan provinces.
The Company sold 1,768.0 million kWh from continuing operations in the year ended December 31, 2012, an increase of 505.7 million kWh, or 40%, from 1,262.3 million kWh sold in the year ended December 31, 2011.
The consolidated effective utilization rate from continuing operations for the year ended December 31, 2012 was 39.2%, compared to 28.1% in the year ended December 31, 2011. The higher consolidated effective utilization rate was principally the result of above average precipitation in Zhejiang and Fujian provinces compared to below average precipitation in 2011, offset by below average precipitation in Yunnan province.
The effective tariff increased from RMB 0.30/kWh in 2011 to RMB 0.33/kWh in the year ended December 31, 2012. The increase is attributed to the tariff increases the Company has received, and higher revenue contribution from projects located in Fujian and Zhejiang provinces, where tariffs are higher than in Yunnan province.
Cost of Revenues
Cost of revenues for the year ended December 31, 2012 was $35.8 million, as compared to $31.3 million for the year ended December 31, 2011, primarily due to higher variable costs as a result of more favorable rainfall in the year 2012 as well as corresponding increases in maintenance expenses. The increases include primarily: (i) an increase in repair and maintenance costs to $3.3 million in 2012 from $2.3 million in 2011, (ii) an increase in operating and labor costs to $7.2 million in 2012 from $5.5 million in 2011, (iii) an increase in depreciation and amortization, non-cash expenses from continuing operations to $22.6 million in 2012, as compared to $21.6 million in 2011.
Gross Profit and Margin
Gross profit for the year ended December 31, 2012 increased 113% to $49.6 million, from $23.3 million in the year ended December 31, 2011. Gross margin for the year ended December 31, 2012 was 58% compared to 43% in the same period of 2011 primarily due to increased revenues and the fixed nature of certain expenses included in cost of revenues.
Operating Expenses
G&A expenses for the year ended December 31, 2012 decreased to $20.3 million, or 24% of revenues, compared to $28.9 million, or 53% of revenues for the year ended December 31, 2011. Stock-based compensation expenses were $0.2 million in 2012 compared to $10.5 million in 2011 as a result of the unamortized cost of stock-based compensation pertaining to 2009 and 2010 stock option grants that were written off in the fourth quarter of 2011, offset by non-recurring costs related to the Extraordinary General Meeting of shareholders ("EGM") of approximately $1.6 million and termination expenses of approximately $1.8 million for the company's former senior management.
Adjusted EBITDA and EBITDA Margin
Adjusted EBITDA attributable to China Hydroelectric Corporation shareholders increased 86% to $58.5 million for the year ended December 31, 2012 from $31.5 million for the year ended December 31, 2011. Adjusted EBITDA margin increased to 65% for the year ended December 31, 2012 compared to 53% in the same period of 2011 due to the effect of favorable hydrological factors in Zhejiang and Fujian provinces.
Interest Expenses
Interest expenses, net, were $28.0 million during the year ended December 31, 2012 compared to $24.7 million in the same period of 2011. The increase was primarily due to an increase in interest payments on loans from unrelated parties carried forward from 2011.
GAAP and Non-GAAP Profit/Loss
Net loss attributable to China Hydroelectric Corporation shareholders was $1.2 million for the year ended December 31, 2012 compared to a net loss of $45.4 million in the same period in 2011 principally due to more favorable hydrological conditions and a gain from the sale of the Company's Yuanping hydroelectric power project, partially offset by the accrual of EGM-related costs and executive-level termination costs. For the year ended December 31, 2011, the Company recorded impairment losses on long-lived assets and impairment loss on goodwill of $11.6 million and $11.4 million, respectively.
The Company recorded a non-GAAP net gain of $0.1 million, or $0.00 per ADS, for the year ended December 31, 2012 compared to net loss of $19.0 million, or ($0.36) per ADS, for the year ended December 31, 2011. For reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net (Loss) to Non-GAAP Net (Loss) Reconciliation."
Weighted average ADSs used in the year ended December 31, 2012 and 2011 earnings per share calculation were 54.0 million ADSs, representing 162.0 million ordinary shares, and 52.2 million ADSs, representing 156.5 million ordinary shares, respectively.
Liquidity
Over the course of 2012, the company reduced its working capital deficiency by 42% to $81 million, from $138.7 million at the close of 2011. The Company raised $121.8 million through borrowings from banks and other institutions. In addition, the company generated consideration of RMB 279.0 million ($44.3 million) by entering a Share Transfer Agreement with a third party to sell Yuheng, a 30 megawatt project located in Fujian province. The consideration includes assumption of debt by the purchaser. Cash flow improved during the year due to the favorable revenue effect of above-average precipitation, and the cost reduction efforts initiated in the fourth quarter of 2012.
Investors should expect the company to have a working capital deficit in the foreseeable future, due to the use of leverage to finance the construction and acquisition of hydroelectric projects. The Company regularly raises funds through various means, such as new borrowings from banks and other non-financial institutions. New borrowings are used for multiple purposes, such as daily operating liquidity, to fund new projects or acquisitions, and to refinance existing short-term loans into longer-term debt.
Historically, the Company relied on the ready availability of credit in China to fund its operations and expansion. Commencing in 2011 and extending into 2012, the Company's ability to obtain financing from its principal lenders in China was constrained by restrictions on bank lending imposed by the central government in an effort to contain inflation. The Company has started exploring wider forms of financing since Q4 2012 and is currently in various stages of negotiations with a number of financial institutions that could provide refinancing packages to extend the duration of the company's debt obligations.
Management remains confident in the company's ability to secure capital in order to fund its liquidity needs, debt obligations and growth plans, but obtaining financing cannot be guaranteed. In the event that CHC fails to raise funds sufficient to meet its liquidity needs, the company may be forced to substantially curtail its operations or otherwise take measures that would materially and adversely affect its current operations and business prospects.
Business Updates
The following table shows the projects acquired and sold in 2011 and 2012.
Project Name | Date Acquired/(Sold) | Capacity | ||
Dazhaihe Acquisition (100% interest) | April 10, 2011 | 15.0 MW | ||
Yuanping Sale (100% interest) | (March 2, 2012) | (16.0 MW) | ||
Yuheng Sale(100% interest) | (October 31, 2012) | (30.0 MW) |
The sale of the Yuanping and Yuheng power projects provided the Company with a gain of $1.4 million and $1.4 million, net of taxes, respectively.
First Quarter 2013 Precipitation Update
Subject to an update on detailed precipitation changes of the first quarter of 2013 in our next quarter press release, regional precipitation imbalances continued into the first quarter 2013. Yunnan continued to face drought conditions and Fujian and Zhejiang experienced at- or above-average levels of precipitations.
Non-GAAP Net (Loss) Figures
Non-GAAP net (loss) for the year ended December 31, 2011 and 2012 and the fourth quarter of 2011 and 2012, excludes the following non-cash charges: stock-based compensation expenses, exchange gains or losses and the change in fair value of warrant liabilities. A reconciliation of GAAP and non-GAAP items is provided in the table entitled "GAAP Net (Loss) to Non-GAAP Net (Loss) Reconciliation."
Net Income to Adjusted EBITDA Reconciliation
Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization and excluding certain non-cash charges, including: stock-based compensation expenses, exchange losses, change in fair value of warrant liabilities, provision for impairment allowance for doubtful accounts on amount due from related party and prepayments and other current assets, impairment loss on long-lived assets, and impairment loss on goodwill. For further details, see the table entitled "Net income/(loss) to adjusted EBITDA reconciliation."
Conference Call
China Hydroelectric will host a conference call at 6:00 am (Pacific) /9:00 am (Eastern) / 9:00 pm (Beijing/Hong Kong) on Thursday, April 11, 2013 to discuss its fourth quarter and full year 2012 financial results and recent business activities. To access the live teleconference, please dial (US) +1-888-417-8516 or (International) +1-719-457-1512, and enter pass code 4663764. This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link: http://public.viavid.com/index.php?id=104110, or at ViaVid's website at http://viavid.com.
A playback will be available through April 25, 2013, by dialing (US) +1-877-870-5176 or (International) +1-858-384-5517 and entering the pass code 4663764.
About China Hydroelectric Corporation
China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or "the Company") is an owner, developer and operator of small hydroelectric power projects in the People's Republic of China. Through its geographically diverse portfolio of operating assets, the Company generates and sells electric power to local power grids. The Company's primary business is to identify, evaluate, acquire, develop, construct and finance hydroelectric power projects. The Company currently owns 25 operating hydropower stations in China with total installed capacity of 517.8 MW, of which it acquired 21 operating stations and constructed four. These hydroelectric power projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan. Hydropower is an important factor in meeting China's electric power needs, accounting for approximately 22% of total nation-wide capacity.
For further information about China Hydroelectric Corporation, please visit the Company's website at http://www.chinahydroelectric.com.
Cautionary Note Regarding Forward-looking Statements and Weather Data
Statements contained herein that address operating results, performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. The forward-looking statements include, among other things, statements relating to the Company's business strategies and plan of operations, the Company's ability to acquire hydroelectric assets, the Company's capital expenditure and funding plans, the Company's operations and business prospects, projects under development, construction or planning, the Company's ability to meet its short-term liquidity needs, the availability of restructuring measure or of lending by financing sources, including banks in China, the regulatory environment, and the business outlook for 2013. The forward-looking statements are based on the Company's current expectations and involve a number of risks, uncertainties and contingencies, many of which are beyond the Company's control, which may cause actual results, performance or achievements to differ materially from those anticipated. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Among the factors that could cause actual results to materially differ include: supply and demand changes in the electric markets, changes in electricity tariffs, hydrological conditions, the Company's relationship with and other conditions affecting the power grids we service, the Company's production and transmission capabilities, availability of sufficient and reliable transmission resources, our plans and objectives for future operations and expansion or consolidation, interest rate and exchange rate changes, the effectiveness of the Company's cost-control measures, the Company's liquidity and financial condition, environmental laws and changes in political, economic, legal and social conditions in China, the availability of financing from lenders in China due to bank restrictions or otherwise, and other factors affecting the Company's operations that are set forth in the Company's Annual Report on Form 20-F for the year ended December 31, 2012 to be filed with the Securities and Exchange Commission (the "SEC") on or about April 10, 2013 and in the Company's future filings with the SEC. Unless required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This release also contains statistical data and estimates that we obtained from provincial and national meteorological recording stations. Although we believe that this data is reliable and consistent with our experience, we have not independently verified it.
About Non-GAAP Financial Measures
To supplement China Hydroelectric consolidated financial results presented in accordance with GAAP, China Hydroelectric uses non-GAAP net income and adjusted EBITDA, which are non-GAAP financial measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Net (loss) to adjusted EBITDA reconciliation" and "GAAP Net (Loss) to Non-GAAP Net (Loss) Reconciliation" below.
China Hydroelectric believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain expenses that may not be indicative of its operating performance and financial condition from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to China Hydroelectric historical performance and liquidity. China Hydroelectric has computed its non-GAAP financial measures using methods consistent with the Company's annual report on Form 20-F. We believe these non-GAAP financial measures are useful for investors because they permit greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that they exclude certain charges that have been and may continue for the foreseeable future to be significant expenses in the Company's results of operations.
Statement Regarding Unaudited Financial Information
The financial information set forth in this press release is unaudited and subject to adjustments. Adjustments to the financial statements may be identified when our annual financial statements are prepared and audit work is performed for the year end audit, which could result in significant differences from this unaudited financial information.
For further information, please contact:
China Hydroelectric Corporation
Scott Powell
ICR, LLC
William Zima |
James Hull
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CHINA HYDROELECTRIC CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In US$ 000's, except for share and per share data)
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Three Months Ended | Year Ended | ||||||||
December 31, | December 31, | December 31, | December 31, | ||||||
Continuing Operations: | |||||||||
Revenues | 12,375 | 9,912 | 85,388 | 54,597 | |||||
Cost of revenues | (9,667) | (8,615) | (35,795) | (31,314) | |||||
Gross profit | 2,708 | 1,297 | 49,593 | 23,283 | |||||
Operating expenses | |||||||||
General and administrative expenses | (6,390) | (14,324) | (20,348) | (28,896) | |||||
Impairment loss on long-lived assets | - | (11,590) | - | (11,590) | |||||
Impairment loss on goodwill | - | (11,388) | - | (11,388) | |||||
Total operating expenses | (6,390) | (37,302) | (20,348) | (51,874) | |||||
Operating (loss) income | (3,682) | (36,005) | 29,245 | (28,591) | |||||
Interest income | 64 | 43 | 84 | 101 | |||||
Interest expense | (6,733) | (7,923) | (28,070) | (24,757) | |||||
Changes in fair value of warrant liabilities | (43) | 632 | (399) | 951 | |||||
Exchange (loss) gain | (40) | (109) | 28 | (851) | |||||
Other income (loss), net | 475 | (415) | 507 | (334) | |||||
(Loss) income before income tax expenses | (9,959) | (43,777) | 1,395 | (53,481) | |||||
Income tax expense | 709 | 381 | (6,451) | (1,527) | |||||
Net (loss) from continuing operations | (9,250) | (43,396) | (5,056) | (55,008) | |||||
Net income(loss) from discontinued operations | 1,138 | (193) | 3,907 | (282) | |||||
Net(loss) | (8,112) | (43,589) | (1,149) | (55,290) | |||||
Net loss (income) attributable to non-controlling interests | 48 | 9,259 | (94) | 9,901 | |||||
Net (loss) gain attributable to China Hydroelectric Corporation shareholders | (8,064) | (34,330) | (1,243) | (45,389) | |||||
- Continuing operations | (9,202) | (34,137) | (5,150) | (45,107) | |||||
- Discontinued operations | 1,138 | (193) | 3,907 | (282) | |||||
Other Comprehensive income (loss), net of taxes | |||||||||
Foreign currency translation adjustments | 2,004 | 2,890 | (1,413) | 20,394 | |||||
Defined benefit pension and postretirement plans | 33 | (33) | 33 | (33) | |||||
Other comprehensive income (loss) | 2,037 | 2,857 | (1,380) | 20,361 | |||||
Comprehensive (loss) | (6,075) | (40,732) | (2,529) | (34,929) | |||||
Less: comprehensive loss (income) attributable to | 65 | 8,944 | (85) | 9,586 | |||||
Comprehensive (loss) attributable to CHC shareholders | (6,010) | (31,788) | (2,614) | (25,343) | |||||
GAAP net(loss) per ADS - basic and diluted | (0.15) | (0.64) | (0.02) | (0.87) | |||||
From continuing operation | (0.17) | (0.64) | (0.09) | (0.86) | |||||
From discontinued operation | 0.02 | 0.00 | 0.07 | (0.01) | |||||
GAAP net (loss) per share - basic and diluted | (0.05) | (0.21) | (0.01) | (0.29) | |||||
From continuing operation | (0.06) | (0.21) | (0.03) | (0.29) | |||||
From discontinued operation | 0.01 | 0.00 | 0.02 | 0.00 | |||||
Weighted average American Depository Shares - basic and diluted | 53,996,366 | 53,993,439 | 53,996,366 | 52,168,359 | |||||
Weighted average ordinary shares - basic and diluted | 161,989,097 | 161,980,316 | 161,989,097 | 156,505,076 | |||||
CHINA HYDROELECTRIC CORPORATION GAAP NET (LOSS) TO NON-GAAP NET (LOSS) RECONCILIATION (In US$ 000's)
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Three Months Ended | Year Ended | |||||||
December 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | |||||
Net (loss) attributable to CHC shareholders | (8,064) | (34,330) | (1,243) | (45,389) | ||||
Non-GAAP adjustments: | ||||||||
Stock-based compensation expense (1) | 59 | 7,621 | 166 | 10,479 | ||||
Exchange (gain) loss | 40 | 109 | (28) | 851 | ||||
Change in fair value of warrant liabilities(2) | 43 | (632) | 399 | (951) | ||||
Bad debt | 792 | 1,256 | 792 | 1,256 | ||||
Assets impairment loss | - | 4,984 | - | 4,984 | ||||
Goodwill impairment loss | - | 9,795 | - | 9,795 | ||||
Non-GAAP net (loss)/gain | (7,130) | (11,197) | 86 | (18,975) | ||||
Non-GAAP net (loss) per ADS - basic and diluted (3) | (0.13) | (0.21) | 0.00 | (0.36) | ||||
From continuing operation | (0.15) | (0.21) | (0.07) | (0.35) | ||||
From discontinued operation | 0.02 | 0.00 | 0.07 | (0.01) | ||||
Non-GAAP net (loss) per ordinary share - basic and diluted | (0.04) | (0.07) | 0.00 | (0.12) | ||||
From continuing operation | (0.05) | (0.07) | (0.02) | (0.12) | ||||
From discontinued operation | 0.01 | 0.00 | 0.02 | 0.00 | ||||
Weighted average American depository shares - basic and diluted | 53,996,366 | 53,993,439 | 53,996,366 | 52,168,359 | ||||
Weighted average ordinary shares - basic and diluted | 161,989,097 | 161,980,316 | 161,989,097 | 156,505,076 | ||||
(2) Warrant liabilities Related Items: We provide non-GAAP information relative to the change in fair value of warrant liabilities. We include the change in fair value of warrant liabilities in our GAAP financial measures in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging ("FASB ASC Topic 815"). Because of varying available valuation methodologies, and subjective assumptions, which affect the calculations of the change in fair value of warrant liabilities, we believe that the exclusion of the change in fair value of warrant liabilities allows for more accurate comparisons of our operating results to our peer companies. Because of the characteristics of warrant liabilities, management excludes the change in fair value when analyzing the organization's business performance. We also believe that presentation of such non-GAAP information is important to enable readers of our financial statements to compare current period results with future periods.
(3) The Company's American depository shares ("ADS") convert to ordinary shares at a rate of one ADS to three ordinary shares.
(4) All the reconciliation items are attributed to China Hydroelectric Corporation Shareholders.
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CHINA HYDROELECTRIC CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In US$ 000's)
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As of December 31, | As of December 31, | ||
2012 | 2011 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 13,138 | 8,391 | |
Accounts receivable (net of allowance for doubtful accounts of nil as of December 31, 2011 and 2012) | 5,772 | 4,246 | |
Notes receivable | 1,877 | - | |
Deferred tax assets | 1,659 | 1,799 | |
Amounts due from related parties(net of allowance for doubtful accounts of US$1,334 and | 86 | - | |
Prepayments and other current assets (net of provision for impairment allowance of US$714 and | 14,150 | 2,999 | |
Assets classified as held-for-sale | - | 21,693 | |
Total current assets | 36,682 | 39,128 | |
Non-current assets: | |||
Property, plant and equipment, net | 548,511 | 580,964 | |
Land use right, net | 48,640 | 50,666 | |
Intangible assets, net | 4,660 | 5,788 | |
Goodwill | 112,481 | 135,651 | |
Deferred tax assets | 1,329 | 1,767 | |
Other non-current assets | 2,013 | 951 | |
Total non-current assets | 717,634 | 775,787 | |
TOTAL ASSETS | 754,316 | 814,915 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | 3,124 | 5,251 | |
Short-term loans | 21,676 | 20,881 | |
Current portion of long-term loans | 35,537 | 51,651 | |
Amounts due to related parties | 12,705 | 12,174 | |
Accrued expenses and other current liabilities | 43,825 | 75,002 | |
Deferred tax liabilities | - | 536 | |
Warrant liabilities | 839 | 440 | |
Liabilities directly associated with the assets classified as held-for-sale | - | 11,920 | |
Total current liabilities | 117,706 | 177,855 | |
Non-current liabilities: | |||
Long term loans | 212,970 | 215,382 | |
Deferred tax liabilities | 24,345 | 26,563 | |
Other non-current liabilities | 6,780 | 237 | |
Total non-current liabilities | 244,095 | 242,182 | |
TOTAL LIABILITIES | 361,801 | 420,037 | |
Shareholders' equity | |||
Ordinary shares (par value US$0.001 per share, 400,000,000 shares authorized as of December 31, 2011 and 2012; 161,989,097 shares issued and outstanding as of and December 31, 2011 and 2012) | 162 | 162 | |
Additional paid in capital | 509,665 | 509,499 | |
Accumulated other comprehensive income | 41,597 | 42,968 | |
Accumulated deficit | (159,472) | (158,229) | |
Total China Hydroelectric Corporation shareholders' equity | 391,952 | 394,400 | |
Non-controlling interests | 563 | 478 | |
TOTAL SHAREHOLDER'S EQUITY | 392,515 | 394,878 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 754,316 | 814,915 | |
CHINA HYDROELECTRIC CORPORATION NET (LOSS) TO ADJUSTED EBITDA RECONCILIATION
| |||||||||
Three Months Ended | Year Ended | ||||||||
December 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | ||||||
Net (loss) attributable to China Hydroelectric | (8,064) | (34,330) | (1,243) | (45,389) | |||||
Interest expenses, net | 6,450 | 7,674 | 27,145 | 23,710 | |||||
Other non-cash charges, including exchange loss, change in fair value of warrant liabilities, and stock-based compensation expense | 142 | 7,098 | 537 | 10,379 | |||||
Income tax expenses | (647) | (340) | 6,295 | 1,556 | |||||
Interest expenses, income tax expenses, depreciation and amortization related to discontinued operations | 139 | 1,043 | 2,743 | 3,974 | |||||
Provision for impairment allowances for doubtful accounts on amount due from related party and prepayments and other current assets | 792 | 1,256 | 792 | 1,256 | |||||
Impairment loss on long-lived assets | - | 4,984 | - | 4,984 | |||||
Impairment loss on goodwill | - | 9,795 | - | 9,795 | |||||
Depreciation of property, plant and equipment and amortization of land use rights and intangible assets | 5,627 | 5,211 | 22,222 | 21,225 | |||||
EBITDA, attributable to China Hydroelectric Corporation shareholders, as adjusted | 4,439 | 2,391 | 58,491 | 31,490 | |||||
EBITDA margin attributable to China Hydroelectric Corporation shareholders, as adjusted | 36% | 22% | 65% | 53% | |||||
| |||||||||
CHINA HYDROELECTRIC CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| ||||||
Year Ended | ||||||
December 31, 2012 | December 31, 2011 | |||||
Cash flows from operating activities: | ||||||
Net (loss) | (1,149) | (55,290) | ||||
Adjustments to reconcile net (loss) to net cash generated from operating activities: | ||||||
Depreciation of property, plant and equipment and amortization of land use | 23,780 | 23,341 | ||||
Impairment loss on goodwill | - | 11,388 | ||||
Impairment loss on long-lived assets | - | 11,590 | ||||
Deferred income taxes | (163) | (485) | ||||
Changes in fair value of warrant liabilities | 399 | (951) | ||||
Amortization of debt issuance costs | 191 | 19 | ||||
Authorization of government grant | (3) | (3) | ||||
Stock-based compensation expense | 166 | 10,479 | ||||
Loss from disposal of property, plant and equipment | 508 | 266 | ||||
Exchange (gain)loss | (28) | 851 | ||||
Gain from disposal of discontinue operation | (2,767) | - | ||||
Gain from extinguishment of amounts due to original shareholders of | (462) | - | ||||
Provision for impairment allowance on prepayments and other current assets | 843 | 696 | ||||
Provision for impairment allowance on doubtful accounts on amount due | - | 1,302 | ||||
Net pension cost recognized | 33 | 173 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (1,797) | 242 | ||||
Notes receivable | (1,874) | - | ||||
Prepayments and other current assets | (463) | 310 | ||||
Other non-current assets | 779 | (344) | ||||
Accounts payable | (345) | (42) | ||||
Amounts due to related parties | (2) | - | ||||
Other non-current liabilities | 6,578 | 5 | ||||
Accrued expenses and other current liabilities | (1,524) | (1,903) | ||||
Net cash provided by operating activities | 22,700 | 1,644 | ||||
Cash flows from investing activities: | ||||||
Acquisition of subsidiaries, net of cash acquired | (8,923) | (19,330) | ||||
Advances to an acquired business prior to the acquisition date | - | - | ||||
Proceeds from the disposal of subsidiaries | 20,212 | - | ||||
Cash deposit for potential acquisitions | - | (696) | ||||
Acquisition of property, plant and equipment | (7,091) | (1,490) | ||||
Proceeds from disposal of property, plant and equipment | 35 | 112 | ||||
Payment to contractors for construction projects | (6,931) | (3,330) | ||||
Loans to a related party | (86) | - | ||||
Net cash used in investing activities | (2,784) | (24,734) | ||||
Cash flows from financing activities: | ||||||
Purchase of subsidiary shares from non-controlling interests | - | (1,204) | ||||
Proceeds from short-term loans | 28,070 | 23,066 | ||||
Proceeds from long-term loans | 72,947 | 45,823 | ||||
Proceeds from loans from related parties | 572 | 1,263 | ||||
Proceeds from loans from third party | 20,161 | 17,456 | ||||
Proceeds from exercised warrants | - | 10,036 | ||||
Payment of debt issuance costs | (704) | - | ||||
Repayment of loans from related party | (69) | - | ||||
Repayment of loans from third party | (38,136) | (10,637) | ||||
Repayment of short-term loans | (28,051) | (20,889) | ||||
Repayment of long-term loans | (69,986) | (66,955) | ||||
Net cash used in financing activities | (15,196) | (2,041) | ||||
Net increase (decrease) in cash and cash equivalents | 4,720 | (25,131) | ||||
Effect of changes in exchange rate on cash and cash equivalents | 16 | 76 | ||||
Cash and cash equivalents at the beginning of the year | 8,402 | 33,457 | ||||
Cash and cash equivalents at the end of the year | 13,138 | 8,402 | ||||
