China Zenix Auto Q4 revenue $126.3 million
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This is also up from RMB694.9 million for the third quarter of 2014.
Aftermarket sales in China decreased by 24.3% year-over-year to RMB380.2 million ($61.3 million) in the fourth quarter of 2014 compared with RMB502.5 million in the fourth quarter of 2013, but up from RMB364 million in the third quarter of 2014. The year-over-year sales decline in the fourth quarter of 2014 was mainly attributable to pricing and volume decreases as a result of intensifying competition.
Sales to the Chinese OEM market decreased by 19.8% year-over-year to RMB277.6 million ($44.7 million) in the fourth quarter of 2014 compared with RMB345.9 million in the fourth quarter of 2013, but up from RMB226.8 million in the third quarter of 2014. The year-over-year sales decrease in the fourth quarter of 2014 was mainly attributable to sluggish truck sales.
International sales decreased by 6.3% year-over-year to RMB125.9 million ($20.3 million) in the fourth quarter of 2014 compared with RMB134.3 million in the fourth quarter of 2013, but up from RMB104.1 million in the third quarter of 2014. The year-over-year decrease in international sales in the fourth quarter of 2014 was mainly due to lower sales in the Indian market, which was partially offset by increase in sales from Southeast Asian markets.
In the fourth quarter of 2014, domestic aftermarket sales, domestic OEM sales and international sales contributed 48.5%, 35.4% and 16.1% of revenue, respectively.
Tubed steel wheel sales accounted for 57.3% of 2014 fourth quarter revenue compared with 59.0% in the same quarter of 2013. The year-over-year decline in tubed steel wheel sales as a percentage of total sales was mainly due to an increase in sales of tubeless wheels and other products as a percentage of total sales.
Tubeless steel wheel sales represented 37.8% of fourth quarter revenue compared with 37.3% in the same quarter of 2013. Tubed steel wheel sales and tubeless steel wheel sales remain the main sources of revenue for the Company.
Fourth quarter gross profit was RMB112.6 million ($18.2 million), compared with RMB197.7 million in the same quarter of 2013. Gross margin was 14.4% compared with 20.1% in the fourth quarter of 2013. The year-over-year decline in gross margin was mainly attributable to price reductions in the Company's wheel products that outpaced the decline in raw material costs.
Selling and distribution costs decreased by 14.0% year-over-year to RMB62 million ($10 million) compared with RMB72.1 million in the fourth quarter of 2013. Lower selling and distribution costs resulted primarily from decreased transportation costs and lower port costs as sales volume declined. As a percentage of revenue, selling and distribution costs were 7.9% compared with 7.3% in the same quarter a year ago.
Research and development (R&D) expenses were RMB26.2 million ($4.2 million) compared with RMB24.8 million in the fourth quarter of 2013. R&D expenses as a percentage of revenue were 3.3% in the fourth quarter of 2014 compared with 2.5% in last year's fourth quarter.
Zenix Auto remains committed to developing new products and innovative solutions to address customer needs, increase wheel quality and performance, and to raise the barriers of entry.
Administrative expenses were RMB39.4 million ($6.3 million) compared with RMB36.4 million in the same quarter of 2013. The year-over-year increase in administrative expenses was mainly due to an increase in staff costs and professional service fees. As a percentage of revenue, administrative expenses were 5.0% in the fourth quarter of 2014 compared with 3.7% in the same quarter of 2013.
Loss and total comprehensive loss for the fourth quarter of 2014 was RMB13.7 million ($2.2 million) compared with profit and total comprehensive income of RMB54.4 million in the fourth quarter of 2013.
Basic and diluted loss per ADS in the fourth quarter of 2014 were RMB0.27 ($0.04), compared with basic and diluted earnings per ADS of RMB1.05 in the fourth quarter of 2013.
During the fourth quarter of 2014 and 2013, the weighted average number of ordinary shares was 206.5 million and the weighted average number of ADSs was 51.6 million.
2014 Full Year Results
Revenue for the year ended December 31, 2014, was RMB3,334.4 million ($537.4 million) compared with RMB3,802.3 million in 2013.
Aftermarket sales decreased by 13.6% to RMB1,665.2 million ($268.4 million) in 2014, and represented 49.9% of full year revenue. Sales to the Chinese OEM market decreased by 12.4% to RMB1,153.6 million ($185.9 million) and represented 34.6% of revenue.
International sales decreased by 7.5% to RMB515.6 million ($83.1 million) and represented 15.5% of revenue.
Tubed steel wheel sales declined by 14.3% to RMB1,927.6 million ($310.7 million) in 2014, and comprised 57.8% of revenue. Tubeless steel wheel sales decreased by 10.8% to RMB1,252.4 million ($201.9 million) in 2014 and comprised 37.6% of revenue.
Gross profit for the year ended December 31, 2014, was RMB589.5 million ($95 million) compared with RMB790.7 million in 2013. Gross margin was17.7% compared with 20.8% in 2013. Profit before taxation was RMB97.9 million ($15.8 million), compared with RMB275.6 million in 2013.
Profit and total comprehensive income for the year ended December 31, 2014 was RMB79.2 million ($12.8 million) compared with RMB232.7 million in 2013. Basic and diluted earnings per ordinary share and per ADS for the year ended December 31, 2014 were RMB0.38 ($0.06) and RMB1.53 ($0.25), respectively.
As of December 31, 2014, Zenix Auto had bank balances and cash of RMB557 million ($89.8 million) and fixed bank deposits with a maturity period over three months of RMB260 million ($41.9 million). Bank borrowings were RMB508 million ($81.9 million). Total equity attributable to owners of the Company was RMB2,592.1 million ($417.8 million).
For the year ended December 31, 2014, the Company recorded cash inflows from operating activities of RMB101.6 million ($16.4 million). Capital expenditures for the purchase of property, plant and equipment in 2014 were RMB47.9 million ($7.7 million). Deposits paid for acquisition of property, plant and equipment in 2014 was RMB85.6 million ($13.8 million). ■