China Natural Resources Reports Full Year 2022 Results

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HONG KONG, May 16, 2023 /PRNewswire/ -- China Natural Resources Inc. (NASDAQ: CHNR) (the "Company") today announced its results of operations for the year ended December 31, 2022. For the convenience of the reader, amounts in Chinese Yuan ("CNY") have been translated into United States dollars ("US$") at the rate of US$1.00 = CNY6.8979 as quoted by www.ofx.com on December 31, 2022, except as otherwise disclosed.

Mr. Wong Wah On Edward, Chairman of the Company, commented, "We delivered over 8% annual revenue growth for the full year 2022, while reducing our net loss by 59%. Given the extremely challenging conditions we have been operating in, with supply chain closures and financing hurdles, we are pleased that our team remained focus on our business strategy and continued to execute toward our long-term goals."

"We are even more excited about the business opportunities that are in front of the Company. Of greatest importance is the recently announced news of our strategic acquisition of mining rights to a lithium mine in Zimbabwe with maximum consideration contemplated to be US$1.75 billion. We have since completed our due diligence and are moving forward with what we expect to be a transformative milestone in the development of China Natural Resources. We are pleased with the favorable outcome of our due diligence investigation, and are focused on the next steps towards completion of the transaction. This is just one of the many opportunities that we are evaluating to leverage our mining expertise and sales and distribution platforms, as we continue to execute on our long-term business strategy and build value for our shareholders."

Financial Results for the Twelve Months Ended December 31, 2022

Revenue increased by CNY1.57 million (US$0.23 million) from CNY18.74 million for the year ended December 31, 2021 to CNY20.31 million (US$2.94 million) for the year ended December 31, 2022. The increase in revenues was mainly caused by the confirmed progress of services provided for construction projects commenced in the previous year.

Cost of sales decreased by CNY4.00 million (US$0.58 million) from CNY18.49 million for the year ended December 31, 2021 to CNY14.49 million (US$2.10 million) for the year ended December 31, 2022. This decrease was mainly due to the deferral in the execution of some new or ongoing projects during the first half of 2022 as a result of the then strict pandemic controls in Shanghai.

Selling and distribution expenses decreased by CNY0.22 million (US$0.03 million) from CNY0.92 million for the year ended December 31, 2021 to CNY0.70 million (US$0.10 million) for the year ended December 31, 2022. The increase was mainly due to tighter expense control efforts in 2022.

Administrative expenses increased by CNY13.88 million (US$2.01 million) from CNY22.87 million for the year ended December 31, 2021 to CNY36.75 million (US$5.33 million) for the year ended December 31, 2022. The increase was mainly caused by the option awards granted on July 14, 2022, to certain eligible individuals covering an aggregate of 8,100,000 of the Company's common shares under the 2014 Plan.

Other income/(loss) increased by CNY1.08 million (US$0.16 million) from CNY0.18 million of loss for the year ended December 31, 2021 to CNY0.90 million (US$0.13 million) of income for the year ended December 31, 2022. The increase in other income was mainly caused by other income relating to impairment reversal of other receivables, which were fully impaired and written off in prior years but collected in 2022, and other loss relating to the return of a tax refund to tax authorities in 2021.

Fair value gain/(loss) on financial instruments, net increased by CNY39.36 million (US$5.71 million) from CNY38.35 million of loss for the year ended December 31, 2021 to CNY1.01 million (US$0.15 million) of gain for the year ended December 31, 2022. The decrease was caused by the fluctuation of fair values of the Company's outstanding warrants in both years and the disposition of its holdings in Feishang Anthracite Resources Limited (FARL), a company listed on the Hong Kong Stock Exchange, in 2021.

Impairment losses/(reversal) on financial assets decreased by CNY4.40 million (US$0.64 million) from CNY3.33 million of loss for the year ended December 31, 2021 to CNY1.07 million (US$0.16 million) of reversal for the year ended December 31, 2022. The decrease was the result of an expected credit loss assessment of receivables and contract assets, due to the fact that the amount of collection of aged trade receivables related to construction contracts was relatively higher than the amount of origination of new trade receivables related to construction contracts in 2022.

Finance costs decreased by CNY0.96 million (US$0.14 million) from CNY4.36 million for the year ended December 31, 2021 to CNY3.40 million (US$0.49 million) for the year ended December 31, 2022. This was mainly due to exchange gain on the appreciation of foreign currency deposits in 2022, and decreased interest expenses on bank loans as our outstanding borrowing balance decreased.

Finance income decreased by CNY1.33 million (US$0.19 million) from CNY16.94 million for the year ended December 31, 2021 to CNY15.61 million (US$2.26 million) for the year ended December 31, 2022. The decrease in finance income was mainly due to the decrease of interest income from the service concession arrangement relating to a financing component, which arose due to a guaranteed 28-year-long collection period for construction services for the Wujiang Project, our maiden public-private partnership project undertaken by our non-wholly owned subsidiary, Shaoguan Angrui Environmental Technology Development Co., Limited.

Income tax expense increased by CNY3.72 million (US$0.54 million) from CNY2.14 million for the year ended December 31, 2021 to CNY5.86 million (US$0.85 million) for the year ended December 31, 2022. The increase was mainly caused by higher revenue and gross profit margin and the  additional recognition of deferred tax expenses in 2022.

As a result of the foregoing, our net loss decreased by CNY32.67 million (US$4.74 million), from CNY54.97 million for the year ended December 31, 2021 to CNY22.30 million (US$3.23 million) for the year ended December 31, 2022.

The Company and its subsidiaries had a CNY31.7 million (US$4.6 million) balance of cash and cash equivalents at December 31, 2022.

About China Natural Resources:

China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People's Republic of China (the "PRC"), is currently engaged in the acquisition and exploitation of mining rights in Inner Mongolia, including preliminary exploration for nickel, lead, silver and other nonferrous metal, has recently entered the wastewater treatment industry, and is actively exploring further business opportunities in the healthcare sector, natural resources sectors and other sectors.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of the U.S. federal securities laws. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding the intent, belief and current expectations of the Company, its directors or its officers with respect to the ability to locate and execute on strategic opportunities; the impact of the rising commodity prices; the potential completion of the acquisition of Williams Minerals (Pvt) Ltd ("Williams Minerals"); the satisfaction of the various conditions of the acquisition of Williams Minerals, as set forth in the definitive sale and purchase agreement (the "Sale and Purchase Agreement"); the potential presence of minerals in the Zimbabwean lithium mine; the vesting of ownership of the regions of the Zimbabwean mine and the timing thereof; the anticipated benefits of the acquisition of Williams Minerals; the level of demand for lithium and other precious minerals; and the availability of internally generated funds for the payment of operating expenses, capital expenditures and the Company's growth strategy. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Among the risks and uncertainties that could cause the Company's actual results to differ from its forward-looking statements are: uncertainties regarding the governmental, economic and political circumstances in the PRC; the impact on the Company's financial position, growth potential and business from an investment in the natural resources sector generally and in the Zimbabwean lithium mine specifically; uncertainties related to the Company's ability to identify potential partners or acquisition targets as it considers strategic alternatives; uncertainties related to the Company's ability to settle in cash the consideration due in connection with the acquisition of Williams Minerals, as contemplated by the Sale and Purchase Agreement; uncertainties associated with metal price volatility; uncertainties concerning the viability of mining and estimates of reserves at the Zimbabwean lithium mine; uncertainties associated with the issuance of and accuracy of the independent technical reports, as contemplated by the Sale and Purchase Agreement; uncertainties related to geopolitical events and conflicts, such as the conflict between Russia and Ukraine; uncertainties regarding the impact of the COVID-19 pandemic on domestic PRC and global economic conditions, demand for the mineral reserves that we may locate or extract, our workforce, whether due to illness or restrictions on movement, and on the price of our common shares; uncertainties related to possible future increases in operating expenses; the fluctuations of interest rates and foreign exchange rates; uncertainties related to the political situation between the PRC and the United States; uncertainties regarding the ability of the Public Company Accounting Oversight Board to continue to fully inspect auditors located in the PRC and Hong Kong, the implementation by the SEC of more stringent disclosure and/or other requirements for companies located in the PRC or that have operations in the PRC that are listed on exchanges in the United States, and increasing regulation by PRC government agencies of companies located in the PRC but listed elsewhere; uncertainties related to the possbilitiy that legislative or other regulatory action in the United States may result in listing standards or other requirements that, if the Company cannot meet, may result in delisting and adversely affect the Company's liquidty of the trading price of the Company's securities that are listed and traded in the United States; uncertainties related to PRC law and government control of currency conversion that may restrict the ability to transfer funds into or out of the PRC; and other risks detailed from time to time in the Company's filings with the SEC, including, without limitation, the information set forth in the Company's Annual Reports on Form 20-F under the heading "Risk Factors." When, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to future results, that expectation or belief is expressed in good faith and is believed to have a reasonable basis, but there can be no assurance that the stated expectation or belief will result or be achieved or accomplished. Except as required by law, the Company undertakes no obligation to update any forward-looking statements.

 

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 AND 2022

(Amounts in thousands, except share and per share data) 





Year Ended December 31,





2020



2021



2022



2022





CNY



CNY



CNY



US$






























Revenue



42,498



18,735



20,306



2,944


Cost of sales



(39,215)



(18,494)



(14,485)



(2,100)


Gross profit



3,283



241



5,821



844
















Selling and distribution expenses



(758)



(922)



(700)



(103)


Administrative expenses



(18,853)



(22,869)



(36,749)



(5,328)


Other income/(losses)



1,616



(183)



904



131


Fair value gain/(loss) on financial instruments, net



31,334



(38,349)



1,007



146


Impairment (losses)/reversal on financial assets



(4,162)



(3,330)



1,073



156


Finance costs



(3,749)



(4,359)



(3,395)



(492)


Finance income



15,468



16,935



15,607



2,263
















PROFIT/(LOSS) BEFORE INCOME TAX



24,179



(52,836)



(16,432)



(2,383)
















Income tax expense



(1,258)



(2,135)



(5,864)



(850)
















PROFIT/(LOSS) FOR THE YEAR



22,921



(54,971)



(22,296)



(3,233)
















ATTRIBUTABLE TO:














Owners of the Company



24,336



(48,152)



(24,623)



(3,570)


Non-controlling interests



(1,415)



(6,819)



2,327



337



















22,921



(54,971)



(22,296)



(3,233)
















EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO OWNERS

OF THE COMPANY:














Basic and diluted














- Earnings/(loss) per share



3.89



(5.91)



(3.00)



(0.44)


 

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 AND 2022

(Amounts in thousands)





Year Ended December 31,





2020



2021



2022



2022





CNY



CNY



CNY



US$






























PROFIT/(LOSS) FOR THE YEAR



22,921



(54,971)



(22,296)



(3,233)
















Other comprehensive income/(loss) that will be reclassified to profit or loss in
   subsequent periods:














Foreign currency translation adjustments of the subsidiaries



6,172



3,252



(8,094)



(1,172)


Other comprehensive (loss)/income that will not be reclassified to profit or loss in
   subsequent periods:














Foreign currency translation adjustments of the Company



(5,469)



(10,909)



9,593



1,391
















Total other comprehensive income/(loss) for the year, net of tax



703



(7,657)



1,499



219
















TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR



23,624



(62,628)



(20,797)



(3,014)
















Attributable to:














Owners of the Company



25,039



(55,809)



(23,124)



(3,351)


Non-controlling interests



(1,415)



(6,819)



2,327



337



















23,624



(62,628)



(20,797)



(3,014)


 

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2021 AND 2022

(Amounts in thousands)






December 31,






2021



2022



2022






CNY



CNY



US$


























ASSETS












NON-CURRENT ASSETS












Property, plant and equipment




715



424



61


Intangible assets




20,189



19,381



2,810


Right-of-use assets




2,351



2,993



434


Trade receivables




9,501



10,520



1,525


Contract assets




91,035



89,713



13,006


Deferred tax assets




66



-



-


Other non-current assets




10



4



1














TOTAL NON-CURRENT ASSETS




123,867



123,035



17,837














CURRENT ASSETS












Inventories




986



729



106


Trade receivables




41,526



46,760



6,779


Bills receivable




-



8,500



1,232


Contract assets




15,331



21,647



3,138


Prepayments




2,236



1,732



251


Other receivables




86,201



82,733



11,993


Other current assets




4,942



3,160



457


Cash and cash equivalents




58,359



31,695



4,595














TOTAL CURRENT ASSETS




209,581



196,956



28,551














TOTAL ASSETS




333,448



319,991



46,388















 

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)

AS OF DECEMBER 31, 2021 AND 2022

(Amounts in thousands)





December 31,





2021



2022



2022





CNY



CNY



US$
























LIABILITIES AND EQUITY






















CURRENT LIABILITIES











Trade payables



21,118



20,326



2,946


Contract liabilities



690



690



100


Other payables and accruals



12,098



16,724



2,425


Income tax payable



9,254



10,732



1,556


Provisions



-



494



72


Dividends payable



5,048



-



-


Interest-bearing loans and borrowings



3,000



3,000



435


Derivative financial liabilities



1,710



824



119


Lease liabilities



981



1,317



190


Due to related companies



5,710



3,408



494


Due to the Shareholder



14,050



7,153



1,037













TOTAL CURRENT LIABILITIES



73,659



64,668



9,374













NON-CURRENT LIABILITIES











Deferred tax liabilities



2,544



5,276



765


Lease liabilities



1,208



1,598



232


Interest-bearing loans and borrowings



74,000



71,000



10,293













TOTAL NON-CURRENT LIABILITIES



77,752



77,874



11,290













TOTAL LIABILITIES



151,411



142,542



20,664













EQUITY











Issued capital



450,782



450,782



65,351


Other capital reserves



719,110



735,319



106,600


Accumulated losses



(1,084,387)



(1,109,010)



(160,775)


Other comprehensive losses



(10,821)



(9,322)



(1,352)













EQUITY ATTRIBUTABLE TO OWNERS

OF THE COMPANY



74,684



67,769



9,824


NON-CONTROLLING INTERESTS



107,353



109,680



15,900













TOTAL EQUITY



182,037



177,449



25,724













TOTAL LIABILITIES AND EQUITY



333,448



319,991



46,388


 

The condensed consolidated statements of profit or loss of the Company for the year ended December 31, 2022 and 2021, and the condensed consolidated statements of financial position of the Company as of December 31, 2022 and December 31, 2021, have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The condensed consolidated statements of profit or loss and the condensed consolidated statements of financial position have been derived from and should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2022 contained in the Company's Annual Report on Form 20-F as filed with the Commission on May 15, 2023.

 


Source: China Natural Resources, Inc. Related Stocks: NASDAQ:CHNR

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