China Automotive Systems Inc (CAAS) has reported a 32.51 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $5.68 million, or $0.18 a share in the quarter, compared with $4.29 million, or $0.13 a share for the same period last year.
Revenue during the quarter grew 4.16 percent to $94.63 million from $90.84 million in the previous year period. Gross margin for the quarter expanded 360 basis points over the previous year period to 21.12 percent. Total expenses were 93.97 percent of quarterly revenues, down from 94.55 percent for the same period last year. This has led to an improvement of 58 basis points in operating margin to 6.03 percent.
Operating income for the quarter was $5.70 million, compared with $4.95 million in the previous year period.
Mr. Qizhou Wu, the chief executive officer of CAAS, commented, "We are encouraged to see all of our subsidiaries’ operations achieved growth in the third quarter of 2016 despite continuing lackluster growth in the Chinese economy. We continued to grow our electric power steering (“EPS”) business which grew by 26.1% and represented 27.0% of net sales compared with 22.4% in the same period last year. We remain optimistic about our EPS business and continue to expand our product portfolio and production capabilities. Even our traditional hydraulic steering products reversed its declining trend and registered an increase.”
Operating cash flow drops significantly
China Automotive Systems Inc has generated cash of $13.08 million from operating activities during the nine month period, down 45.61 percent or $10.97 million, when compared with the last year period.
The company has spent $46 million cash to meet investing activities during the nine month period as against cash outgo of $15.28 million in the last year period. It has incurred net capital expenditure of $26.71 million on net basis during the nine month period, up 9.24 percent or $2.26 million from year ago period.
Cash flow from financing activities was $3.55 million for the nine month period, up 160.72 percent or $2.19 million, when compared with the last year period.
Cash and cash equivalents stood at $39.06 million as on Sep. 30, 2016, down 48.65 percent or $37 million from $76.06 million on Sep. 30, 2015.
Working capital declines
China Automotive Systems Inc has witnessed a decline in the working capital over the last year. It stood at $172.24 million as at Sep. 30, 2016, down 11.01 percent or $21.31 million from $193.55 million on Sep. 30, 2015. Current ratio was at 1.58 as on Sep. 30, 2016, down from 1.66 on Sep. 30, 2015.
Days sales outstanding went up to 270 days for the quarter compared with 263 days for the same period last year.
Days inventory outstanding has decreased to 46 days for the quarter compared with 83 days for the previous year period.
Debt comes down
China Automotive Systems Inc has recorded a decline in total debt over the last one year. It stood at $40.61 million as on Sep. 30, 2016, down 9.72 percent or $4.37 million from $44.98 million on Sep. 30, 2015. Long-term debt stood at $0.67 million as on Sep. 30, 2016. Total debt was 6.63 percent of total assets as on Sep. 30, 2016, compared with 7.50 percent on Sep. 30, 2015. Debt to equity ratio was at 0.13 as on Sep. 30, 2016, down from 0.15 as on Sep. 30, 2015. Interest coverage ratio improved to 28.37 for the quarter from 9.88 for the same period last year.
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