JINJIANG, China, Aug. 18, 2015 /PRNewswire/ -- China Ceramics Co., Ltd. (NASDAQ Global Market: CCCL) ("China Ceramics" or the "Company"), a leading Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings, today announced financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Highlights

· Revenue was RMB 260.0 million (US$ 41.9 million), down 3.2% from the second quarter of 2014

· Gross profit was RMB 35.8 million (US$ 5.8 million), up 47.9% from the second quarter of 2014

· Plant utilization was 47% as compared to 60% in the second quarter of 2014

· Net profit was RMB 19.2 million (US$ 3.1 million) as compared to net profit of RMB 0.7 million in the second quarter of 2014.

· EBITDA (earnings before interest, taxes, depreciation and amortization) was RMB 44.3 million (US$ 7.1 million), up 107.0% from the second quarter of 2014.

· Unrestricted cash at June 30, 2015 was RMB 255.9 million (US$ 41.3 million), or RMB 12.52 (US$ 2.02) per share.

"We reported stable cash flow in the second quarter despite the challenging operating environment in China's real estate and construction markets," said Jiadong Huang, Chairman and Chief Executive Officer of China Ceramics. "While our top-line was marginally lower as compared to the year-ago quarter, continued market acceptance of our product pricing enabled us to report a 47.9% increase in gross profit. Further, the absence of several one-time expenses incurred in the year-ago quarter resulted in a more than doubling of EBITDA to $7.1 million versus the year-ago quarter.

"However, customer demand shrunk in the quarter as seen by the 8.7% decline in sales volume from the year ago quarter, which follows the first quarter's 5.7% year-over-year decline in customer demand. Given the overall market slowdown in our sector this year, we may need to engage in more intensive marketing and therefore incur additional selling expenses in the periods ahead to maintain market share as well as to sustain the current quarter's strong product pricing.

"In the second quarter, we utilized plant production facilities capable of producing 34 million square meters of ceramic tiles per year out of our total annual production capacity of 72 million square meters of ceramic tiles. This was a 20.9% decrease over what was utilized during this period last year. We hope to bring additional capacity online going forward as business conditions improve.

"Despite periods of short term slowing and likely difficult market conditions ahead, we continue to believe that the long-term fundamentals for growth in the real estate and construction industries continue to be in place. In addition, we believe that an important element of our success is our ability to adapt to market conditions and to continue to provide optimal customer-centric solutions to the marketplace. While our business sector continues to be highly competitive, our brand name recognition and reputation for quality and service has enabled us to raise and maintain the average selling price of our products over the past two years. We look for market conditions to eventually improve and we intend to continue to develop closer relationships with the larger property developers and transition our product mix towards better performing, higher margin ceramic tiles," concluded Chairman and Chief Executive Officer Jiadong Huang.

Second Quarter 2015 Results

Revenue for the second quarter ended June 30, 2015 was RMB 260.0 million (US$ 41.9 million), a decrease of 3.2% from RMB 268.6 million for the second quarter ended June 30, 2014. The year-over-year decrease in revenue was due to a 8.7% decrease in sales volume to 8.4 million square meters of ceramic tiles in the second quarter of 2015 from 9.2 million square meters in the same quarter last year, partially offset by a 6.5% increase in the average selling price to RMB 31.0 (US$ 5.0) per square meter in the second quarter of 2015 from RMB 29.1 per square meter in the same quarter last year. From July 1, 2014, the price for all of our products was adjusted up by 5%-10%.

Gross profit for the second quarter ended June 30, 2015 was RMB 35.8 million (US$ 5.8 million), an increase of RMB 11.6 million or 47.9% from RMB 24.2 million for the second quarter ended June 30, 2014. The gross profit margin was 13.8% for the second quarter ended June 30, 2015, as compared to 9.0% for the second quarter ended June 30, 2014. The year-over-year improvement in gross profit margin was primarily driven by a 6.5% increase in the average selling price.

Selling and distribution expenses for the second quarter ended June 30, 2015 were RMB 2.7 million (US$ 0.4 million), down 52.6% from RMB 5.7 million in the second quarter of 2014. The year-over-year decrease in selling and distribution expenses was primarily due to a decrease in advertisement expenses.

Realized and unrealized fair value loss on derivative financial instruments for the second quarter ended June 30, 2015 was nil, as compared to RMB 3.0 million in the second quarter of 2014. During the second quarter of 2013 and the first quarter of 2014, we entered into certain foreign currency transaction agreements with Taishin International Bank for investment purposes. In July 2014, our Chief Executive Officer (who is also the Company's largest shareholder) and an affiliate of our Chief Executive Officer agreed to assume these agreements. As a result, after July 31, 2014 we were no longer required to fund any losses related to these agreements and neither suffered any future liabilities arising under those agreements nor realized any benefits arising under those agreements.

Other expenses for the second quarter ended June 30, 2015 were RMB 0.4 million (US$ 0.06 million), as compared to RMB 3.8 million in the second quarter of 2014. The year-over-year decrease in other expenses was mainly caused by the loss on disposal of equipment of RMB 3.5 million incurred in the second quarter ended June 30, 2014, whereas this was nil for the second quarter in 2015.

Profit from operations before taxation for the second quarter ended June 30, 2015 was RMB 26.4 million (US$ 4.3 million), as compared to RMB 3.2 million of profit from operations before taxation in the second quarter of 2014. Excluding the non-cash RMB 3.0 million fair value loss on derivative financial instruments incurred in the second quarter of 2014, the year-ago quarter profit from operations before taxation was RMB 6.2 million.

Net profit for the second quarter ended June 30, 2015 was RMB 19.2 million (US$ 3.1 million), as compared to a net profit of RMB 0.7 million for the second quarter ended June 30, 2014. Excluding the non-cash RMB 3.0 million fair value loss on derivative financial instruments incurred in the second quarter of 2014, the year-ago quarter net profit was RMB 3.7 million.

Earnings per fully diluted share were RMB 0.94 (US$ 0.15) for the second quarter ended June 30, 2015 as compared to RMB 0.03 for the second quarter of 2014. Excluding the non-cash RMB 3.0 million fair value loss on derivative financial instruments incurred in the second quarter of 2014, the year-ago quarter earnings per fully diluted share was RMB 0.18 per share. Per share calculations for the second quarters of 2015 and 2014 were computed using 20.4 million shares.

EBITDA for the second quarter ended June 30, 2015 was RMB 44.3 million (US$ 7.1 million), an increase of 107.0% from RMB 21.4 million for the second quarter ended June 30, 2014.

Six Months 2015 Results

Revenue for the six months ended June 30, 2015 was RMB 469.8 million (US$ 75.8 million), a decrease of 1.6% as compared to RMB 477.4 million for the six months ended June 30, 2014. Gross profit was RMB 49.6 million (US$ 8.0 million), up 48.1% from RMB 33.5 million in the six months ended June 30, 2014. Gross margin was 10.6%, compared to 7.0% in the same period of 2014. Selling expenses were RMB 5.4 million (US$ 0.9 million), compared to RMB 8.5 million in the same period of 2014. Administrative expenses were RMB 11.0 million (US$ 1.8 million), compared to RMB 14.7 million for the same period of 2014. Realized and unrealized fair value loss on derivative financial instruments was nil, compared to RMB 71.7 million in the same period of 2014. Other expenses were RMB 0.7 million (US$ 0.1 million), compared to RMB 4.9 million in the same period of 2014. Net profit for the six months ended June 30, 2015 was RMB 22.0 million (US$ 3.6 million), compared to a net loss of RMB 70.8 million for the same period of 2014. Earnings per fully diluted share were RMB 1.08 (US$ 0.17) for the six months ended June 30, 2015 and loss per fully diluted share were RMB 3.47 in the same period of 2014. Earnings/loss per fully diluted share for the first half of 2015 and 2014 were computed using 20.4 million shares.

Second Quarter 2015 Statements of Selected Financial Position Items

· Cash and bank balances were RMB 255.9 million (US$ 41.3 million) as of June 30, 2015, compared with RMB 61.2 million as of December 31, 2014. The increase in cash and bank balances of RMB 194.7 million was primarily the result of cash generated from operating activities of RMB 195.8 million for the first half year of 2015.

· Short-term bank borrowings were RMB 84.7 million (US$ 13.7 million) as of June 30, 2015, which is approximately the same level of debt incurred as of December 31, 2014.

· Inventory turnover was 139 days as of June 30, 2015 compared with 125 days as of December 31, 2014.

· Trade receivables turnover, net of value added tax, was 167 days as of June 30, 2015 compared with 156 days as of December 31, 2014. Prior to 2012, we typically offered a credit period of 90 days to our distributors, but extended it to 150 days at the end of 2012 to address funding pressures on distributors associated with the challenging real estate market conditions in China. We extended the credit period from 90 days to 120 days to direct company accounts at the end of 2014. The currently challenging economic environment has prompted us to offer extended credit terms to certain customers resulting in a higher trade receivables turnover figure than normal.

· Trade payables turnover, net of value added tax, was 80 days as of June 30, 2015 compared with 64 days as of December 31, 2014.

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