China Keli Announces Q2 2017 Results

VANCOUVER, BC / ACCESSWIRE / December 30, 2016 / China Keli Electric Co., Ltd. (TSXV: ZKL) (“Keli” or the “Company”) today announced the financial operating results for the three and six months ended October 31, 2016.

For the three months ended October 31, 2016 (“Q2 2017”), total revenue was $3,165,996, a decrease of 49.3% over Q2 2016 of $6,242,922, caused mainly by the decrease in revenue from products sales. Gross profit in Q2 2017 was $774,344 representing 24.5% of revenue which decreased 57.5% over Q2 2016 of $1,822,125, which was 29.2% of revenue. The decrease of gross profit was the result of a decrease in revenue and gross margin because of the poor economy in China. Operating expenses were $1,296,091 in Q2 2017, a decrease from $1,574,846 in Q2 2016, caused by the decrease of sales related commission expenses, transportation expenses and research and development expenses. The decreased financing costs of $253,763 in Q2 2017 ($297,222 in Q2 2016) further decreased the total expenses. Although the total expenses decreased, the Company recorded a net loss of $708,685 in Q2 2017, compared with a net loss of $21,338 in Q2 2016 because of the significant decrease of revenue and gross profit. Basic and diluted loss per share (“EPS”) were -$0.008 in Q2 2017, compared with -$0.000 in Q2 2016. EBITDA was negative $186,310 in Q2 2017, a decrease from positive EBITDA $629,407 in Q2 2016. After accounting for an unrealized foreign exchange translation gain of $338,596, the Company reported total comprehensive loss of $370,089 in Q2 2017, compared with total comprehensive loss of $106,144 in Q2 2016. The Company’s unrealized foreign exchange income on translation of the Company’s functional currency to its reporting currency is subject to fluctuations in the exchange rate between the RMB and the Canadian dollar in each reporting period.

For the six months of FY2017, total revenue was $6,772,263, a decrease of 29.6% over $9,616,362 for the equivalent six months period in FY2016. The Company recorded a net loss of $1,405,099 in the first six months of FY2017, compared to a loss of $279,888 in same period in FY2016. For the six months of FY2017, the Company records comprehensive net loss of $1,367,550, decreased $1,610,038 from a comprehensive profit of $242,488 over the same period in FY2016.

As of October 31, 2016, the Company had total cash and cash equivalents of $879,895 compared with $462,107 as of April 30, 2016. Accounts receivable was $18,182,624 as at October 31, 2016, an increase of 21.5% compared with $14,962,003 as at April 30, 2016, which was attributed to the slow cash collection from customers during the period. The Company’s working capital deficit increased to negative $9,625,684 as at October 31, 2016 from negative $8,439,892 as at April 30, 2016.

The functional currency of the Company and its subsidiaries is Chinese Yuan (also known as “Renminbi” or “RMB”). The financial and operating results of the relevant periods have been translated into Canadian dollars. Depending on the magnitude of changes in foreign currency exchange rates, the impact on the financial and operating results may or may not be material.

Full financial results of the Company for the three and six months ended October 31, 2016 are available on SEDAR at www.sedar.com.

About China Keli Electric Company Ltd.

China Keli Electric Company Ltd. specializes in the manufacturing and installation of electrical components and equipment, including pre-assembled mini substations, electrical controllers, pressurized and vacuumed switchgears and circuit breakers.

For further information, please contact:

CHINA KELI ELECTRIC COMPANY LTD.
Philip Lo, Chief Financial Officer
Tel. No.: (86) 13632 173732
Email: philip@zkl.cc

For further company information please access our website: www.zkl.cc

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Keli’s business are more fully discussed in the Company’s disclosure materials filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars unless noted otherwise.

SOURCE: China Keli Electric Co., Ltd.

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