HANOI, Vietnam, Nov. 23, 2010 (GLOBE NEWSWIRE) -- Cavico Corp. (Nasdaq:CAVO), a major infrastructure construction, infrastructure investment, and natural resources conglomerate based in Vietnam, today announced its financial results for the third quarter ended September 30, 2010.
Mr. Ha Quang Bui, Chairman and Chief Executive Officer of Cavico, commented, "We are nearing a corner in our operational performance, as a significant number of our projects are moving from the early stages, which involved high costs compared to the revenue generated, into the middle stages, where the gross margin is expected to be higher since the increase in revenue will be higher than the related cost increase. As shown in the Vietnam Power Development Master Plan VI, the Vietnamese government plans to build 48 hydropower stations exceeding 50 MW by 2025, with total expected capacity of 21,300 MW, and over the period from 2006 to 2025 the electricity sector will need around $52 billion invested in power generation. We expect to benefit significantly from the Vietnamese government's focus on the electricity shortage and development of the related projects, as well as the overall growth of Vietnamese economy."
Revenues
Revenue from the Civil Construction segment for the third quarter of 2010 was $12.3 million, compared to $14.8 million in the same period of 2009. The decrease in revenue was due primarily to an increase in the currency conversion rate between the Vietnamese Dong (VND) and the U.S. dollar. Revenue from the Mining Construction segment during the third quarter of 2010 was $172,709. No 2009 comparison figures are available, as Cavico Mining was first included as a consolidated subsidiary of the Company in 2010. Revenues from other Commercial Activities, which includes leasing machinery and equipment and selling raw materials and steel fabrication, decreased $64,387, or 2.9%, to $2.1 million in the third quarter of 2010, down from $2.2 million a year ago. The revenue decrease in Commercial Activities was primarily attributable to an increase in the currency conversion rate between the Vietnamese Dong (VND) and the U.S. dollar. Third quarter commercial activities revenue in Vietnamese Dong increased 6% compared to the same period in 2009.
Gross Profit
The Company's gross profit in the third quarter of 2010 increased by $0.6 million compared to the same quarter in 2009. Gross profit for the third quarter 2010 was $1.7 million, or 11.4% of sales, compared to $1.1 million for the same quarter in 2009. The increase in gross profit and gross margin was primarily attributable to the phases of the Company's projects in progress. Many of the Company's projects were in early stages during the third quarter of 2010, in which higher costs, compared to revenues, were incurred. The Company anticipates that gross profit will increase during the remainder of 2010 and during 2011 as a result of higher revenue and lower costs of revenues on continuing projects, leading to higher margins.
Net Loss
For the third quarter ended September 30, 2010, Cavico had a net loss before non-controlling interest of $1.7 million compared to a net loss of $3.0 million for the same period in 2009. Net loss attributable to Cavico for the quarter was $1.9 million, or $0.62 per share, compared to $2.6 million, or $0.85 per share, in the third quarter of 2009.
Liquidity and Capital Resources
The Company's cash balance as of September 30, 2010 was $2.7 million as compared to $2.4 million at December 31, 2009. As of September 30, 2010, accounts receivable were $16.5 million and current work in progress was $25.4 million. Total current liabilities were $103.3 million, which included short-term construction loans and advances from customers. As of September 30, 2010, total shareholders' equity was $12.3 million.
As of September 30, 2010, Cavico had a loan balance of $70.1 million with interest rates ranging from 10.5% to 19.0% and recorded $1.8 million of interest expense, including capitalized interest, in the third quarter of 2010.
Backlog
The Company's backlog as of September 30, 2010 was $303.3 million compared to $304.6 million as of June 30, 2010. The backlog amount at September 30, 2010 is derived from the end of the second quarter backlog minus work completed plus new contracts signed during the third quarter of 2010. Cavico will continue to provide periodic updates when additional major contracts are confirmed.
Guidance Update for Fiscal 2010
Based on its current operating activities and backlog, the company modifies its previously stated guidance for the fiscal year 2010 financial results, projecting revenues of $59 million to $62 million, or roughly 4% growth from fiscal 2009 revenue without considering currency rate fluctuations. Management anticipates a net loss of $6 million to $7 million for fiscal 2010.
About Cavico Corp.
Cavico Corp. is focused on large infrastructure projects, which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants, mineral exploration and urban developments in Vietnam. The company employs more than 3,000 employees on projects worldwide, with offices throughout Vietnam and a satellite office in Australia. The Company has two subsidiaries, Cavico Mining (HSX:MCV), and Cavico Industry & Mineral (HNX:CMI), which are listed in Vietnam on the Ho Chi Minh and Hanoi Stock Exchanges.
Founded in 2000, Cavico is a major infrastructure construction, infrastructure investment and natural resources conglomerate headquartered in Hanoi, Vietnam. Cavico is highly respected for its core competency in the construction of mission-critical infrastructure including hydroelectric plants, highways, bridges, tunnels, ports and urban community developments. One of the Company's primary competitive advantages is its ability to nurture a project "from concept through completion" with a vertical portfolio of interrelated investment, permitting, design, construction management and facility maintenance services. Cavico's project partners include top multi-national corporations and government organizations. The Company employs more than 3,000 full-time, part-time, and seasonal workers. For more information, visit . Information on the Company's Web site or any other Web site does not constitute a portion of this release.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to obtain the necessary financing to continue and expand operations, to market its construction services in new markets and to offer construction services at competitive pricing, the Company's ability to complete projects in the time frame specified; anticipated revenue from the projects to attract and retain management, and to integrate and maintain technical information and management information systems; the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. These statements include, without limitation, statements regarding our ability to prepare the Company for growth; the Company's planned expansions, and predictions and guidance relating to the Company's future financial performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Cavico Corp. Timothy Pham, Vice President and Director +1-714-843-5456 cavicohq@cavico.us RedChip Companies, Inc. Investor Relations Contact: Dave Gentry 800-733-2447, Ext. 104 407-644-4256, Ext. 104 info@redchip.com