China Ceramics Announces Fourth Quarter and Full Year 2012 Financial Results

JINJIANG, Fujian Province, China, April 24, 2013 /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 fourth quarter and for the full year ended December 31, 2012.

Fourth Quarter 2012 Summary

Full Year 2012 Summary

"We recorded disappointing financial results for the fourth quarter of the year due to continued challenging market conditions in China's real estate and construction markets. These conditions resulted in significant decrease in the sales volume of our ceramic tile products for the quarter. We also experienced a decline in our average selling price in the quarter due to intensified price competition in our sector that caused us to reduce the price of our products to retain market share," said Mr. Jiadong Huang, CEO of China Ceramics.

"Despite the quarter's results, we believe that the operating fundamentals of our business are sound. In order to adjust to current market conditions and reduce operating costs, we shut down some plant capacity during the fourth quarter. We are currently utilizing production facilities capable of producing 46 million square meters per year out of a total annual productive capacity of 72 million square meters. We will continue to monitor the macroeconomic environment and act prudently in terms of utilizing our full production capacity. We are cautiously optimistic about an increase in demand and a rebound in pricing beginning in the second quarter of 2013 that would enable us to increase the utilization of our new and modern production capabilities."

"We will continue to enhance our ceramic tile product offerings and competitive profile in order to reach more customers in China and abroad. We continue to be strategically positioned as a producer of high-end ceramic tiles that are becoming standard in many new construction and development projects. We are confident that our modern technologies and cost efficiencies will enable us to adapt to the operating pressures of today's challenging market environment and successfully execute upon our long-term strategy, which is to be a market leader in producing specialized building materials products," Mr. Huang continued.

"The urbanization and demographic trends in China are a long-term phenomenon that will lead to future demand for our products as current real estate fluctuations moderate over time. Even as we adopt measures in the short-term to enable us to reach our customers more effectively, we are confident that the branding and market positioning that enabled us to become a premier ceramic tile producer will generate sound financial metrics once the building materials sector returns to more normalized conditions," CEO Jiadong Huang concluded.

Fourth Quarter 2012 Results

Revenue for the fourth quarter ended December 31, 2012 was RMB 245.3 million (US$ 40.0 million), down 39.3% from RMB 404.5 million (US$ 63.8 million) for the fourth quarter ended December 31, 2011. The year-over-year decrease in revenue was primarily driven by a 29.8% decrease in the sales volume of ceramic tiles to 8.7 million square meters in the fourth quarter of 2012 from 12.4 million square meters in the fourth quarter of 2011. The decrease in revenue was also driven by a 13.8% decrease in the Company's average selling price, which decreased in the fourth quarter of 2012 to RMB 28.2 per square meter compared to RMB 32.7 per square meter in the comparable quarter of 2011. The Company attributes its reduced sales volume to the continued challenging business conditions in China's real estate sector. Beginning in December 2012, the Company reduced the selling price of its ceramic tile products to be competitive in the market and maintain its market share. The Company believes that the decrease in the pricing of its ceramic tile products is temporary and that product pricing will revert to normal levels once business conditions improve.

Gross profit for the fourth quarter ended December 31, 2012 was RMB 29.3 million (US$ 4.9 million), down 79.0% from RMB 139.4 million (US$ 21.9 million) for the fourth quarter ended December 31, 2011. The year-over-year decrease in gross profit was attributable to lower sales volume and the decrease in the average selling price of the Company's ceramic tiles in the quarter. Gross profit margin was 12.0% for the fourth quarter ended December 31, 2012 compared to 34.5% for the same period in 2011. The year-over-year decrease in gross profit margin for the fourth quarter was caused by a decrease in the average selling price of ceramic tiles in the quarter.

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China Ceramics Announces Fourth Quarter and Full Year 2012 Financial Results