China Keli Announces Q1 2019 Results with Quarterly Year-over-Year Revenue Down by 54.4% and Turnaround Profit of $245,413 Recorded

Vancouver, British Columbia--(Newsfile Corp. - March 13, 2019) -  China Keli Electric Co., Ltd. (TSXV: ZKL) ("Keli" or the "Company") today announced the financial and operating results for the three months ended July 31, 2018.

For the three months ended July 31, 2018 ("Q1 2019"), total revenue was $2,504,954, a decrease of 54.4% over Q1 2018 of $5,489,677, caused by the decrease of sales of products revenue. Gross profit in Q1 2019 was $956,697 representing 38.2% of revenue which decreased 20.8% over gross profit of $1,208,070 in Q1 2018, which was 22.0% of revenue. Operating expenses were $779,228 in Q1 2019, a decrease from $1,149,350 in Q1 2018, caused by the decrease of sales commission and related expenses, salary and benefit, office expenses, and research and development expenses. The decreased financing costs of $230,644 in Q1 2019 ($273,782 in Q1 2018) further decreased the total expenses. With the total expenses decreased, the Company recorded a net profit of $245,413 in Q1 2019, compared with a net loss of $43,746 in Q1 2018. The turnaround profit resulted from the decreased gross profit overcome by the effective cost control of operating expenses which are expected to be continued. Basic and diluted earnings per share ("EPS") were 0.27 cents in Q1 2019, compared with loss of -0.05 cents in Q1 2018. EBITDA was $685,029 in Q1 2019, a turnaround increase from $507,012 in Q1 2018. After accounting for an unrealized foreign exchange translation gain of $729,356, the Company reported total comprehensive income of $974,769 in Q1 2019, compared with total comprehensive income of $203,785 in Q1 2018. 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.

As of July 31, 2018, the Company had total cash and cash equivalents of $69,317 compared with $170,630 as of April 30, 2018. Accounts receivable was $5,584,108 as at July 31, 2018, an increase of 15.0% compared with $4,856,000 as at April 30, 2018, which was attributed to the slow repayment of product revenue during the period. The Company's working capital deficit improved to negative $12,542,171 as at July 31, 2018 from negative $13,516,940 as at April 30, 2018.

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 months ended July 31, 2018 are available on SEDAR at www.sedar.com.

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

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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/43394

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