Mr. Charles Wang reports

CF ENERGY ANNOUNCES Q3 AND NINE MONTHS RESULTS OF 2023

CF Energy Corp. has filed its unaudited condensed interim consolidated financial results for the three-month and nine-month periods ended Sept. 30, 2023 (Q3 2023 and nine months in 2023, respectively).

Financial highlights for Q3 2023

Continuing operations

Revenue in Q3 2023 was 125.4 million renminbi (approximately $24.0-million (Canadian)), an increase of 66.4 million renminbi (approximately $12.6-million (Canadian)) or 112 per cent from 59.0 million renminbi (approximately $11.4-million (Canadian)) for the three-month period ended Sept. 30, 2022 (Q3 2022).

Gross profit in Q3 2023 was 31.6 million renminbi (approximately $6.1-million (Canadian)), an increase of 13.5 million renminbi ($2.6-million (Canadian)) or 75 per cent from 18.1 million renminbi (approximately $3.5-million (Canadian)) in Q3 2022. Overall gross margin in Q3 2023 was 25.2 per cent, a decrease of 5.4 percentage points from 30.6 per cent in Q3 2022.

Net profit in Q3 2023 was 8.2 million renminbi (approximately $1.6-million (Canadian)), an increase of 7.9 million renminbi (approximately $1.5-million (Canadian)) from 300,000 renminbi (approximately $100,000 (Canadian)) in Q3 2022. Net profit in Q3 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of 1.3 million renminbi (approximately $200,000 (Canadian)), the adjusted net profit in Q3 2023 (non-IFRS (international financial reporting standards)) was 6.9 million renminbi (approximately $1.4-million (Canadian)), an increase of 8.5 million renminbi (approximately $1.7-million (Canadian)) or 519 per cent from adjusted net loss of 1.6 million renminbi (approximately $300,000 (Canadian)) in Q3 2022.

Basic earnings per share (EPS) in Q3 2023 were 0.15 renminbi (three Canadian cents) per share. Adjusted EPS in Q3 2023 was 0.10 renminbi (two Canadian cents) per share (non-IFRS).

EBITDA (earnings before interest, taxes, depreciation and amortization) (a non-IFRS measure) in Q3 2023 was 26.1 million renminbi (approximately $5.0-million (Canadian)), an increase of 10.6 million renminbi (approximately $2.0-million (Canadian)) or 69 per cent from 15.5 million renminbi (approximately $3.0-million (Canadian)) in Q3 2022. EBITDA in Q3 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of 1.3 million renminbi (approximately $0.2-million (Canadian)), the adjusted EBITDA in Q3 2023 (non-IFRS) was 24.8 million renminbi (approximately $4.8-million (Canadian)), an increase of 11.2 million renminbi (approximately $2.2-million (Canadian)) or 83 per cent from 13.6 million renminbi (approximately $2.6-million (Canadian)) in Q3 2022.

Financial highlights for the first nine months of 2023

Continuing operations

Revenue for the nine months in 2023 was 333.3 million renminbi (approximately $63.8-million (Canadian)), an increase of 104.9 million renminbi (approximately $19.6-million (Canadian)) or 46 per cent from 228.4 million renminbi (approximately $44.2-million (Canadian)) for the nine-month period ended Sept. 30, 2022.

Gross profit for the nine months in 2023 was 94.5 million renminbi (approximately $18.1-million (Canadian)), an increase of 15.9 million renminbi ($2.9-million (Canadian)) or 20 per cent from 78.6 million renminbi (approximately $15.2-million (Canadian)) for the nine months in 2022. Overall gross margin for the nine months in 2023 was 28.4 per cent, a decrease of 6.0 percentage points from 34.4 per cent for the nine months in 2022.

Net profit for the nine months in 2023 was 28.6 million renminbi (approximately $5.5-million (Canadian)), an increase of 15.9 million renminbi (approximately $3.0-million (Canadian)) or 125 per cent from 12.7 million renminbi (approximately $2.5-million (Canadian)) for the nine months in 2022. Net profit for the nine months in 2023 included non-recurring items. On a comparable basis, after excluding the non-recurring items, the fair value change on derivative financial instrument of 6.0 million renminbi (approximately $1.2-million (Canadian)) and government financial assistance of 800,000 renminbi (approximately $100,000 (Canadian)), the adjusted net profit for the nine months in 2023 (non-IFRS) was 21.8 million renminbi (approximately $4.2-million (Canadian)), an increase of 21.4 million renminbi (approximately $4.1-million (Canadian)) from 400,000 renminbi (approximately $100,000 (Canadian)) for the nine months in 2022.

Basic earnings per share (EPS) for the nine months in 2023 were 0.51 renminbi (10 Canadian cents) per share. Adjusted EPS for nine months in 2023 was 0.33 renminbi (six Canadian cents) per share (non-IFRS).

EBITDA (a non-IFRS measure) for the nine months in 2023 was 78.4 million renminbi (approximately $15.0-million (Canadian)), an increase of 15.0 million renminbi (approximately $2.7-million (Canadian)) or 24 per cent from 63.4 million renminbi (approximately $12.3-million (Canadian)) for the nine months in 2022. EBITDA for the nine months in 2023 included non-recurring items. On a comparable basis, after excluding the effects of non-recurring items, the fair value change on derivative financial instrument of 6.0 million renminbi (approximately $1.2-million (Canadian)) and government financial assistance of 800,000 renminbi (approximately $100,000 (Canadian)), adjusted EBITDA for the nine months in 2023 was 71.6 million renminbi (approximately $13.7-million (Canadian)), an increase of 20.5 million renminbi (approximately $3.8-million (Canadian)) or 40 per cent from 51.1 million renminbi (approximately $9.9-million (Canadian)) for the nine months in 2022.

Following on from the business and economic recovery reported in the interim period to June 30, 2023, such momentum has continued to gather pace. The company is very pleased to report that the group reported a 112-per-cent period-to-period increase in revenue for Q3 2023 with an overall increase of 46 per cent for the nine months in 2023. Bottom line profit also improved significantly as a result with adjusted net profit (non-IFRS) of 6.9 million renminbi for Q3 2023 (2022: adjusted loss of 1.6-million (Canadian)) and 21.8 million renminbi for the nine months in 2023 (2022: adjusted net profit of 400,000 renminbi). The company will continue to focus on the development of the integrated smart energy and the smart mobility segments, and will continue to expand the businesses in China and transition clean energy business as an integrated energy player.

The unaudited condensed interim consolidated financial results and management's discussion and analysis (MD&A) can be downloaded from SEDAR+ or from the company's website.

About CF Energy Corp. (previously known as Changfeng Energy Inc.)

CF Energy is a Canadian public company currently traded on the TSX Venture Exchange under the stock symbol CFY. It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the People's Republic of China. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC.

Non-IFRS financial measures

This news release contains financial terms that are not considered in the international financial reporting standards, namely EBITDA, adjusted EBITDA and adjusted net profit. These financial measures, together with measures prepared in accordance with IFRS, provide useful information to investors and shareholders, as management uses them to evaluate the operating performance of the company. The company's determination of these non-IFRS measures may differ from other reporting issuers and therefore are unlikely to be comparable with similar measures presented by other companies. Further, these non-IFRS measures should not be considered in isolation or as a substitute for measures of performance or cash flows prepared in accordance with IFRS. These financial measures are included because management uses this information to analyze operating performance and liquidity.

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