ChinaCache sets out 2017 as a year of ‘gradual recovery and development’ as profit tumbles 102%
Company recently entered into a definitive agreement to sell a vast majority of its data centre business arm to a group of Chinese funds.
Beijing-based ChinaCache International Holdings has disclosed its full fiscal year ended December 31, 2016, results with gross profit falling 101.6% compared to the previous year.
The company posted a gross loss of RMB5.3 million ($0.8m), compared with a gross profit of RMB312.2 million in 2015.
Revenues were also down by 22.1% from RMB1.4 billion in 2015 to RMB1.1 billion ($151.8m) in the full year of 2016.
Adjusted EBITDA (non-GAAP) in 2016 registered a loss of RMB236.9 million ($34.1m), compared with an adjusted EBITDA of RMB120.2 million in 2015.
Net loss in 2016 was RMB496.9 million ($71.6m). In comparison, the previous year saw a net loss of RMB88.7 million.
As for adjusted net loss (non-GAAP), ChinaCache posted RMB407.2 million ($58.6m) in 2016, compared with an adjusted net loss (non-GAAP) of RMB23.4 million in 2015.
As of December 31, 2016, the cmpany had cash and cash equivalents of RMB134.9 million ($19.4m), compared with RMB606.8 million as of December 31, 2015.
Capital expenditures for the full year of 2016 were RMB143.1 million ($20.6m).
The results prompted the company’s Chairman and Chief Executive Officer Song Wang to address the financial markets.
He said: “We achieved success in stabilising our core business in the second half of the year, despite continued challenges from HPCC platform issues in the first half of 2016.
“During the third and fourth quarters of 2016, we improved the performance of our CDN platforms, launched our Internet exchange business, began offering total solution products, and reorganized the Company for better efficiency.
“In particular, we established several Internet exchange centres in Beijing, Shanghai and Guangzhou, and are planning on more expansions in other major cities in China.
“These are expected to become integral to our total solution offering. In addition to our R&D efforts in selected technologies, including big data analysis, cloud exchange platforms and CDNs for the IoT industry, we also continued to improve our HPCC platform and upgrade our network hardware.
“Our turnaround initiatives are well underway, and we ended the year with full year 2016 net revenues of RMB1.05 billion, meeting our previous guidance.”
Wang continued to say that the company’s strategy is to capitalise on its strengths by integrating its resources to “provide a unique, three-layer structured network total solution package that clearly distinguishes ChinaCache as the provider of choice”.
He said: “Combined with our well diversified products and strong customer relationships, this strategy will enable ChinaCache to compete favourably in our designated markets.
“We anticipate 2017 to be a year of gradual recovery and development.”
ChinaCache has also release its 2017 revenue guidance, showing a clear desire to shift its revenues into growth again.
The company expects to generate total net revenues in the range of RMB1.18 billion to RMB1.24 billion for the full year of 2017, representing year-over-year growth of approximately 12% to 18%.
On a year-over-year basis, the company expects to see revenue growth starting from the second half of 2017.
Following the release of the results, ChinaCache has also named Cynthia Jinhong Meng as Chief Strategy Officer and senior VP.
Prior to joining ChinaCache, Meng worked for Jefferies and BofA Merrill Lynch as head of the TMT research team and led the coverage of Chinese technology, Internet and telecom companies.