EZGO ANNOUNCES FINANCIAL RESULTS FOR THE SIX MONTHS ENDED MARCH 31, 2024
PR Newswire
CHANGZHOU, China, Sept. 9, 2024
CHANGZHOU, China, Sept. 9, 2024 /PRNewswire/ -- EZGO Technologies Ltd. (Nasdaq: EZGO) ("EZGO" or "we", "our", or the "Company"), a leading short-distance transportation solutions provider in China, today announced its unaudited financial results for the six months ended March 31, 2024.
Financial Highlights (all results compared to the prior fiscal year period unless otherwise noted)
-- Revenues were $8.6 million, an increase of 66.1%
-- Units sold of e-bicycle reached 4,766, a decrease of 76.7%
-- Units sold of batteries and battery packs reached 243,336, an increase of
2614.6%
-- Gross margin was 5.7%, compared with 3.5%
-- Net loss was $4.7 million, compared with $5.0 million
-- The Company has cash and cash equivalents of approximately $0.7 million
at March 31, 2024, compared to approximately $17.3 million at September
30, 2023
Management Commentary
During the six months ending on March 31, 2024, due to the continuous decline in upstream raw materials price of lithium batteries, the penetration rate of lithium batteries in the e-bicycle industry gradually increased, and the sales volume of lithium batteries through various channels expanded significantly. The Company's management promptly seized this opportunity to expand its business, including increasing the models of e-bicycle batteries and expanding energy storage lithium battery products, appropriately shortening the supplier payment terms, and extending customer payment terms. The additional of ordinary shares and accompanying warrants issuance completed in September 2023 also provided a solid financial foundation for the Company's lithium battery business expansion. However, during the same period, the Company's production and sales volume of e-bicycles experienced a significant decline due to intensified market competition, hindered new product launches, and the sales of Tianjin Jiahao Bicycles Co., Ltd. ("Tianjin Jiahao").
Although the downward trend in e-bicycles production and sales has significantly slowed down, and sales are expected to rebound in the second half-year with the introduction of new products, in the medium term, the competition in the e-bicycles market in mainland China remains fierce, industry capacity clearance is still accelerating, and going overseas remains the main direction for breakthroughs. In addition, the smart electronic control subsidiary, Changzhou Higgs Intelligent Technology Co., Ltd. ("Changzhou Higgs"), acquired at the beginning of 2023 has partially increased the Company's sales volume and product gross margin through its production of smart electronic control modules. Moreover, with the advancement of the government-led industrial equipment upgrade plan, the sales revenue and profits of the subsidiary's main products are expected to experience considerable growth.
Based on management's assessment of macroeconomics and industrial competition, along with our own resource endowment, management has adjusted our business strategies as follows: (i) we halted the production of low and middle-end products and focused on the design, development, and production of mid-to-high-speed electric motorcycles through joint ventures or partnerships; (ii) we further enhanced the development and market promotion of lithium battery products for low-speed vehicles (including e-bicycle, e-tricycle and low-speed four-wheeled scooters ); (iii) we have actively expanded overseas sales channels for our products, in the hope of alleviating our dependency on current domestic sales channels; and (iv) we also made equity investments in some of the high-quality suppliers in the electric motorcycles and lithium battery industry.
Financial Review for the Six Months Ended March 31, 2024
Net Revenues
Net revenues from continuing operations for the six months ended March 31, 2024 were approximately $8.6 million, a 66.1% increase from approximately $5.2 million for the six months ended March 31, 2023. The increase in revenues was mainly driven by the increase in sales of batteries and battery packs and sales of electronic control system, and partially offset by the decrease of sales of e-bicycles.
The following table identifies revenue from continuing operations and discontinued operations, as well as reportable segments for the six months ended March 31, 2024 and 2023:
For the six months ended March 31, Change
----------------------------------- --------------------
Segment 2023 % 2024 % Amount %
------------- ---------- ----- --------- ----- ------------ ------
Sales of
batteries Battery cells
and battery and packs
packs segment $1,732,871 33.6 5,847,751 68.2 $ 4,114,880 237.5
E-bicycle
Sales of e- sales
bicycles segment 3,001,709 58.2 1,755,485 20.5 (1,246,224) (41.5)
Sales of Electronic
electronic control
control system and
system and intelligent
intelligent robot sales
robots segment - - 739,390 8.6 739,390 N/A
Others 427,118 8.2 232,667 2.7 (194,451) (45.5)
--------- ----- --------- ----- ----------- ------
Net revenue
from
continuing
Subtotal operations 5,161,698 100.0 8,575,293 100.0 3,413,595 66.1
========= ===== ========= ===== =========== ======
Rental of
lithium
batteries
and e-
bicycles Rental segment 120 0.0 8 0.0 (112) (93.3)
--------- ----- --------- ----- ----------- ------
Net revenue
from
discontinued
Subtotal operation 120 0.0 8 0.0 (112) (93.3)
--------- ----- --------- ----- ----------- ------
Total Net revenues $5,161,818 100.0 8,575,301 100.0 $ 3,413,483 66.1
========= ===== ========= ===== =========== ======
The revenue from sales of batteries and battery packs for six months ended March 31, 2024 was $5,847,751, compared to $1,732,871 for six months ended March 31, 2023, representing an increase of 237.5%, which was mainly due to the increase in sales volume supported by several new large orders of major customers. Such increase resulted from the increased acceptance of our lithium battery packs in the market and the development of the lead-acid battery market in Sichuan. Overall, our sales volume of lithium battery packs increased by 719.1% for the six months ended March 31, 2024 compared with the same period in the fiscal year ended September 30, 2023. The revenue generated from the sales of the lead-acid battery packs was $931,801 for the six months ended March 31,2024 compared $162,552 for the six months ended March 31, 2023.
The sales of e-bicycles decreased by 41.5% or $1,246,224 to $1,755,485 for six months ended March 31, 2024 from $3,001,709 for six months ended March 31, 2023 due to the decreased sales volume of the e-bicycles resulted from the fierce competition of the e-bicycle industry. The leading companies were forced to penetrate into the middle and low-end e-bicycles market due to the performance pressure and the small and middle companies had to reduced sales price in response to the competition. Overall, our sales volume decreased by 76.7% for the six months ended March 31, 2024 compared with the same period in the fiscal year ended September 30, 2023. Furthermore, the increase in the unit price of e-bicycles can be attributed to a shift in our product offerings. Initially, our sales focused on naked e-bicycles without batteries, whereas our current sales encompass complete e-bicycle packages, inclusive of batteries. For the six months ended March 31, 2024, we acquired a major customer, a shared travel service provider, and 93.6% of our revenue in sales of e-bicycle was attributable to the customer.
The revenue from sales of electronic control system and intelligent robots for six months ended March 31, 2024 was $739,390, a new business segment established during the fiscal year ended September 30, 2023.
Cost of Revenue
Cost of revenues consists primarily of manufacturing and purchase cost of e-bicycles, purchase cost of battery packs, purchase of components of the electronic control system, commission processing expenses for intelligent robots, depreciation, maintenance, and other overhead expenses.
Our cost of revenues increased by $3,107,809, or 62.4%, to $8,087,494 for six months ended March 31,2024 from $4,979,685 for six months ended March 31, 2023, which was primarily due to the increased sales of batteries and battery packs and partially offset by the decrease of manufacturing and purchase cost for sales of e-bicycles. The change in cost of revenue directly corresponded with the change in revenue from the sales of batteries and battery packs segment and e-bicycle sales segment.
Gross Profit
Gross profit for the six months ended March 31, 2023 and 2024 was $182,013 and $487,799, or 3.5% and 5.7% of net revenues, respectively.
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