QandK international Group Ltd (NASDAQ:QK) Q1 2020 Earnings Conference Call - Final Transcript

Sep 30, 2020 • 07:30 am ET

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QandK international Group Ltd (NASDAQ:QK) Q1 2020 Earnings Conference Call - Final Transcript

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Executive
Zhichen Sun

or received compensation from them for such termination. Total operating costs and expenses were RMB1,080 million compared with RMB815 million in the same period of last year. That's primarily due to an increase in impairment losses, operating costs and the G&A expenses, partially offset by a decrease in selling and marketing expenses, pre-operation expenses and the research and development expenses.

In particular, operating costs increased to RMB682 million from RMB632 million for last year, that's generally in line with our revenue growth. Selling and marketing expenses decreased to RMB41 million from RMB56 million in the same period of last year, primarily due to cost saving efforts. G&A expenses increased to RMB65 million from RMB52 million in the same period of last year, mainly due to increase in expenses related to our IPO and the share-based compensation. Pre-operation expenses decreased to RMB13 million from RMB28 million in the same period of last year primarily due to fewer rental units being developed in the first half of fiscal year 2020 in contrast to the expansion in the same period of fiscal year 2019.

Impairment losses increased to RMB250 million from RMB21 million in the same period of last year. That's primarily due to provisions were provided for the impact of COVID-19 pandemic on our business. All-in-all, loss from operation increased to RMB453 million from RMB227 million in the same period of last year, mainly due to all the factors I just mentioned. Interest expenses, net increased to RMB62 million from RMB45 f million in the same period of last year, that's primarily attributable to the increased average balance of capital leases and other financing and bank borrowings compared with the same period of last year.

Fair value change of contingent earn-out liabilities was gain of RMB97 million compared with the loss of RMB30 million in the same period of last year. Loss before income taxes increased to RMB417 million from RMB302 million in the same period of last year. Adjusted EBITDA was negative RMB72 million compared with negative RMB93 million in the same period of last year. As of March 31, 2020, we had cash and cash equivalent of RMB126 million and a restricted cash of RMB9 million. Basic and diluted loss per share were both RMB0.34 compared with a basic and diluted loss per share of RMB0.96 during the same period of fiscal year 2019.

This concludes our prepared remarks. Thank you, all, for joining us.

Operator
Operator

Rene, over to you now. Rene, over to you.

Executive
Rene Vanguestaine

Yeah. Thank you, AJ. In closing, on behalf of the Qingke management team, we'd like to thank you for your participation in today's call. If you require any further information or are keen to visit us in China, please don't hesitate to let us know. This concludes the call. Good night, all.

Operator
Operator

[Operator Closing Remarks]