RCEP A Contributor To Sustain Malaysia’s Trading And Investment Destination Status In Asean — Senior Minister Azmin Ali

KUALA LUMPUR— The Regional Comprehensive Economic Partnership (RCEP) Agreement will contribute to sustaining Malaysia’s status as a competitive trading hub and investment destination in ASEAN, Senior Minister cum Minister of International Trade and Industry Mohamed Azmin Ali said.

 

He said RCEP would also empower the small and medium enterprises (SMEs) to expand their global outreach, strengthening their pivotal role as the backbone of the ASEAN economy.

 

“Signing of RCEP is not only Malaysia’s testament of its resolve and commitment to strengthen the multilateral trading system but also an economic recovery tool against COVID-19 which helps to ensure continuous opening of markets as well as the uninterrupted flow of goods and enhancing of regional supply chains,” he said in a statement in conjunction with the 54th ASEAN day.

 

The virtual commemoration was led by Senior Foreign Minister (Security Cluster) Hishammuddin Hussein, who is the head of the Malaysian delegation and ASEAN political-security pillar, and attended by Tourism and Culture Minister Nancy Shukri as the head of the ASEAN socio-cultural pillar while Mohamed Azmin represented the ASEAN economic pillar.

 

According to the Ministry of International Trade and Industry (MITI), the signing of the RCEP agreement in November 2020 was the heart of ASEAN’s achievement during this unprecedented time of global uncertainties.

 

“In addition, the ASEAN Travel Corridor Arrangement Framework (ATCAF) and ratification of RCEP have been identified as among the key tools for expediting regional economic recovery under the ASEAN Comprehensive Recovery Framework (ACRF),” it said.

 

It said under Brunei Darussalam’s strong and able chairmanship with the theme “We Care, We Prepare, We Prosper” this year, ASEAN has steadily progressed towards economic recovery through various initiatives under the ACRF, including the ATCAF.

 

Meanwhile, the ministry said the ASEAN Online Sale Day (AOSD) would take place on the http://aseanonlinesaleday.com/ website from Aug 8 to Aug 10, 2021 to commemorate the 54th ASEAN Day.

 

“The AOSD initiative was launched in 2020, amidst the accelerated adoption of technology and digitalisation in the region since the onset of the pandemic early last year,” it said.

 

It added that more than 40 Malaysian SMEs are taking part in this year’s sale.

 

 

Source: NAM NEWS NETWORK

Indonesia, Flooding in Cilegon City, Banten (5 Aug 2021)

AFFECTED AREA/S

 

Cilegon

 

DESCRIPTION

 

Floods in Cilegon City, Prov. Banten

 

Chronology :

– Moderate – heavy rain in the Cilegon City area caused river water to overflow into settlements and the drainage was not functioning properly on Thursday, August 5, 2021, Pkl. 08.30 WIB

 

Location :

– Kec. Pulomerak

– Kel. Tamansari

 

Casualties:

– 100 affected households

 

Material Losses:

– ±100 houses submerged

– Flood depth 50 – 70 cm

 

Effort :

– Cilegon City BPBD together with Tagana and local Volunteers monitor and help residents affected by flooding

 

Up-to-date Condition:

– The flood has receded

 

Source :

– Cilegon City BPBD

 

Informed By:

BNPB PUSDALOPS

Complaint Number / Call Center : 117 (Toll Free)

Instagram : pusdalops_bnpb

Twitter : @Bnpbpusdalops

 

 

Source: ASEAN Coordinating Centre for Humanitarian Assistance

Subseasonal Weather Outlook (9 – 22 August 2021)

Subseasonal Weather Outlook (9 – 22 August 2021)

Issued 6 August 2021
First forecast week: 9 August – 15 August
Second forecast week: 16 August – 22 August

figure1

Figure 1: Rainfall Outlook

figure2

Figure 2: Temperature Outlook

Wetter conditions are expected in Week 1 (9 – 15 August) over most of the southern ASEAN region. These wetter conditions are expected to persist in Week 2 (16 – 22 August) except for parts of the western Maritime Continent.

Drier conditions are expected in Week 1 (9 – 15 August) over western parts of Mainland Southeast Asia.

Warmer temperatures than usual are expected in Week 1 (9 – 15 August) over most of Mainland Southeast Asia, easing in Week 2 (16 – 22 August). Elsewhere, warmer temperatures are also expected over southern parts of the Maritime Continent in the next fortnight (9 – 22 August).

Cooler temperatures than usual are expected in Week 2 (16 – 22 August) over parts of the central Maritime Continent.

An MJO signal was present over the Western Hemisphere and Africa (Phase 8) at the beginning of August, although the signal was no longer discernible based on the RMM Index by the start of the forecast period. Some models predict the MJO to reemerge in Week 1 (either in Phase 1 or Phase 2) and continue propagating eastwards over the Indian Ocean (Phases 2 and 3).
 
The outlook is assessed for the region in general, where conditions are relative to the average conditions for the corresponding time of year. For specific updates on the national scale, the relevant ASEAN National Meteorological and Hydrological Services should be consulted.

WillScot Mobile Mini Holdings Announces Second Quarter Results and Updates 2021 Outlook

Leasing Operations Accelerate Across All Segments, Successful ERP Cutover Completed, Over $216 Million Returned to Shareholders Year-To-Date, Investor Day Announced In November

PHOENIX, Aug. 05, 2021 (GLOBE NEWSWIRE) — WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), the North American leader in innovative flexible work space and portable storage solutions, today announced second quarter 2021 results and provided an update on operations, the current market environment, and merger integration activities.

The Company will host an investor day in New York on November 8, 2021. Further details will be provided at a later date.

On July 1, 2020, Williams Scotsman, Inc. closed the merger with Mobile Mini, Inc. (the “Merger”) and assumed the name WillScot Mobile Mini Holdings Corp. (Nasdaq: WSC). Our reported results only include Mobile Mini for the periods subsequent to the Merger. Our Pro Forma Results include Mobile Mini’s results as if the Merger and financing transactions had occurred on January 1, 2019, which we believe is a better representation of how the combined company has performed over time. Following the Merger, we expanded our reporting segments from two segments to four reporting segments. The North America Modular segment aligns with the WillScot legacy business prior to the Merger and the North America Storage, UK Storage and Tank and Pump segments align with the Mobile Mini segments prior to the Merger.

WillScot Mobile Mini Holdings’ Financial Highlights1
Highlights of Second Quarter Results

  • Total revenues of $461.1 million increased by $204.2 million relative to prior year, or 79.5%, driven by the addition of Mobile Mini’s revenues to our consolidated results, upon closing of the Merger on July 1, 2020, as well as due to increased core leasing revenues in the NA Modular segment.
    • Modular space monthly rental rates in the NA Modular segment increased by 19.7% year over year while delivery volumes increased 12.0% year over year.
  • Adjusted EBITDA of $175.5 million increased by $78.0 million, or 80.0% year over year, driven both by the addition of Mobile Mini to our results and 6.2% year over year organic growth in the NA Modular segment.
  • Adjusted EBITDA Margin of 38.1% increased by 10 basis points (“bps”) relative to prior year, driven by the addition of Mobile Mini’s higher margin portable storage business, and partly offset by accelerating activations and associated variable costs and delivery and installation revenues in the quarter.
  • Net income of $20.4 million increased by $34.5 million year over year and included $15.0 million of integration and restructuring charges, an $8.0 million non-cash tax expense due to a statutory rate increase in the UK, a $2.8 million non-cash loss on debt extinguishment, and a $0.6 million fair value gain on warrant liabilities. Net Income Excluding Gain/Loss from Warrants of $19.8 million increased by $7.0 million year over year.
  • Generated $82.1 million of free cash flow, an increase of $43.1 million or 110% relative to prior year, and representing a free cash flow margin of 18%.
  • Maintained leverage at 3.7x our pro forma last-twelve-months Adjusted EBITDA of $682.3 million while repurchasing $132.7 million of common stock and warrants.
  • Redeemed $58.5 million of our 6.125% senior notes due 2025, using capacity available in our lower cost ABL facility.

Highlights of Second Quarter Pro Forma Results

  • Pro Forma total revenues increased 18.1% or $70.6 million relative to prior year, driven by increases in leasing revenue and delivery and installation revenue.
  • Leasing revenues of $343.2 million increased by 18.2% year over year due to continued increases in pricing and value-added products and stabilization of unit on rent volumes.
    • In NA Modular, modular space unit monthly rental rates increased by 19.7%. In NA Storage, portable storage unit and modular space unit monthly rental rates increased by 10.3%. In UK Storage, modular space monthly rental rates increased 39.9%.
    • Modular space unit deliveries in NA Modular increased by 12%.
    • Portable storage and modular space unit deliveries in NA Storage increased 42%, which is in line with 2019 delivery levels.
  • Adjusted EBITDA of $175.5 million, increased by $21.7 million, or 14.1%, year over year on a pro forma basis, with strong growth across all segments.
  • Adjusted EBITDA Margin of 38.1% decreased by 130 bps relative to prior year on a pro forma basis as expected due to increased activity levels. Accelerating deliveries created incremental variable costs and increased delivery and installation revenues, which are lower margin revenues compared to total revenues.

Refer to the Supplemental Pro Forma Financial Information section on Form 10-Q to be filed with the SEC and made available on the WillScot Mobile Mini Holdings Corp. investor relations website for full reconciliations of our reported and pro forma results.

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Revenue $ 461,102 $ 256,862 $ 886,425 $ 512,683
Consolidated net income (loss) $ 20,371 $ (14,130 ) $ 24,818 $ 77,525
Adjusted EBITDA1 $ 175,495 $ 97,520 $ 339,080 $ 187,062
Net cash provided by operating activities $ 139,537 $ 75,379 $ 261,608 $ 113,727
Free Cash Flow1 $ 82,056 $ 38,996 $ 173,216 $ 46,804
Three Months Ended June 30, Six Months Ended June 30,
Pro Forma Adjusted EBITDA1 by Segment (in thousands) 2021 2020 2021 2020
NA Modular $ 103,545 $ 97,520 $ 200,916 $ 187,064
NA Storage 49,526 40,770 95,848 84,764
UK Storage 12,328 6,853 23,392 13,258
Tank and Pump 10,096 8,659 18,924 18,136
Consolidated Adjusted EBITDA $ 175,495 $ 153,802 $ 339,080 $ 303,222

Management Commentary1

Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented “our second quarter results were excellent. Our team proved once again that we can deliver operationally while executing a complex integration with precision. And our diversified portfolio is positioned for growth through a powerful combination of internal initiatives and end market strength. In our NA Modular segment, units on rent stabilized sequentially, as deliveries across our end markets ramped. Historical pricing trends accelerated at a record pace, with a 19.7% year over year increase in average monthly rental rate, underpinned by increases in core pricing and VAPS penetration and augmented by the return of shorter duration special events as COVID restrictions relaxed relative to last year. Our NA Storage segment demonstrated impressive rate improvement, with a 10.3% year over year price increase as we focused on rates on new activations of storage units and continued core pricing increases on the ground level office fleet. Our UK Storage segment booked another tremendous quarter, with blended rates up 26.4%, units on rent up 13.5%, and Adjusted EBITDA up nearly 80% year over year. Finally, our Tank & Pump segment increased its OEC utilization to 71.2% and inflected strongly, generating year over year Revenue and EBITDA growth in the quarter as end markets recovered.”

Soultz continued, “While these results are outstanding, I’m most proud of the relentless focus demonstrated by our team as we migrated the legacy WillScot business onto Mobile Mini’s SAP platform. This work was painstaking and all-consuming for many on our team, yet we executed flawlessly while minimizing disruptions in the business. This ERP cutover established a foundation from which we will build and, on the one-year anniversary of the WillScot and Mobile Mini merger, is the catalyst which will allow us to begin executing our strategy as a combined company.”

Tim Boswell, Chief Financial Officer of WillScot Mobile Mini Holdings, commented “in the second quarter, we saw improvement across virtually every financial and operational metric in our business. Cash generation remains robust, with $82.1 million in free cash flow in the quarter and a 20% free cash flow margin in the twelve months since the merger closed, despite cash costs from our integration efforts over that period and the fact that we are only just beginning to realize synergies from the Mobile Mini merger. With the SAP migration complete, synergy realization will accelerate as our teams restore their focus on the portfolio of commercial and operational value creation levers that we have identified. Our outlook for the remainder of 2021 and our run-rate expectations for 2022 continue to improve as reflected in our updated financial guidance. All of these factors together gave us confidence to put our balance sheet to work in the quarter, maintaining leverage at 3.7x, repurchasing $135 million of common stock and warrants, and redeeming $58.5 million of our senior notes due 2025. With the most difficult phase of the integration behind us, we are squarely focused on the future and unlocking the value in this platform, and we look forward to discussing these opportunities at our Investor Day on November 8th in New York.”

Second Quarter 2021 Results1

Total revenues increased 79.5% to $461.1 million, while leasing revenues increased 80.5% versus the prior year quarter driven primarily by the addition of Mobile Mini’s revenues to our consolidated results as well as due to increased leasing revenues in the NA Modular segment.

  • Average modular space units on rent increased 23,372 units, or 26.8%, and average portable storage units on rent increased 135,867 units, both driven by the Mobile Mini Merger.
  • Average modular space monthly rental rate increased $67, or 10.0% to $736 driven by a $132, or 19.7% increase in the NA Modular segment, offset by the dilutive impact of lower rates due to mix on the Mobile Mini modular space units.
  • Average portable storage monthly rental rate increased $19, or 15.8% to $139 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.
  • NA Modular segment revenue increased $32.5 million, or 12.7%, to $289.4 million, primarily driven by a $27.5 million, or 14.5%. increase to our core leasing revenue due to continued growth of pricing and value added products:
    • NA Modular space average monthly rental rate of $801 increased 19.7% year over year, representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
    • Average modular space units on rent decreased 2,342, or 2.7% year over year driven by lower deliveries, during 2020 as a result of the COVID-19 pandemic. Sequentially from March 31, 2021, average modular space units on rent were flat.

Adjusted EBITDA of $175.5 million increased $78.0 million, or 80.0% year over year. Of this increase, $71.9 million was driven by the addition of Mobile Mini to our consolidated results, with the remainder driven by strong organic growth in the NA Modular segment.

  • Adjusted EBITDA in our NA Modular segment increased $6.0 million, or 6.2% to $103.5 million primarily driven by a $9.1 million, or 6.0%, increase in leasing and services gross profit excluding depreciation driven by increased pricing and VAPS. These increases more than offset a $14.8 million increase in variable leasing costs, driven by the 12% increase in delivery volumes versus prior year.
  • Consolidated Adjusted EBITDA Margin was 38.1% in the second quarter and increased 10 bps versus prior year, driven by the addition of Mobile Mini’s higher margin portable storage business, offset by a higher proportion of delivery and installation revenues to total revenues and the increased variable costs in the current year quarter.

Net income of $20.4 million for the three months ended June 30, 2021 included a $0.6 million gain on the change in fair value of common stock warrant liabilities. Net Income Excluding Gain/Loss from Warrants of $19.8 million for the three months ended June 30, 2021, represented an increase of $7.0 million, and included a $2.8 million loss on extinguishment of debt related to the partial redemption of the 2025 Secured Notes, a $8.0 million non-cash tax expense due to a statutory rate increase in the UK, and $15.0 million of discrete costs expensed in the period related to transaction and integration activities. Discrete costs in the period included $7.6 million of integration costs and $7.4 million of restructuring costs, lease impairment expense and other related charges.

Free Cash Flow increased by $43.1 million year over year to $82.1 million, representing a 17.8% free cash flow margin.

Second Quarter 2020 Pro Forma Results1
Total revenues increased 18.1% or $70.6 million on a pro forma basis to $461.1 million driven by an increase in leasing revenues of $52.9 million, or 18.2% year over year.

  • Consolidated average modular space monthly rental rates increased $122, or 19.9% year over year driven by a $132, or 19.7%, increase in the NA Modular segment and a $110, or 23.8% increase in the NA Storage segment, and a $125, or 39.9% increase in the UK Storage segment.
  • Consolidated average portable storage monthly rental rates increased $10, or 7.8% versus prior year.
  • Average modular space units on rent declined 0.3% year over year driven by lower deliveries during 2020 as a result of the COVID-19 pandemic. However, average modular space units on rent improved 0.1% sequentially from Q1 to Q2. Portable storage units on rent increased 8.2% year over year.

Adjusted EBITDA of $175.5 million, represented a $21.7 million, or 14.1%, increase year over year, with strong growth across the NA Modular, NA Storage, UK Storage and Tank and Pump segments.

Adjusted EBITDA margin contracted 130 bps year over year to 38.1% as expected, driven by a higher proportion of delivery and installation revenues to total revenues and a $23.4 million increase in variable costs to support higher activity levels in the current year quarter across all segments.

Capitalization and Liquidity Update1,3
As of June 30, 2021

  • Generated $82.1 million of free cash flow in the second quarter and a 20% free cash flow margin over the last twelve months.
  • Repurchased 3.9 million shares for $108.2 million in connection with a secondary offering and repurchased an additional $26.5 million of common stock and warrants, returning a total of $134.7 million to our shareholders.
  • Redeemed $58.5 million of our 6.125% senior notes due 2025, refinancing this balance to our lower-cost asset-based revolving credit facility.
  • Over $0.9 billion of excess availability under the asset-based revolving credit facility, a flexible covenant structure, and accelerating free cash flow provide ample liquidity to fund multiple capital allocation alternatives.
  • Weighted average interest rate is approximately 3.8% and annual cash interest expense based on the current debt structure is approximately $98 million.
  • No debt maturities prior to 2025.
  • Maintained leverage at 3.7x our pro forma last-twelve-months Adjusted EBITDA of $682.3 million and are on a rapid deleveraging trajectory.

2021 Outlook1, 2, 3

This guidance is subject to risks and uncertainties, including those described in “Forward-Looking Statements” below.

2020 Pro Forma Results Prior 2021 Outlook Current 2021 Outlook
Revenue $1,652 million $1,750 million – $1,830 million $1,800 million – $1,850 million
Adjusted EBITDA1,2 $646 million $690 million – $720 million $710 million – $730 million
Net CAPEX2,3 $161 million $190 million – $230 million $200 million – $230 million

1 – Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP financial measures. Further information and reconciliations for these Non-GAAP measures to the most directly comparable financial measure under generally accepted accounting principles in the US (“GAAP”) is included at the end of this press release.
2 – Information reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP financial measures is unavailable to the Company without unreasonable effort and therefore no reconciliation to the most comparable GAAP measures is provided.
3 – Net CAPEX is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.

Non-GAAP Financial Measures
This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Pro Forma Revenue, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income Excluding Gain/Loss from Warrants, and Net CAPEX. Adjusted EBITDA is defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency gains and losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, costs incurred related to transactions, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of warrant liabilities, and other discrete expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, “Total Capital Expenditures”), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, “Total Proceeds”), which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Total Revenue. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. Pro Forma Revenue is defined the same as revenue, but includes pre-acquisition results from Mobile Mini for all periods presented. Adjusted Gross Profit is defined as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Net Income Excluding Gain/Loss from Warrants is defined as Net Income plus or minus the impact of the change in the fair value of the warrant liability. The Company believes that our financial statements that will include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual financial performance of our business. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of the Company to its competitors; and (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends. The Company believes that pro forma revenue is useful to investors because they allow investors to compare performance of the combined Company over various reporting periods on a consistent basis. The Company believes that Net CAPEX provide useful additional information concerning cash flow available to meet future debt service obligations. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore the Company’s non-GAAP financial measures may not be directly comparable to similarly-titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see “Reconciliation of Non-GAAP Financial Measures” included in this press release.

Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort. We cannot provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. The Company provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above.

Conference Call Information

WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its second quarter 2021 results and outlook at 10 a.m. Eastern Time on Friday, August 6, 2021. The live call may be accessed by dialing (855) 312-9420 (US/Canada toll-free) or (210) 874-7774 (international) and asking to be connected to the WillScot Mobile Mini Holdings call. A live webcast will also be accessible via the “Events & Presentations” section of the Company’s investor relations website www.willscotmobilemini.com. Choose “Events” and select the information pertaining to the WillScot Mobile Mini Holdings Second Quarter 2021 Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software. For those unable to listen to the live broadcast, an audio webcast of the call will be available for 60 days on the Company’s investor relations website.

About WillScot Mobile Mini Holdings

WillScot Mobile Mini Holdings trades on the Nasdaq stock exchange under the ticker symbol “WSC.” Headquartered in Phoenix, Arizona, the Company is a leading business services provider specializing in innovative flexible workspace and portable storage solutions. WillScot Mobile Mini services diverse end markets across all sectors of the economy from a network of approximately 270 branch locations and additional drop lots throughout the United States, Canada, Mexico, and the United Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature. Certain of these forward-looking statements include statements relating to: the acceleration of synergies; our ability to continue to improve results; our future cash flow and liquidity, our deleveraging trajectory, continued VAPS penetration opportunities, and our revenue, Adjusted EBITDA and Net Capex outlooks. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, they are predictions and we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others, our ability to acquire and integrate new assets and operations; our ability to achieve planned synergies related to acquisitions; our ability to manage growth and execute our business plan; our estimates of the size of the markets for our products; the rate and degree of market acceptance of our products; the success of other competing modular space and portable storage solutions that exist or may become available; rising costs adversely affecting our profitability; potential litigation involving our Company; general economic and market conditions impacting demand for our products and services; our ability to maintain an effective system of internal controls; and such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Form 10-K/A for the year ended December 31, 2020), which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It
Additional information can be found on the company’s website at www.willscotmobilemini.com.

Contact Information
Investor Inquiries: Media Inquiries:
Nick Girardi Scott Junk
investors@willscotmobilemini.com scott.junk@willscotmobilemini.com

WillScot Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except share and per share data) 2021 2020 2021 2020
Revenues:
Leasing and services revenue:
Leasing $ 343,179 $ 190,143 $ 658,841 $ 378,495
Delivery and installation 91,680 51,640 175,184 102,710
Sales revenue:
New units 11,008 9,763 21,963 19,376
Rental units 15,235 5,316 30,437 12,102
Total revenues 461,102 256,862 886,425 512,683
Costs:
Costs of leasing and services:
Leasing 83,032 47,747 152,927 97,556
Delivery and installation 77,153 43,523 147,289 87,388
Costs of sales:
New units 7,052 6,331 14,161 12,534
Rental units 8,162 3,803 17,267 7,609
Depreciation of rental equipment 62,893 45,494 118,591 91,442
Gross profit 222,810 109,964 436,190 216,154
Expenses:
Selling, general and administrative 122,387 63,653 238,872 129,190
Transaction costs 1,619 844 11,050
Other depreciation and amortization 21,622 2,883 39,946 5,957
Lease impairment expense and other related charges 474 1,394 1,727 3,055
Restructuring costs 6,960 749 10,102 689
Currency losses (gains), net 33 (380 ) 69 518
Other expense (income), net 719 (1,021 ) (1,269 ) (745 )
Operating income 70,615 41,067 145,899 66,440
Interest expense 29,212 28,519 59,176 56,776
Fair value (gain) loss on common stock warrant liabilities (610 ) 26,963 26,597 (68,366 )
Loss on extinguishment of debt 2,814 5,999
Income (loss) before income tax 39,199 (14,415 ) 54,127 78,030
Income tax expense (benefit) 18,828 (285 ) 29,309 505
Net income (loss) 20,371 (14,130 ) 24,818 77,525
Net income attributable to non-controlling interest, net of tax 1,343 1,213
Net income (loss) attributable to WillScot Mobile Mini $ 20,371 $ (15,473 ) $ 24,818 $ 76,312
Earnings (loss) per share attributable to WillScot Mobile
Mini common shareholders
Basic $ 0.09 $ (0.14 ) $ 0.11 $ 0.69
Diluted $ 0.08 $ (0.14 ) $ 0.11 $ 0.06
Weighted average shares:
Basic 228,406,812 110,692,426 228,350,318 110,174,536
Diluted 236,536,713 110,692,426 234,898,911 112,336,118

Unaudited Segment Operating Data

Comparison of Three Months Ended June 30, 2021 and 2020

Three Months Ended June 30, 2021
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 289,382 $ 115,794 $ 28,432 $ 27,494 $ 461,102
Gross profit $ 116,136 $ 75,721 $ 17,937 $ 13,016 $ 222,810
Adjusted EBITDA $ 103,545 $ 49,526 $ 12,328 $ 10,096 $ 175,495
Capital expenditures for rental equipment $ 49,364 $ 8,773 $ 4,226 $ 2,919 $ 65,282
Average modular space units on rent 84,754 16,360 9,354 110,468
Average modular space utilization rate 67.7 % 78.4 % 84.3 % % 70.3 %
Average modular space monthly rental rate $ 801 $ 573 $ 438 $ $ 736
Average portable storage units on rent 13,301 112,862 25,573 151,736
Average portable storage utilization rate 69.8 % 76.1 % 91.8 % % 77.7 %
Average portable storage monthly rental rate $ 133 $ 151 $ 88 $ $ 139
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % 71.2 % 71.2 %
Three Months Ended June 30, 2020
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 256,862 $ $ $ $ 256,862
Gross profit $ 109,964 $ $ $ $ 109,964
Adjusted EBITDA $ 97,520 $ $ $ $ 97,520
Capital expenditures for rental equipment $ 40,034 $ $ $ $ 40,034
Average modular space units on rent 87,096 87,096
Average modular space utilization rate 68.5 % % % % 68.5 %
Average modular space monthly rental rate $ 669 $ $ $ $ 669
Average portable storage units on rent 15,869 15,869
Average portable storage utilization rate 62.5 % % % % 62.5 %
Average portable storage monthly rental rate $ 120 $ $ $ $ 120
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % % %

Comparison of the Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30, 2021
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 555,606 $ 223,542 $ 55,439 $ 51,838 $ 886,425
Gross profit $ 229,138 $ 148,340 $ 34,430 $ 24,282 $ 436,190
Adjusted EBITDA $ 200,916 $ 95,848 $ 23,392 $ 18,924 $ 339,080
Capital expenditures for rental equipment $ 88,499 $ 12,245 $ 10,996 $ 6,077 $ 117,817
Average modular space units on rent 84,737 16,399 9,235 110,371
Average modular space utilization rate 67.6 % 78.9 % 84.1 % % 70.3 %
Average modular space monthly rental rate $ 769 $ 554 $ 420 $ $ 703
Average portable storage units on rent 14,186 109,355 25,112 148,653
Average portable storage utilization rate 64.8 % 75.0 % 90.5 % % 76.1 %
Average portable storage monthly rental rate $ 128 $ 150 $ 85 $ $ 137
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % 69.3 % 69.3 %
Six Months Ended June 30, 2020
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 512,683 $ $ $ $ 512,683
Gross profit $ 216,154 $ $ $ $ 216,154
Adjusted EBITDA $ 187,062 $ $ $ $ 187,062
Capital expenditures for rental equipment $ 79,682 $ $ $ $ 79,682
Average modular space units on rent 87,542 87,542
Average modular space utilization rate 68.9 % % % % 68.9 %
Average modular space monthly rental rate $ 661 $ $ $ $ 661
Average portable storage units on rent 16,114 16,114
Average portable storage utilization rate 63.5 % % % % 63.5 %
Average portable storage monthly rental rate $ 120 $ $ $ $ 120
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % % %

WillScot Corporation
Consolidated Balance Sheets
(in thousands, except share and per share data)

(in thousands, except share data) June 30, 2021
(unaudited)
December 31, 2020
Assets
Cash and cash equivalents $ 15,402 $ 24,937
Trade receivables, net of allowances for credit losses at June 30,
2021 and December 31, 2020 of $36,785 and $29,258,
respectively
365,164 330,942
Inventories 32,294 23,731
Prepaid expenses and other current assets 26,686 29,954
Assets held for sale 12,004
Total current assets 439,546 421,568
Rental equipment, net 2,914,572 2,931,646
Property, plant and equipment, net 303,488 303,650
Operating lease assets 235,258 232,094
Goodwill 1,180,737 1,171,219
Intangible assets, net 474,327 495,947
Other non-current assets 11,785 16,081
Total long-term assets 5,120,167 5,150,637
Total assets $ 5,559,713 $ 5,572,205
Liabilities and equity
Accounts payable $ 132,031 $ 106,926
Accrued expenses 149,670 141,672
Deferred revenue and customer deposits 151,819 135,485
Operating lease liabilities – current 49,606 48,063
Current portion of long-term debt 16,557 16,521
Total current liabilities 499,683 448,667
Long-term debt 2,506,295 2,453,809
Deferred tax liabilities 332,492 307,541
Operating lease liabilities – non-current 184,874 183,761
Common stock warrant liabilities 77,404
Other non-current liabilities 30,956 37,150
Long-term liabilities 3,054,617 3,059,665
Total liabilities 3,554,300 3,508,332
Commitments and contingencies (see Note 17)
Preferred Stock: $0.0001 par, 1,000,000 shares authorized
and zero shares issued and outstanding at June 30, 2021 and
December 31, 2020
Common Stock: $0.0001 par, 500,000,000 shares authorized and
226,832,627 and 229,038,158 shares issued and outstanding at
June 30, 2021 and December 31, 2020, respectively
23 23
Additional paid-in-capital 3,756,563 3,852,291
Accumulated other comprehensive loss (24,757 ) (37,207 )
Accumulated deficit (1,726,416 ) (1,751,234 )
Total shareholders’ equity 2,005,413 2,063,873
Total liabilities and equity $ 5,559,713 $ 5,572,205

Reconciliation of Non-GAAP Financial Measures

We use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.

We evaluate business segment performance on Adjusted EBITDA, a non-GAAP measure that excludes certain items as described in the reconciliation of our consolidated net income (loss) to Adjusted EBITDA reconciliation below. We believe that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company.

We also regularly evaluate gross profit by segment to assist in the assessment of the operational performance of each operating segment. We consider Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs.

We also evaluate Free Cash Flow, a non-GAAP measure that provides useful information concerning cash flow available to meet future debt service obligations and working capital requirements.

Adjusted EBITDA

We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA (“Adjusted EBITDA”) reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:

  • Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.
  • Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.
  • Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.
  • Transaction costs including legal and professional fees and other transaction specific related costs.
  • Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.
  • Non-cash charges for stock compensation plans.
  • Other expense includes consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing the Company’s results as reported under US GAAP. Some of these limitations are:

  • Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs;
  • Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
  • Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
  • Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
  • Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
  • other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations. The following tables provide unaudited reconciliations of Net income (loss) to Adjusted EBITDA.

Adjusted EBITDA

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Net income (loss) $ 20,371 $ (14,130 ) $ 24,818 $ 77,525
Income tax expense (benefit) 18,828 (285 ) 29,309 505
Loss on extinguishment of debt 2,814 5,999
Interest expense 29,212 28,519 59,176 56,776
Depreciation and amortization 84,515 48,377 158,537 97,399
Fair value loss (gain) on common
stock warrant liabilities
(610 ) 26,963 26,597 (68,366 )
Currency losses (gains), net 33 (380 ) 69 518
Restructuring costs, lease impairment
expense and other related charges
7,434 2,143 11,829 3,744
Transaction costs 1,619 844 11,050
Integration costs 7,622 2,153 14,964 3,839
Stock compensation expense 4,707 2,227 8,221 4,014
Other 569 314 (1,283 ) 58
Adjusted EBITDA $ 175,495 $ 97,520 $ 339,080 $ 187,062

Net Income Excluding Gain/Loss from Warrants

We define Net Income Excluding Gain/Loss from Warrants as Net Income plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that our financial statements that will include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual financial performance of our business.

The following tables provide unaudited reconciliations of Net income (loss) to Net Income Excluding Gain/Loss from Warrants.

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Net income (loss) $ 20,371 $ (14,130 ) $ 24,818 $ 77,525
Fair value (gain) loss on common stock warrant liabilities (610 ) 26,963 26,597 (68,366 )
Net Income (Loss) Excluding Gain/Loss from Warrants $ 19,761 $ 12,833 $ 51,415 $ 9,159

Adjusted EBITDA Margin Non-GAAP Reconciliation

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Revenue. Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following tables provide unaudited reconciliations of Adjusted EBITDA Margin.

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Adjusted EBITDA (A) $ 175,495 $ 97,520 $ 339,080 $ 187,062
Revenue (B) $ 461,102 $ 256,862 $ 886,425 $ 512,683
Adjusted EBITDA Margin (A/B) 38.1 % 38.0 % 38.3 % 36.5 %

Free Cash Flow and Free Cash Flow Margin

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Total Revenue. Management believes that the presentation of Free Cash Flow and Free Cash Flow Margin provide useful information to investors regarding our results of operations because they provide useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements.

The following table provides unaudited reconciliations of net cash provided by operating activities to Free Cash Flow.

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Net cash provided by operating activities $ 139,537 $ 75,379 $ 261,608 $ 113,727
Purchase of rental equipment and refurbishments (65,282 ) (40,034 ) (117,817 ) (79,682 )
Proceeds from sale of rental equipment 15,235 5,316 30,437 12,102
Purchase of property, plant and equipment (10,143 ) (1,668 ) (17,450 ) (3,186 )
Proceeds from the sale of property, plant and equipment 2,709 3 16,438 3,843
Free Cash Flow (A) $ 82,056 $ 38,996 $ 173,216 $ 46,804
Revenue (B) $ 461,102 $ 256,862 $ 886,425 $ 512,683
Free Cash Flow Margin (A/B) 17.8 % 15.2 % 19.5 % 9.1 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Adjusted Gross Profit and Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Our management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business.

The following table provides unaudited reconciliations of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage.

Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2021 2020 2021 2021
Revenue (A) $ 461,102 $ 256,862 $ 886,425 $ 512,683
Gross profit (B) $ 222,810 $ 109,964 $ 436,190 $ 216,154
Depreciation of rental equipment 62,893 45,494 118,591 91,442
Adjusted Gross Profit (C) $ 285,703 $ 155,458 $ 554,781 $ 307,596
Gross Profit Percentage (B/A) 48.3 % 42.8 % 49.2 % 42.2 %
Adjusted Gross Profit Percentage (C/A) 62.0 % 60.5 % 62.6 % 60.0 %

Net CAPEX

We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, “Total Capital Expenditures”), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, “Total Proceeds”), which are all included in cash flows from investing activities. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business.

The following table provides unaudited reconciliations of Net CAPEX:

Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2021 2020 2021 2020
Total purchases of rental equipment and refurbishments $ (65,282 ) $ (40,034 ) $ (117,817 ) $ (79,682 )
Total proceeds from sale of rental equipment 15,235 5,316 30,437 12,102
Net CAPEX for Rental Equipment (50,047 ) (34,718 ) (87,380 ) (67,580 )
Purchase of property, plant and equipment (10,143 ) (1,668 ) (17,450 ) (3,186 )
Proceeds from sale of property, plant and equipment 2,709 3 16,438 3,843
Net CAPEX $ (57,481 ) $ (36,383 ) $ (88,392 ) $ (66,923 )

Fresh Clashes in Myanmar’s Remote Ethnic Regions Lead to Casualties, Displacement

Clashes between the military and rebel groups in Myanmar’s remote ethnic regions have left several government troops dead and injured in recent days, according to sources, while vulnerable refugees in camps along the country’s northwestern borders are in desperate need of supplies, aid workers said.

Fighting since the Feb. 1 overthrow of the elected government in a military coup has raged from Kachin state in the far north near China to the southern Karen state, displacing about a quarter million people, mostly ethnic minorities. Conflicts are also flaring up in western Chin state, near India and Bangladesh.

At least four armed engagements occurred Tuesday in Kayah state’s Hpruso and Bawlakhe townships between the military’s No. 66 Division and a combined force of fighters from the ethnic rebel Karenni Army (KA) and the Karenni National Defense Force (KNDF) militia formed to protect the public from junta offensives, according to the Karenni National Development Party (KNDPP).

The KNDPP secretary, who goes by the name Daniel, told RFA’s Myanmar Service that the clashes in Htar Lae and Mar Craw Shae villages left 11 junta soldiers dead and at least 20 wounded.

“This No. 66 Division is not local division. They immediately began military operations upon their arrival to the region and are regularly engaged in battles whenever they go,” he said.

“They are involved in clearance operations and have been provoking KNDF troops to enter armed engagements. There will be more battles.”

A resident of the area said nearly 3,000 people from six villages had fled the fighting, despite heavy rains.

“They fled and took shelter nearby because they can’t go any further [in the bad weather],” they said.

Additional fighting occurred on Wednesday night in the Kayah state capital Loikaw, according to residents, who said they heard an initial bomb explosion around 8:30 p.m., followed by a series of artillery blasts and gunfire. Several homes were damaged, they said.

A woman from Loikaw who spoke on condition of anonymity said that a 16-year-old girl from the city’s Naung Yar ward was injured in one of the blasts.

“The military troops were firing their artillery randomly. The girl was in her home and the shell hit, causing a fragment to enter her leg,” she said.

A resident named Palan said the KNDF attacked a military office in Loikaw using an improvised explosive, prompting junta troops to respond.

Loikaw was quiet on Thursday, despite the fighting the night before, residents said.

A KNDF member who declined to be named confirmed to RFA that his group had been secretly working on targeted bombings at the military offices in Loikaw but said they had avoided armed engagements in the city.

“I think there are prospects for armed engagements in the forest, outside the city,” he said. “The military troops will advance toward us. We will resist them. We will not retreat.”

According to the KNDF, military troops also launched offensives on Wednesday near Bee Thu and Khu Pra Taung villages in Kayah’s embattled Demoso township. A combined force of KNDF and KA soldiers responded, killing three soldiers and wounding several, the group said.

IDPs at risk

The military and the KNDF have been engaging regularly since May 20, with the fighting spreading to Loikaw, Demoso and Kayah’s Bawlakhe township, as well as Moe Byae township in Shan state.

The fighting has forced 121,400 civilians to flee their homes in Kayah and Shan states, the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) said last week.

Volunteers told RFA that more than 1,000—half of which are women and children—are currently sheltering at a camp for internally displaced persons (IDPs) in territory controlled by the KNPP near Myanmar’s borders with Thailand and Myanmar.

Maw Pray Myar, the deputy secretary of the Karenni Women Organization (KNWO), said there is a severe shortage of medicine and supplies for women, children, and pregnant women in the camp.

“The rescue committee is administering the camp. They provide the necessary aid to IDPs,” she said.

“The KNWO helps them to provide maternity items and feminine care products. We never have enough of these materials.”

A Karenni medical worker told RFA that the camp lacks the vaccines needed to provide young children with their regular immunizations and is seeking donors to assist.

“We can give the initial vaccines at birth, if the baby is born in the camp, but we cannot provide additional vaccines to these babies,” they said, adding that a failure to administer other regular immunizations could lead to long term health issues.

The medical worker said the camp is also ill-equipped to treat pregnant mothers.

A woman who is seven months pregnant told RFA she is worried about delivering her child because she has not had access to adequate medicine or prenatal care treatment.

“The nurse [Karenni volunteer medic in the camp] gives me some vitamins like Folic acid, but I was only given enough medicine for two weeks,” she said.

Other sources said nearly all the children at the camp are sick with coughs and fevers, but there is nothing to give them. Medical workers said the pandemic had seriously disrupted the supply chain for basic medicines and caused a shortage of medicine for the seasonal flu.

A temporary IDP camp in a KNPP-controlled area of Kayah State, near the border with Thailand, July 15, 2021. RFA
A temporary IDP camp in a KNPP-controlled area of Kayah State, near the border with Thailand, July 15, 2021. RFA

Other clashes

In addition to the clashes in Kayah state, fighting between the military and the Kachin Independence Army (KIA) occurred in Kachin state’s Waingmaw township on Tuesday and Wednesday, according to villagers, who told RFA they are now too afraid to sleep in their homes.

“There was constant firing, with light and heavy artillery from 6:00 p.m. [on Tuesday] to 3:00 or 4:00 a.m.,” said Zin Mar Aye, who lives in the area.

“We saw military helicopters flying around. The blasts damaged some homes and killed some livestock. But there were no human causalities.”

Many residents have fled to area bomb shelters and farms since fighting began in the township on July 30, he said.

Colonel Naw Bu of the KIA told RFA that the military’s No. 58 Infantry Battalion based in Waingmaw was responsible for the shelling and said his troops were not involved.

“We only heard gunfire from the military, but nothing in response,” he said. “I think the military troops were being overly defensive and looked like a full-fledged battle.”

Colonel Naw Bu said the military also fired artillery at the KIA head office in the Kachin state capital Laiza, with three shells landing in the city and two across the border in China.

Meanwhile, in Karen state, fighting between the military and the armed wing of the Karen Natiional Union (KNU), known as the Karen National Liberation Army (KNLA), has occurred on a near-daily basis in Hpa-pun township since May 1, according to Saw Kalae Do, Lieutenant Colonel of the KNLA’s No. 5 Division.

He said armed engagements took place at least 133 times in KNU-controlled territory last month, killing 65 military troops and injuring 101.

“[The military] is always trying to take over the territory and the KNLA’s No. 5 Division is forced to fight back to protect the people and prevent from losing territory,” he said.

“Sometimes, there are three or four armed engagements in a single day.”

Saw Kalae Do said there were at least 580 armed engagements between the military and KNLA troops from May 1 to July 31, during which 349 military troops were killed, compared to just 10 KNLA deaths.

Naw Wah Khu Shee, the spokesperson of Karen Peace Support Team, told RFA there are around 70,000 IDPs in Karen state, many of whom are taking shelter at camps in KNLA-controlled territories along the Thai and Myanmar borders.

“Many IDPs are too afraid to return home. Some elders have returned temporarily to tend to their livestock and homes,” she said.

“The children have remained the jungle. Their lives will be challenging in the rainy season. The road connections have been cut off and they need help—especially food, shelter and security.”

According to the United Nations and aid groups, conflict in Myanmar’s remote border regions has displaced an estimated 230,000 residents since the junta coup.

They join more than 500,000 refugees from decades of conflict between the military and ethnic armies who were already counted as IDPs at the end of 2020, according to the Internal Displacement Monitoring Center, a Norwegian NGO.

Attempts by RFA to contact Major Gen Zaw Min Tun, the military’s Deputy Information Minister, about the reports of armed engagements in Kachin, Kayah and Karen states went unanswered Thursday.

Reported by RFA’s Myanmar Service. Translated by Ye K.M. Maung. Written in English by Joshua Lipes.

US Tech Products Enable Chinese Surveillance in Xinjiang, Researchers Find

U.S. technology companies are still supplying China’s surveillance state with equipment and software for monitoring populations and censoring information, including in the Xinjiang region, despite damning revelations that have led to genocide accusations against Beijing, according to researchers.

At least seven U.S. companies whose technology helped build a Chinese digital surveillance program known as the Golden Shield Project (GSP) are continuing to advance it by selling their products to China, say academic researchers Valentin Weber and Vasilis Ververis.

Their report, “China’s Surveillance State: A Global Project,” published Tuesday, comes as U.S. companies are facing heightened scrutiny over their ties to the Chinese government’s extensive and intrusive use of surveillance technology to monitor and control the populations of Xinjiang Tibet, and Hong Kong.

Launched in 1998, the Golden Shield Project (GSP) is China’s nationwide network-security project, featuring powerful surveillance and censorship technologies deployed by authorities to track political dissidents, activists, ethnic minorities and others seen as threats to the regime or to stability.

“This assistance continues until the present day. As our report shows, Cisco, Dell, HP, IBM, Microsoft, and Oracle still supply vital equipment to Chinese police departments across the country,” write Weber and Ververis.

Their report also says that Intel core processors are “likely being used for surveillance purposes” in the Xinjiang Uyghur Autonomous Region (XUAR) — helping police monitoring at the Urumqi Diwopu International Airport in the regional capital Urumqi (in Chinese, Wulumuqi), one of the few international gateways into and out of Xinjiang.

Chinese policies in the XUAR have come in for particular criticism with the U.S. government and some European legislatures have declared that persecution of the Uyghurs — including a network of internment camps believed to have held up to 1.8 million Uyghurs and other minorities since 2017 — amounts to genocide and crimes against humanity. China angrily denies the allegations.

“As this report demonstrates, entities based in democracies simply ignore that the Chinese companies they collaborate with also provide technology to the Chinese police and military,” says the report, whose findings are based on publicly available government bidding documents for technology products and services.

Troubling Chinese partners

The U.S. companies that sell into the U.S. $260 billion technology market in the world’s second-biggest economy may not be aware of compromising entanglements, the report says. Many of the exports and collaboration done by third parties and subsidiaries complicates due diligence evaluations.

Among the Chinese companies that use U.S. technology to provide surveillance and censorship services are several that have deployed systems in the XUAR, even as Washington has stepped up scrutiny of corporate supply chains to stop American firms from abetting forced labor and other repressive practices.

Beijing Zhongke Fuxing Information Technology Co Ltd., for example, has a “disturbing involvement in Xinjiang,” where it has completed several digital surveillance-related projects and equipped detention centers, the report says.

The company lists U.S. tech concerns Microsoft, IBM, Intel, HP, Oracle, CISCO and Dell EMC’s Greenplum as its commercial partners.

Another Chinese company, Xiamen Dragon Information Technology Co. Ltd., provides public security intelligence platforms, including face capture equipment that uses the Intel XEON dual 6-core processor to identify mobile devices and information from instant-messaging software from smartphones.

The firm, whose international partners include Microsoft, Oracle, Dell, HP, IBM and Cisco, also provides a system that allows police to apply ethnic tags such as Uyghur, Tibetan, and Han Chinese to a subject to help it discover groups of people.

Xiamen Dragon signed an agreement with the Tibet Autonomous Region’s Public Security Department in 2017 to build a big data and cloud computing product to foster a “safe Tibet” and a “stable social atmosphere,” the report says.

China’s Neusoft Corp., whose Golden Shield role included helping the Ministry of Public Security build its National Basic Population Information Resource Database project in the early 2000s, also helps XUAR authorities process data collected from the household registration system, fingerprint collection, and facial recognition. It has subsidiaries in the U.S., Japan, and Europe, and cooperates with Intel on network technology, the researchers say.

uyghur-security-checkpoint-hotan-nov3-2017.jpg
Uyghurs line up for a security checkpoint to enter a bazaar under a screen showing Chinese President Xi Jinping in the city of Hotan in northwestern China’s Xinjiang region, Nov. 3, 2017. Credit: Associated Press

‘Due diligence is ineffective’

“Our findings show that U.S. technology companies’ due diligence is ineffective,” Weber said in an email to RFA. “A change in behavior will unlikely come from companies themselves, since they’re profit driven.”

“If the U.S. government is really concerned about what is happening in Xinjiang…then it needs to make clear to U.S. companies that if they continue to be complicit in China’s surveillance state this may come at a financial cost for them at home,” he said. “This may induce a change in behavior abroad.”

RFA contacted the U.S. companies mentioned in the report for comment, and received responses from only Intel and Microsoft.

“While we do not always know nor can we control what products our customers create or the applications end-users may develop, Intel does not support or tolerate our products being used to violate human rights,” said Nancy Sanchez from Intel Corp.’s corporate communications office in an email.

“Where we become aware of a concern that Intel products are being used by a business partner in connection with abuses of human rights, we will restrict or cease business with the third party until and unless we have high confidence that Intel’s products are not being used to violate human rights,” she said.

Microsoft Corp. has put in place “a robust set of policies intended to safeguard against the misuse of our technology, including refusing to deploy technologies like facial recognition in ways that may put people’s safety or human rights at risk,” said a spokesperson said the Redmond, Washington-based company.

“We require our partners to abide by these policies, and we investigate and enforce violations up to ending the relationship,” the spokesperson said in an email. “We regularly review our operations and engage policymakers, academia, industry, and advocacy organizations to continually improve our policies.”

Weber and Ververis recommend that companies that do business with Chinese tech firms increase due diligence, and they urge governments to review Chinese-owned firms that operate or own subsidiaries in their territories to determine whether the companies supply Chinese public security bureaus and the military.

Their report also recommends that U.S. companies check third-party contractors that buy their products in China to ensure that tech exports are not used in systems deployed by public security bureaus.

‘Absolutely reprehensible’

Uyghur rights groups criticized the U.S. companies for abetting surveillance and other abusive policies toward the 12 million Uyghurs in the XUAR.

“It is absolutely reprehensible that U.S. companies are powering the Chinese state and putting billions of innocent people at risk globally, as well as being complicit in the Uyghur genocide,” said Rushan Abbas, executive director of Washington-based Campaign for Uyghurs, in an email to RFA.

“In particular, as this police state and tools of oppression have been perfected in carrying out the Uyghur genocide, our government must recognize that swift action is needed to halt the sale of American equipment to a genocidal regime,” she said.

Companies providing technology to China despite the genocide accusations, increasing U.S. sanctions of senior Chinese officials, and blacklists of Chinese companies for using Uyghur forced labor, “will be held accountable in the future for their shameful role,” said Dolkun Isa, president of the Germany-based World Uyghur Congress.

“The material and technical support continuously provided by some American and Western high-tech companies to China means they’re actively aiding and abetting China’s genocide of Uyghurs,” he wrote in an email to RFA.

“These companies should immediately stop aiding and abetting China’s genocide of Uyghurs by cutting any material and technical support they provide to a totalitarian regime that not only commits genocide against Uyghurs but also poses the biggest national security threat to the U.S.-led Western democracies,” he said.

The Weber and Ververis report was supported by a grant from UK-based Top10VPN.com, a website that reviews virtual private network services and publishes news and investigations on digital privacy and internet security.

Reported by Roseanne Gerin and Alim Seytoff for RFA’s Uyghur Service. Translated by Alim Seytoff. Written in English by Roseanne Gerin.