TAIYUAN CITY, China,
Oct. 24, 2012 /PRNewswire-FirstCall/ -- Longwei Petroleum
Investment Holding Ltd. (NYSE MKT: LPH) ("Longwei" or the
"Company"), an energy company engaged in the storage and
distribution of finished petroleum products in the People's Republic of China ("PRC"), today
updated its guidance for the fiscal year ended June 30, 2013.
Longwei expects revenue growth of approximately 26.6% to
$646.3 million, and net income growth
of approximately 24.2% to $77.6
million, adjusted for the warrant derivative liability, for
the fiscal year ended June 30,
2013. The growth is driven primarily by the ramp-up of the
Huajie facility and organic growth at the Company's two existing
facilities. The Company forecasts it can maintain
profitability within the range-band of its historical margins, as
proven by its track record during times of volatile fluctuations in
the price of international crude oil.
"We were pleased to have closed on the Huajie asset purchase
using our own cash resources without dilution to our shareholders,
and we are now operational at the facility," said Michael Toups, Chief Financial Officer of
Longwei. "We expect meaningful revenue contribution from Huajie
beginning in the second half of fiscal 2013 as we ramp up our
operations and sales efforts. Based on our experience during
the Gujiao ramp-up phase in 2010, we are confident we can develop
this new market quickly."
The Company's operations are concentrated in the central PRC,
primarily Shanxi Province.
Shanxi is the leading
coal-producing region in the PRC and a growing economic gateway to
central and southwest China. The
region is mountainous and has no oil reserves, pipelines or
refineries within the province. Therefore, petroleum products have
to be brought in from outside of the province via rail or truck,
either from refineries in the neighboring provinces or from the
relatively more numerous refineries in the coastal provinces of the
northeast PRC. Consequently, the Company has committed significant
resources to its locations for ease of transportation, logistics
and storage. The growing industrial and consumer base within the
province is dependent on the timely delivery of petroleum products
as offered by the Company.
The GDP growth rate for Shanxi
during 2011 was 13%, according to the China Daily
(March 13, 2012), and it is expected
to be approximately 10% for 2012, which outpaces the general
economic growth estimates of 7.5% in the PRC. The provincial
government has estimated the fixed-asset investment in Shanxi to be RMB 5
trillion (approximately $790
billion) over the next five years, according to the China
Daily (September 13, 2011).
The provincial government also recently announced an additional
RMB 1 trillion (approximately
$158 billion) in local development
projects as part of the region's industrial stimulus plan,
according to China Securities News (August 23, 2012). The Company believes its
locations within Shanxi Province
are advantageous to the growth of its business model.
"The Huajie acquisition nearly doubles our total storage
capacity to 220,000 metric tons and extends our reach into the
fast-growing industrial area of northern Shanxi Province," said Cai Yongjun, Chairman
and Chief Executive Officer of Longwei. "With the addition of
the Huajie facility, we have strengthened our lead as the largest
private fuel storage and distribution business in the province and
are better positioned to capitalize on the rising demand for
petroleum products in our regional market."
"As we continue to build upon the strong foundation we have
established over our 17-year operating history, we remain committed
to servicing our customers, increasing transparency in our
reporting, and building value for our shareholders," added Mr.
Toups.
Longwei recently reported revenues of US $510.6 million and net income of US $65.1 million for the fiscal year ended
June 30, 2012. At the
June 30, 2012 fiscal year-end, the
Company reported total assets of US $342.3
million and a book value per share of $3.31.
The financial guidance for fiscal year 2013 reflects the
Company's current estimates based on the conditions and trends
known to the Company as of the date of this release. Results
are subject to change based upon further review by management and
future changes in market and operating conditions.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy
company engaged in the storage and distribution of finished
petroleum products in the People's
Republic of China. The Company's oil and gas operations
consist of transporting, storing and selling finished petroleum
products, entirely in the PRC. The Company's headquarters are
located in Taiyuan City, Shanxi
Province. The Company has a storage capacity for its
products of 220,000 metric tons located at three storage facilities
within Shanxi: Taiyuan, Gujiao and
Huajie, which have an individual storage capacity of approximately
50,000 metric tons ("mt"), 70,000mt, and 100,000mt,
respectively. The Company has the necessary licenses to
operate and sell petroleum products not only in Shanxi, but throughout the entire PRC. The
Company's storage tanks have the largest storage capacity of any
non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at
competitive prices with timely delivery to transportation
companies, coal mining operations, power supply customers,
large-scale gas stations and small, independent gas stations. The
Company also earns revenue from agency fees by acting as a
purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel
and gasoline at two retail gas stations, each located at the
Company's Taiyuan and Gujiao facilities. The Company seeks to
continue to expand its customer base and distribution platform
through the utilization of its large storage capacity, which allows
the Company the flexibility to take advantage of pricing, supply
and demand fluctuations in the marketplace.
Longwei was recently named to the Forbes list of
"Asia's 200 Best Under a Billion"
from a universe of 15,000 companies. Forbes ranked the
companies based on sales growth, earnings growth and return on
equity in the past 12 months and over three years. As was
reported, Longwei's three-year track record is 45% sales growth,
28% earnings per share growth and 28% return on equity. The
Forbes article can be found at:
http://www.forbes.com/sites/christinasettimi/2012/07/25/asias-200-best-under-a-billion.
For further information on Longwei Petroleum Investment Holding
Limited, please visit http://www.longweipetroleum.com. You may
register to receive Longwei Petroleum Investment Holding Limited's
future press releases or request to be added to the Company's
distribution list by contacting Dave
Gentry at info@redchip.com.
Forward-Looking Statements
Certain statements contained herein constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations, estimates and
projections about Longwei's industry, management's beliefs and
certain assumptions made by management. Readers are cautioned that
any such forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Because such statements
involve risks and uncertainties, the actual results and performance
of the Company may differ materially from the results expressed or
implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Longwei's operations are conducted
in the PRC and, accordingly, are subject to special considerations
and significant risks not typically associated with companies in
North America and Western Europe. These include risks associated
with, among others, the political, economic and legal environment
and foreign currency exchange. The Company's results may be
adversely affected by changes in the political and social
conditions in the PRC and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures,
currency conversion, remittances abroad, and rates and methods of
taxation. Other potential risks and uncertainties include but are
not limited to the ability to procure, properly price, retain and
successfully complete projects, and changes in products and
competition. Unless otherwise required by law, the Company also
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made here. Readers should review
carefully reports or documents the Company files periodically with
the Securities and Exchange Commission.
Contact:
At the Company:
Michael
Toups, Chief Financial Officer
Tel: U.S. Office +1-727-641-1357
Email: mtoups@longweipetroleum.com
Web: http://www.longweipetroleum.com
Investor Relations:
Mike
Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: mike@redchip.com
Web: http://www.redchip.com
SOURCE Longwei Petroleum Investment Holding Ltd.