TAIYUAN CITY, China, Nov. 26, 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 announced that its October 2012 product revenue increased 32.8% and
sales volume increased 20.2% year-over-year.
For the month ended October 31,
2012, Longwei reported its revenue from product sales
increased 32.8% to $53.1 million,
compared to $40.0 million for the
month ended October 31, 2011.
Longwei's product sales volume increased 20.2% year-over-year to
41,811.4 metric tons ("mt"), compared to 34,780.0mt for the month
ended October 31, 2011. The
increase in revenues was primarily attributable to the increase in
the average sales price of petroleum and the volume growth of the
new Huajie facility, which contributed $9.2
million in product revenues during its first month in
operation.
Fuel prices in the PRC increased in both August and September 2012 following three consecutive retail
price cuts between May and June 2012
due to the fluctuation in the international price of crude oil.
The current retail price level for gasoline is RMB 9,640/mt. The Company began to realize
higher average sales prices and product gross profit margin in
September 2012 and expects a strong
quarter ending December 31,
2012.
"The volume increase, combined with recent sales price increases
and bringing the Huajie facility online, positions us for strong
growth in fiscal 2013," said Cai Yongjun, Chairman and Chief
Executive Officer of Longwei.
The petroleum market continues to open and expand for
non-state-owned enterprises in the PRC. Apparent oil demand
in China, the world's
second-largest oil consumer, is estimated to increase by 340,000
barrels a day in 2013, according to an October 31, 2012 report from Barclays PLC.
The PRC recently increased import quotas to support the
additional demand and for the first time issued quotas to PRC oil
companies other than Sinopec (NYSE: SNP) and PetroChina (NYSE:
PTR). "Compared with total crude imports, the quantity
permitted by the quota is small, but has a great amount of
significance," said Liao Na,
Information and Operating Director of ICIS C1 Energy, a
Shanghai-based energy consultancy
firm. "This shows that China will be more open to crude imports and
will gradually allow private companies and even foreign companies
to share the market with companies with government affiliations."
China Daily
(November 9, 2012). One of the
private companies granted an import quota from the PRC is a
refinery that supplies Longwei.
"The Huajie facility nearly doubles our storage capacity to a
total of 220,000 metric tons and extends our reach into the
fast-growing industrial area of northern Shanxi Province," stated Mr. Cai. "Since
opening the facility, we have signed contracts with 16 major
regional industrial companies in mining, steel and logistics, and
we are in negotiations with several more."
Longwei expects year-over-year 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 ending June 30, 2013. This growth rate does not
account for any external financing for inventory, which could
accelerate growth. The growth is driven primarily by the
ramp-up of the Huajie facility and organic growth at the Company's
two existing facilities.
Longwei recently reported revenues of US $133.4 million and non-GAAP net income of
$18.3 million or $0.18 per share, adjusted for the non-cash
warrant derivative liability charge, for the first fiscal quarter
ended September 30, 2012. The
Company's product sales volume increased 17.8% year-over-year to
110,587 metric tons during the quarter. As of September 30, 2012, the Company reported total
assets of US $360.0 million and book
value per share of $3.47.
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
Tina Xiao
Weitian Group LLC
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
Web: http://www.weitian-ir.com
SOURCE Longwei Petroleum Investment Holding Ltd.