HUIZHOU, China, May 18, 2011 /PRNewswire-Asia-FirstCall/ -- Qiao
Xing Universal Resources, Inc. (NASDAQ: XING) ("XING" or the
"Company"), one of the leading players in the molybdenum-mining
business as well as a company with meaningful size in the resources
industry, today announced unaudited results of its mining business
for the fiscal year 2010 ended December 31,
2010 and for the three months ended December 31, 2010.
For the fiscal year 2010, sales revenues and net income
generated from the mining business were RMB300.4 million (US$45.5
million) and RMB90.6 million
(US$13.7 million), compared to
RMB193.9 million and RMB64.2 million, respectively, for the fiscal
year 2009. During the fourth quarter of 2010, the Company's Chifeng
Haozhou Mining Company Ltd. ("Haozhou") conducted comprehensive
plant maintenance and improvements which caused a slight decline in
molybdenum concentrate production in the fourth quarter of 2010.
However, this was offset by higher quarter-over-quarter
average selling prices, resulting in net income of RMB22.4 million (US$3.4
million) in the fourth quarter, consistent with the third
quarter of 2010. Following these improvements, Haozhou has
now reached its full production capacity of 1,800 tons of ore per
day, or 540,000 tons of ore on an annual basis.
"Our mining operations achieved significant growth in 2010.
With our newly acquired Xinyuan lead-zinc mine and Aolunhua
copper-molybdenum mine starting to contribute to our financial
results this year, we expect the growth of our mining business to
continue to accelerate in 2011 and beyond," commented Mr.
Ruilin Wu, the Company's Chairman
and Chief Executive Officer. "We continue to implement our
strategy of becoming a pure-play resources company and are
currently considering options to divest of our remaining
telecommunications business. We expect to formalize and announce
our final decision in June 2011."
Financial Review of Operations for the
Molybdenum Mining Business for the Three Months ended
December 2010.
- Consolidated revenue from the mining business for the fourth
quarter of 2010 totaled RMB78.0
million (US$11.8 million).
Gross profit was RMB26.6 million
(US$4.0 million) while gross margin
was 34.1%. Net income totaled RMB22.4
million (US$3.4 million) in
the fourth quarter.
- Molybdenum concentrate production in the fourth quarter of 2010
decreased 4.9% from 982 metric tons in the third quarter of 2010 to
934 metric tons (2.06 million pounds), mainly due to plant
maintenance and improvements. This production was equivalent
to 449 metric tons (0.99 million pounds) of molybdenum metal.
- The average cost of sales of molybdenum metal produced in the
fourth quarter of 2010 was RMB114,405
(US$17,334) per metric ton, or
RMB51.88 (US$7.86) per pound. The average cash cost of
molybdenum metal produced in the fourth quarter of 2010 was
RMB63,302 (US$9,591) per metric ton, or RMB28.71 (US$4.35)
per pound. (The Company produces molybdenum concentrate but
does not engage in smelting operations, so the cash cost does not
include the cost of smelting).
- Capital expenditures for the mining business in the fourth
quarter of 2010 totaled RMB33.2
million (US$5.0 million).
These capital expenditures were primarily used for construction and
improvements at the Haozhao molybdenum mine.
- The average price of molybdenum concentrate sold by Haozhou for
the fourth quarter ended December 31,
2010 was RMB2,057 (US$312) per metric ton unit, representing an
increase of 3.3% from RMB1,992 per
metric ton unit from the third quarter of 2010.
Financial Review of Operations for Molybdenum Mining
Business for Fiscal 2010
- Consolidated revenues from the mining business for fiscal 2010,
ended December 31, were RMB300.4 million (US$45.5
million), compared to RMB193.9
million in fiscal 2009, an increase of 55%. The business
generated a gross profit of RMB126.9
million (US$19.2 million) in
2010, compared to RMB100.6 million in
2009. Gross margin was 42.2%. Net income from the mining business
in 2010 was RMB90.6 million
(US$13.7 million), compared to
RMB64.2 million in 2009, an increase
of 41%.
- Molybdenum concentrate production in 2010 was 3,465.1 metric
tons, which contained 1,667.6 metric tons (3.68 million pounds) of
molybdenum metal. This compares to molybdenum concentrate
production in 2009 of 1,929.6 metric tons, which contained 929.9
metric tons of molybdenum metal.
- The average cost of sales per metric ton of molybdenum metal
produced in 2010 was RMB104,223
(US$15,791), or RMB47.27 (US$7.16)
per pound. This compares to the average cost of sales per
metric ton of molybdenum metal produced in 2009 of RMB100,360, or RMB45.62 per pound. The primary reason for
the increase in the cost of sales was due to a reclassification of
approximately RMB6 million of mineral
resource compensation tax charge from administrative expenses to
cost of sales in 2010 under US GAAP-based accounting, on the
recommendation of the Company's auditor.
- Capital expenditures incurred in the mining business were
RMB95.3 million (US$14.4 million) for 2010, compared to
RMB113.0 million in 2009. All of the
capital expenditures incurred in 2010 were related to enhancements
of the Company's mining facilities.
Mining Business Outlook
- So far in 2011, the Company's Haozhao molybdenum mine reached
full production capacity of 540,000 metric tons of ore per year.
XING's 34.5%-owned Aolunhua molybdenum mine, the biggest molybdenum
mine in Asia, is striving to
improve efficiencies in its day-to-day management and operations to
increase profitability.
- XING's 100%-owned Xinyuan lead-zinc mine is expected to
increase production capacity to process 2,000 metric tons of ore
per day by the end of the third quarter of 2011.
Upcoming Events
- XING will release its consolidated financial results, including
the results of its telecommunications business, by the end of
May 2011.
- Upon filing of its 2010 Annual Report on Form 20-F with the SEC
and announcements of its final decision regarding the
telecommunication business, the Company will hold a conference call
with investors to discuss both items.
Foreign Exchange Rate Used
The United States dollar (US$)
amounts disclosed in this press release are presented solely for
the convenience of the reader. Translations of the amounts from
Renminbi (RMB) into United States
dollars for the convenience of readers were calculated at the noon
purchase rate of US$1.00 =
RMB6.60 on December 31, 2010 in New York City for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of
New York. No representation is
made that the RMB amounts could have been, or could be, converted
into U.S. Dollars at that rate on December
31, 2010, or on any other specific date. The percentages
stated are calculated based on RMB.
About Qiao Xing Universal Resources, Inc.
Qiao Xing Universal Resources, Inc. is a leading player in the
molybdenum mining industry with meaningful size in the resources
industry. XING focuses on mining and processing rare metal ores and
several strategically important base-metal ores, including
molybdenum, copper lead and zinc. XING currently owns a 100% equity
interest in Balinzuo Banner Xinyuan Mining Co., Ltd. and a 34.53%
equity interest in Chifeng Aolunhua Mining Co., Ltd, as well as the
right to receive 100% of the expected economic residual returns
from Chifeng Haozhou Mining Co., Ltd.
XING was one of the first Chinese companies to be listed on
NASDAQ (in 1999) as one of the leading players in the
telecommunication-terminal product business in China. In 2007, XING made the strategic
decision to diversify into the resources industry. Since then, XING
has made several acquisitions in the resources industry and
divested its fixed-line and budget mobile phone businesses.
To reflect this change, XING changed its corporate name to
Qiao Xing Universal Resources, Inc., effective January 28, 2010.
XING continues to evaluate acquisition opportunities in the
resources area to strengthen its foothold in the industry. At the
same time, XING is also working to divest its remaining
mobile-phone business to become a pure-play resources company.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. These include statements about our
expectations, plans, objectives, assumptions, performance or future
events. In some cases, you can identify forward-looking statements
by terminology such as "anticipate," "estimate," "plans,"
"potential," "projects," "continuing," "ongoing," "expects,"
"management believes," "we believe," "we intend" and similar
expressions. These statements involve estimates, assumptions and
uncertainties that could cause actual results to differ materially
from those expressed. You should not place undue reliance on these
forward-looking statements. Forward-looking statements
include all statements other than statements of historical facts,
such as statements regarding the Company's plans to improve
efficiencies in the day-to-day operations of its mines, the
Company's plans to enhance production processes and management
efficiencies, the Company's plans to develop more efficient
production processes for molybdenum exploration and extraction and
the Company's transition to a pure resources company and bigger
player within the resources industry. Readers are cautioned that
forward-looking statements are not guarantees of future performance
and actual results may differ materially from those projected,
anticipated or assumed in the forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement. Information regarding these factors is included in our
filings with the SEC. The Company does not undertake any obligation
to update any forward-looking statements. All information provided
in this press release is as of May 18,
2011.
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Company
Contact:
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Qiao Xing Universal
Resources
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Rick Xiao, Vice President
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Phone: +86-752-282-0268
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Email:
rick@qiaoxing.com
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USA IR AGENCY
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CCG Investor Relations
Inc.
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Mabel Zhang, Associate
Partner
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SOURCE Qiao Xing Universal Resources, Inc.