The Registrant anticipates that its total revenue for the year ended December 31, 2010 will be $21,775,733, an increase of $11,214,263, or 106%, as compared to $10,561,470 for the year ended December 31, 2009. The increase in revenue is primarily attributable to (1) the increased demand for waste disposal services from the Registrant’s customers as their productivity rebounded from 2009 recessionary levels, (2) the addition of new customers in fiscal year 2010, (3) the addition of service fees generated by the Registrant’s sludge treatment plant that commenced operations in 2010, and (4) revenues generated from the Registrant’s waste disposal operations in connection with the June 2010 oil spill in Dalian.
Service fee revenue received by the Registrant for the year ended December 31, 2010 are expected to be $14,870,852, which would account for 68% of total revenues, an increase of $7,942,012, or 115%, over service fees of $6,928,840 for the year ended December 31, 2009. Service fees accounted for 66% of the Registrant’s total revenue for the year ended December 31, 2009.
Sales of recycled commodities (including cupric sulfate) for the year ended December 31, 2010 are expected to be $6,904,881, which would account for 32% of total revenues, an increase of $3,272,251, or 90%, from revenues of $3,632,630 for the year ended December 31, 2009, which accounted for 34% of revenues for such period. The sharp increase in sales of recycled commodities is primarily due to significantly higher sales volume and selling prices. The average selling price of cupric sulfate was approximately $1,723 per ton in 2010 as compared to $1,285 per ton in 2009, a 34% increase in average unit price. In addition, in 2010, revenues from the sale of methane generated $1,252,465 whereas there were no sales of methane gas in 2009.
The Registrant expects that costs related to providing solid waste, sewage and sludge treatment services increased by $3,245,608 from $1,880,763 for the year ended December 31, 2009 to $5,126,371 for the year ended December 31, 2010. This increase primarily attributed to the increase in cost associated with industrial solid waste which is in line the increase in the Registrant’s revenues, and the additional cost incurred from the Registrant’s sludge treatment plant which was not operational in 2009.
In addition, the Registrant anticipates that costs related to producing recycled waste products (including cupric sulfate and other recycled commodities) increased by $1,739,858 from $2,304,936 for the year ended December 31, 2009 to $4,044,794 for the year ended December 31, 2010, representing an increase of 81%. The Registrant expects the increase to be due mainly to the increased sales of recycled commodities.
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