Longwei Petroleum announces financial results for first quarter of fiscal 2013
Wednesday, Nov 14, 2012
TAIYUAN CITY, China, Nov. 13, 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 its financial results for the first quarter ended September 30, 2012.
"Our fiscal first quarter saw the completion of two very important initiatives," stated Mr. Cai Yongjun, Chairman and CEO of Longwei. "First, independent auditors completed a tax reconciliation of our SAT and SAIC filings with our SEC filings. The results verified no material differences. Second, we are very pleased to have completed our cash purchase of the Huajie Petroleum assets, which have nearly doubled our overall capacity to 220,000 metric tons. Together, we believe these accomplishments position us for strong shareholder value improvement."
"China's demand for oil is likely to show its largest increase in two years in the fourth quarter as the country's economic growth begins to pick up, according to industry experts." China Daily (November 9, 2012). The article continues, "In the fourth quarter, China is expected to use 9.64 million barrels of oil a day, which would result in the largest quarterly increase since the same period of 2010, according to the International Energy Agency and Sanford C. Bernstein & Co."
"We continue to capitalize on the growing domestic demand for petroleum products in China, and as proven in our first-quarter results, expect strong top-line and bottom-line results in fiscal 2013," stated Michael Toups, Chief Financial Officer of Longwei. "Our Huajie facility has come on-line in October and will be a major catalyst for growth in the quarters ahead."
Summary of First Quarter Results of Operations
Revenues - During the first quarter ended September 30, 2012, Longwei's sales increased 12.4% to $133.4 million, up from $118.6 million in the first quarter of fiscal 2012. The Company's Taiyuan and Gujiao fuel storage facilities contributed revenues of approximately $70.6 million and $57.6 million, respectively, during the first quarter. The sales increase was primarily due to the increase in product sales volume of 17.8% year-over-year as a result of improving economic conditions and regional growth. However, the weighted average sales price per metric ton ("mt") of petroleum products sold decreased approximately 3.8% to $1,159/mt from $1,205/mt for the quarters ended September 30, 2012 and 2011, respectively. The Company continues to allocate product sales between its facilities to better service its customer base.
Longwei's revenues are derived from two segments: direct product sales and agency fees. For direct product sales, the Company purchases, takes physical possession of, and sells diesel, gasoline, fuel oil and solvents. For agency fees, the Company acts as a purchasing agent, earning a fee or commission by allowing intermediaries to use its licenses and buying power to purchase directly from the refineries. During the quarter ended September 30, 2012, compared to the year-ago period, Longwei's product sales increased $15.1 million or 13.3% from $113.1 million to $128.2 million, and agency fees decreased $0.3 million or 5.6% from $5.5 million to $5.2 million.
SOURCE Longwei Petroleum Investment Holding Ltd.
To access over 3,000 of the latest oil projects from across the world visit Projects OGP for free trial today