Longwei Petroleum raises full-year guidance with increased revenue contribution from its Huajie facility
Thursday, Jan 03, 2013
TAIYUAN CITY, China, Jan. 2, 2013 /PRNewswire/ -- 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 it has raised its full-year guidance for the fiscal year ending June 30, 2013 ("FY13").
Longwei now forecasts FY13 revenue to increase 30.7% year-over-year to $667.3 million, versus prior forecasts of $646.3 million. Longwei also projects net income, adjusted for the warrant derivative liability, to increase approximately 23.0% year-over-year to $80.1 million, versus the prior forecast of $77.6 million. The growth is primarily driven by the better-than-expected ramp-up of the new Huajie facility. Longwei now expects revenue contribution from the Huajie facility of $121.0 million in FY13, up 21.0% from the prior forecast of $100.0 million. The guidance does not account for any potential external financing for inventory, which could accelerate growth.
"The Huajie facility has captured significant market share in its region during its first three months of operations, leading to better-than-expected throughput. This, combined with continued organic growth of the Taiyuan and Gujiao facilities, positions us well for strong growth in FY13," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We expect strong quarterly top-line and bottom-line results for the period ended December 31, 2012."
With the addition of the Huajie facility, the Company's total storage capacity has increased to 220,000 metric tons ("mt"). Longwei's storage capacity is reported in metric tons based on the mass or weight of the product converted to volume storage based on the density of the product stored in its tanks, which consists of both above and below ground storage. The volume storage capacity measurement is calculated in accordance with industry standards. The tank inventory has been continuously audited under U.S. GAAP procedures by a U.S.-based, PCAOB-registered public accounting firm for the past six years.
The U.S. Department of Energy has developed an online calculator under its U.S. Energy Information Administration website for the conversion of metric tons to U.S. gallons: http://www.eia.gov/kids/energy.cfm?page=about_energy_conversion_calculator-basics#mogascalc.
For the two months ended November 30, 2012, Longwei reported its revenue from product sales increased 35.0% to $107.5 million, compared to $79.6 million for the two months ended November 30, 2011.
Longwei's product sales volume increased 26.1% for this two-month period year-over-year to 86,128mt, compared to 68,310mt for the two-month period ended November 30, 2011. The increase in revenues was primarily attributable to the increase in the average sales price of petroleum between the periods and the volume growth of the new Huajie facility.
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 110,587mt 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. The Company closed on the Huajie asset purchase on September 26, 2012.
The Company's PRC wholly-owned operating subsidiary, Taiyuan Longwei Economy & Trading Co., was one of 15 companies in Taiyuan City and one of only 140 companies in Shanxi Province recognized on February 15, 2012 as a "Provincial Honorable and Credible Enterprise" for 2010. The Company received the award from the Shanxi Administration for Industry and Commerce based on Longwei's reputation as a company that honors its contractual obligations and maintains its credibility with customers.
"We have worked hard to build a good reputation for the Company over our 17-year operating history. We believe our performance has earned us the trust of our customers and our shareholders, and we will vigorously defend our reputation," stated Mr. Cai.
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.
SOURCE Longwei Petroleum Investment Holding Ltd.
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