TAIYUAN CITY, China, Nov. 5, 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 first fiscal quarter
ended September 30, 2012 sales volume
increased 17.8% year-over-year.
For the three-month period ended September 30, 2012, Longwei reported its product
sales volume increased 17.8% year-over-year to 110,587 metric tons
("mt") compared to 93,862mt for the three-month period ended
September 30, 2011. Fuel prices in
the PRC increased in both August and September following three
consecutive retail price cuts between May and June due to the
fluctuation in the international price of crude oil. The current
retail price level for gasoline of RMB
9,640/mt is approximately the same price level as
May 2012. The Company began to
realize higher average sales prices in September and in this
current quarter ended December 31,
2012.
Longwei plans to hold a conference call on November 14, 2012 to discuss its financial
results for the first fiscal quarter ended September 30, 2012. The Company will file its
Form 10-Q on or before the filing date of November 14, 2012.
"We are pleased to see the up-tick in our sales," said Cai
Yongjun, Chairman and Chief Executive Officer of Longwei. "The
volume increase, combined with recent sales price increases and our
purchase of the Huajie facility, positions us for strong growth in
fiscal 2013."
Apparent oil demand in China,
the world's second-largest consumer, will increase by 340,000
barrels a day in 2013 as refiners increase output amid "modest"
economic recovery, according to Barclays Plc. "Signs of improvement
have emerged and China's underlying oil demand may have bottomed
out and begun to recover," said Sijin
Cheng, a Barclays Singapore-based analyst, in a research
note on October 31, 2012. Apparent
oil demand is the sum of production output and net imports of oil
products, including diesel and gasoline. China Daily (November
1, 2012).
"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 at least nine
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.
"The northern Shanxi region's
growing industrial and vehicle market demand, combined with our
proven ramp-up performance of our Gujiao facility since 2010, which
has now grown to account for approximately 48% of our total product
sales, or US $233.8 million at fiscal
year-end 2012, strengthens our confidence that we can quickly
ramp-up sales at the Huajie facility," said Michael Toups, Chief
Financial Officer of Longwei.
Longwei is scheduling the date of its annual shareholder meeting
to be held during December 2012. The
Company also plans to host an investor and analyst day to invite
shareholders and interested parties to tour its facilities in
January 2013. The Company has
received strong interest from institutional and private investors
in visiting its facilities, including the new Huajie facility. Once
plans are finalized, the Company will release additional
details.
The Company recently reported revenues of US $510.6 million and net income of US $65.1 million for the fiscal year ended
June 30, 2012. At the June 30, 2012 fiscal year-end, the Company
reported total assets of US $342.3
million and a book value per share of $3.31.
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
SOURCE Longwei Petroleum Investment Holding Ltd.