Longwei Petroleum Reports Fourth Quarter Revenues Up Approximately 6% Year-Over-Year To $136 Million
TAIYUAN, China, July 17, 2012 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE Amex: 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 reported its revenues for its fourth quarter ended June 30, 2012 were up approximately 6% year-over-year to $136 million.
For the 12-month period ended June 30, 2012, Longwei reported its unaudited revenues were up approximately 6% year-over-year to over $510 million. During this period, the retail price of gasoline was adjusted by the National Development and Reform Commission ("NDRC"), the PRC's top economic planning organization, six times during a period of fluctuating international crude oil prices. The most recent retail price adjustments of gasoline in the PRC was downward twice during the fourth quarter, with adjustments in both May and June totaling RMB 860 per metric ton ("mt") (approximately US$136 per mt), or down 8.6% during the fourth quarter compared to the third-quarter high.
"The cut is the steepest since the (PRC) government's current pricing system was introduced in December 2008 and is also interpreted as an attempt by Chinese authorities to contain inflation and stimulate consumption." ( China SZ Energy News, June 12, 2012 )LPH previously released guidance for FY2012 of $520 million (or 1.9% higher than actual) for the 12-month period ended June 30, 2012. The Company maintains its net earnings guidance of $64 million. "We are pleased that we are on track with our net earnings guidance for the year, despite the international crude oil price fluctuations," stated Michael Toups, CFO of Longwei. "We continue to manage our business to try to maintain our product profit margins. We have also balanced our cash flow while maintaining an $87 million deposit for the Huajie Petroleum asset purchase and managing our inventory position. We estimate an organic growth rate of approximately 7% to 8% for our two existing facilities this year due to the cooling of the international economic environment and its impact on the PRC. We have tried to make a conservative estimate tied to GDP growth. Our real driver for growth in this new fiscal year ending June 30, 2013 will be the ramp-up of the Huajie Petroleum facility." The Company continues to use its working capital to increase its inventory position and product availability based on the current changes in the market price. "We look forward to finalizing the Huajie Petroleum asset purchase, which will add another 100,000 metric tons to our storage capacity and solidify our position as one of the largest private fuel distributors in the PRC," stated Mr. Cai Yongjun, Chairman and CEO of Longwei.
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