Longwei Petroleum Reports Quarterly Sales Volume Increase
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 firstname.lastname@example.org. 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 OfficerTel: U.S. Office +1-727-641-1357Email: email@example.com Web: http://www.longweipetroleum.com
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