Longwei Petroleum Reports October And November Sales Revenue Increases 35.0%
TAIYUAN CITY, China, Dec. 20, 2012 /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 its October and November 2012 product revenue increased 35.0% and sales volume increased 26.1% year-over-year.
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 86,128 metric tons ("mt"), compared to 68,310.0mt 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. During the month of November the Company offered Huajie customers certain one-time incentives and discounts as part of its opening strategy to capture market share in the region. The Huajie facility represented approximately 18.9% or 16,290mt of the total sales volume for the two-month period ended November 30, 2012.
"Bringing the Huajie facility online has positioned us for strong growth in fiscal 2013," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We expect to build our market at Huajie as customers recognize our good customer service and reliable distribution, as we have at our Taiyuan and Gujiao facilities."
Fuel prices in the PRC increased in both August and September 2012 following three consecutive retail price cuts between May and June 2012 due to the fluctuation in the international price of crude oil. Fuel prices were cut for the fourth time this year on November 16, 2012 by approximately 3.5% to better reflect international crude oil prices. Oil prices during the reset period were depressed primarily due to the uncertainty in the global economy from concerns in the Eurozone and the U.S. 'fiscal cliff' prospects. In total, the PRC has raised fuel prices four times and cut prices four times this year. The average price per mt for the two months ended November 30, 2012 increased approximately 7.0% to $1,248 per mt from $1,166 per mt for the two months ended November 30, 2011. " China will continue to make the growth of domestic demand a top priority to keep growth momentum on track in 2013," said Zhang Ping, Minister of the National Development and Reform Commission. ChinaDaily ( December 19, 2012).The chief economist for the PRC at Nomura Securities in Hong Kong, Zhang Zhiwei said "Infrastructure investment is likely to pick up further in 2013, driven by accelerated urbanization." China's economic growth will recover strongly in the first quarter of 2013, to 8.2 percent in the first half of 2013, according to Nomura's forecast. ChinaDaily ( December 19, 2012).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. 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 110,587 metric tons 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. 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, please visit http://www.longweipetroleum.com. You may register to receive the Company's future press releases on the website under 'Email Alert.' 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.comWeb: http://www.longweipetroleum.com Tina XiaoWeitian Group LLCTel: +1-917-609-0333Email: firstname.lastname@example.orgWeb: http://www.weitian-ir.com SOURCE Longwei Petroleum Investment Holding Ltd.
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