TAIYUAN CITY, China, January 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.
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 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
Tina Xiao
Weitian Group LLC
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
Web: http://www.weitian-ir.com
