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.
Longwei also recently announced it has received the independent report (the "Tax Reconciliation Report") from Child, Van Wagoner & Bradshaw, PLLC, Certified Public Accountants ("CVB"), commissioned by the Company's Audit Committee. The Tax Reconciliation Report reviewed the Company's management reports compared to taxes paid and financial statements filed in the PRC with the Company's publicly reported filings with the Securities and Exchange Commission (the "SEC") for the periods beginning July 1, 2009 to March 31, 2012.
Tax Reconciliation Report -- Summary Findings:
1. State Administration of Taxation (the "SAT") filed corporate income tax ("CIT") and value added tax ("VAT") Filings - No variance in revenues reported under US Generally Accepted Accounting Principles ("US GAAP").
2. State Administration for Industry and Commerce ("SAIC") Income Statement Filings - On a consolidated income statement basis, there is no difference in revenues, and net income has a 1.1% or less difference between the US GAAP and the PRC financial statements and tax filings.
3. SAIC Balance Sheet Filings - On a consolidated balance sheet basis, there is a less than 1.0% difference in total assets, total liabilities and total stockholders' equity between the US GAAP and the PRC financial statements and tax filings.
The procedures and findings of the Tax Reconciliation Report can be found on the Company's website at www.longweipetroleum.com under the "Investor Relations" section.
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, storage 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 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, 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 coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee 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 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.
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
U.S. Office +1 727-641-1357
mtoups@longweipetroleum.com
http://www.longweipetroleum.com
Investor Relations:
Mike Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: info@redchip.com
Web: http://www.redchip.com
