omniture

China Bio Energy Reports Fiscal First Quarter 2008 Financial Results

2008-05-16 19:36 1070


-- First Quarter Revenue Increases 208% to $35.6 Million --

-- First Quarter Net Income Increases 385% to $4.7 Million --

XI'AN, China, May 16, 2008 /Xinhua-PRNewswire-FirstCall/ -- China Bio Energy Holdings (OTC Bulletin Board: CBEH), (CBEH or the "Company"), an energy company engaged in the distribution of heavy oil and finished oil products and the production and distribution of bio-diesel fuel, today announced consolidated financial results for the fiscal first quarter ended March 31, 2008.

Net sales for the first quarter of 2008 were approximately $35.6 million, a 208% increase as compared to net sales in the first quarter of 2007 of approximately $11.6 million. Sales of bio-diesel amounted to approximately $6.8 million for the first quarter, or roughly 19% of total revenue. Sales of petroleum-based products, primarily gasoline and petro-diesel, increased by 160%, from $11.1 million in the first quarter of 2007 to $28.8 million in the first quarter of 2008. The increase in sales of petroleum-based products was the result of a general increase in demand for fuel in China, an increase in the export of fuel from Shaanxi province to the rest of China, and an increase in sales to parts of China that cannot be accessed via commercial railway but which the Company can access via military railroad links, which is an ability that is unique to the Company among Shaanxi petroleum distributors. The increase in bio-diesel sales was the result of the completion of the Company's 100,000 ton bio-diesel production facility in October of 2007 which allowed the Company to bring more bio-diesel to market.

Gross profit was approximately $5.0 million for the first quarter of 2008, an increase of 350% as compared to approximately $1.1 million for the first quarter of 2007. Gross margin as a percentage of sales increased 450 basis points to 14.1% in the first quarter from 9.6% in the year ago period. The increase in gross margin was mainly due to the increased portion of sales coming from bio-diesel which had a gross margin of roughly 16% as compared to 11% for petroleum products.

General and administrative expenses were approximately $320,000 for first quarter 2008 as compared to $127,000 for first quarter 2007, an increase of approximately $193,000 or 152%. This increase was a result of the general expansion of revenue and production. For the first quarter of both 2008 and 2007 general and administrative expenses amounted to approximately 1% of sales.

Net income in the first quarter was $4.7 million as compared to $1.0 million in the year ago period, an increase of $3.7 million or 384%. Earnings per diluted share were $0.15 in the first quarter compared with $0.04 in the year ago period, an increase of 275%.

"We are pleased with our financial results for the first quarter of 2008," stated Gao Xincheng, Chief Executive Officer of China Bio Energy. "We were able to leverage a key advantage of our distribution network -- our connection to military railways that reach parts of China that commercial railways cannot -- to significantly increase our revenue. Furthermore, our bio-diesel production facility continued to successfully increase production while maintaining our high quality standards. During the first quarter we produced roughly 50% of our capacity and we expect the production level to continue to grow throughout 2008. As production increases, we also expect that our gross margin from bio-diesel will continue to improve until we eventually reach our expected average of 45%. Overall, 2008 is off to a strong start for all aspects of our business. As we expand our production of bio-diesel and leverage our distribution network we expect 2008 to continue to be a good year for our Company."

About China Bio Energy Holdings

CBEH is a distributor of petroleum related products and a manufacturer and distributor of biodiesel fuel. CBEH sells a variety of related products including, gasoline (used primarily in automobiles), diesel fuel (commercial vehicles, agricultural machines, etc.), heavy oil and slurry (ship boilers, heating furnaces, metallurgical furnaces and other industrial furnaces), residual oil (utilized to manufacture petroleum coke, residual lubricating oil and asphalt or as a feedstock for cracking), and naphtha (used to manufacture ethane, propane, benzene, toluene and xylene). Sales of oil products in 2007 currently accounts for approximately 94% of CBEH's total revenues.

Bio-diesel refers to a clean burning alternative fuel produced from domestic, renewable resources. Bio-diesel is made through a chemical process whereby glycerin is separated from fat or vegetable oil. Bio-diesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a bio-diesel blend and can be used in compression-ignition (diesel) engines with little or no modifications. Bio-diesel is the ideal substitute of petro-diesel and it has many benefits, including excellent environmental performance, superior ignition, compatibility with existing diesel engines, better lubrication to extend the life time of engines, and renewability. Sales of bio-diesel fuel accounted for approximately 6% of the Company's total revenues in 2007 and 19% in the first quarter of 2008. The percent of

bio-diesel in the Company's total revenues will increase greatly as the output of biodiesel increases.

Safe Harbor Statement

This press release contains certain statements that may include

"forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

(Unaudited) For The Three Months Ended March 31,

2008 2007

Sales 35,560,840 11,558,725

Cost of goods sold 30,547,663 10,444,290

Gross profit 5,013,177 1,114,435

General and administrative expenses 319,806 127,101

Income from operations 4,693,371 987,334

Non-operating income (expenses)

Interest income (expenses) (28,271) (19,967)

Other income (expenses) (70) --

Financial expenses (125) (4,444)

Total non-operating expenses (28,466) (24,411)

Net income 4,664,905 962,923

Other comprehensive item

Foreign currency translation

gain 1,243,160 175,187

Comprehensive Income 5,908,065 1,138,110

Basic and diluted weighted average

shares outstanding

Basic 25,454,545 23,954,545

Diluted 31,459,006 23,954,545

Basic and diluted net earnings per

share available to common

stockholders

Basic $0.18 $0.04

Diluted $0.15 $0.04

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

As of March 31, As of December 31,

2008 2007

ASSETS (Unaudited)

CURRENT ASSETS

Cash and cash equivalents $1,552,219 $1,382,371

Restricted cash 200,000 200,000

Accounts receivable, net 5,893,346 288,589

Other receivables 274,947 1,548,681

Prepaid expenses 2,936,408 2,896,493

Advance to suppliers 14,869,631 16,546,506

Inventories 12,391,064 12,082,962

Due from related party 655,855 593,696

Total current assets 38,773,470 35,539,298

CONSTRUCTION IN PROGRESS 1,923,351 --

PROPERTY AND EQUIPMENT, net 8,341,165 8,166,250

TOTAL ASSETS $49,037,986 $43,705,548

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable $ -- $179,617

Advance from customers 1,969,776 499,908

Tax payable 289,120 125,015

Other payables 1,091,031 3,165,677

Accrued expenses 70,540 67,875

Loan payable 1,424,704 1,370,877

Long term notes payable -

current portion 65,743 67,287

Total current liabilities 4,910,914 5,476,256

LONG TERM LIABILITIES 26,118 33,655

Total liabilities 4,937,032 5,509,911

COMMITMENT AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Preferred stock, $.001 par value;

authorized shares 1,000,000; issued and

outstanding 1,000,000 shares 1,000 1,000

Common stock, $.0001 par value;

authorized shares 80,000,000;

issued and outstanding 25,454,545

shares 2,545 2,545

Paid in capital 16,213,404 19,611,938

Statutory reserve 2,051,030 2,051,030

Accumulated other comprehensive

income 3,562,891 2,319,732

Retained earnings 22,270,084 14,209,392

Total stockholders' equity 44,100,954 38,195,637

TOTAL LIABILITIES AND STOCKHOLDERS'

EQUITY $49,037,986 $43,705,548

For more information, please contact:

Dan Joseph

ICR, Inc.

Tel: +86-21-6122-1077

Bill Zima

ICR, Inc.

Tel: +1-203-682-8200

Source: China Bio Energy Holdings
Keywords: Oil/Energy
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