April and May Revenues Up 128% year-over-year to $72.9 Million
TAIYUAN CITY, China, July 10 /PRNewswire-Asia/ -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH) ("Longwei"), a leading oil and fuel wholesaler and distributor operating in Shanxi Province, China, today announced unaudited financial results for the two months ended May 31, 2010, as well as an update on the performance of its Gujiao storage facility, which began full-time operations in January of this year.
Total revenues for the two months ended May 31, 2010 were $72.9 million, up 128% from $32.0 million for the same period last year. Gross profit for the two-month period was $15.4 million, up 151% from $6.1 million. Revenues and gross profit for the eleven months ended May 31, 2010 were $300.4 million and $60.4 million, up 67% and 62% respectively from the same period last year. Management reaffirmed that the Company's performance in the fiscal year ended June 30, 2010 will exceed its earlier guidance.
Longwei operates fuel storage facilities at Taiyuan and Gujiao with storage capacities of 50,000 metric tons (mt) and 70,000 mt, respectively. The new Gujiao facility has contributed $59.1 million in revenues since coming on-line full-time in January 2010. The Company has added seven new, large customers using the Gujiao facility, including Shanxi Thermoelectricity Factory, Zhangzhe Power Plant, and Tonghang Bus Shipping Company, which have committed to minimum annual purchases of 10,000 mt, 7,000 mt, and 5,000 mt, respectively.
The Company expects continued favorable market and industry conditions to boost revenue growth and profitability in the first half of fiscal 2011. Xinhua News Agency, the official press agency of the Chinese government, recently reported that China's oil demand is expected to grow 9% in the second half of 2010 over the same period of the previous year and could reach 35.5 million metric tons per month. Monthly oil production is forecasted to grow at 4.6% for the six-month period, only about half as fast as demand, which will increase Chinese demand for imported oil. The world's second-largest energy consumer is also projected to add roughly 30 million tons of oil-refining capacity in 2010, which represents a 10% increase over 2009 and is expected to heighten demand for fuel storage facilities like those operated by Longwei.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding, Limited (the "Company") is an energy company that, through its subsidiaries, engages in oil and gas operations in the People's Republic of China ("PRC"). Oil and gas operations consist of transporting, marketing and selling finished petroleum products. The Company's headquarters and primary facilities are located in Taiyuan City, Shanxi Province ("Shanxi"). The Company's second facility is located in Gujiao, Shanxi. The Company purchases diesel, gasoline, fuel oil and kerosene (the "Products") from various petroleum refineries in the PRC. The Company is 1 of 3 licensed intermediaries in Taiyuan City and the sole licensed intermediary in Gujiao that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell 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 to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations. The Company also earns revenue by acting as a purchasing agent for other intermediaries in Shanxi and through the sale of diesel and gasoline at gas stations located at each of the Company's facilities. The sales price and the cost basis of the Company's products are largely dependent on regulations and price control measures instituted and controlled by the PRC government as well as the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond the Company's control.
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.
