TAIYUAN CITY, China, April 3 /PRNewswire/ -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH), a leading China-based energy trading company operating in Shanxi Province, China, today announced that it expects to see a 5 percent increase in gross profit on sales of its current fuel inventories as a result of the Chinese government mandate to raise the benchmark retail prices of gasoline and diesel oil. The National Development and Reform Commission of China announced on March 24, 2009 that the retail prices of gasoline and diesel oil would be increased 290 RMB (US$42.43) per ton, or 5.3 percent; and 180 RMB (US$26.34) per ton, or 3.7 percent, respectively, as of March 25, 2009.
"Longwei's current fuel inventory is 25,980 metric tons. With the estimated 4 to 5 percent increase on the prices of diesel and gasoline made by the Chinese government, we expect our gross profits will be 5 percent higher for the fourth quarter of fiscal 2009," said Mr. Cai Yongjun, chief executive officer of Longwei Petroleum and Investment Holding.
For the six months ended December 31, 2008, the company's revenues were $98.1 million, an increase of $21.9 million, or an increase of approximately 28.7 percent as compared to $76.2 million for the same period ended December 31, 2007. Longwei reported earned net income of $14.3 million, or an increase of $1.2 million, or approximately 9 percent as compared to $13 million for the six-month period ended December 31, 2007. This was due to increases in sales of petroleum products, especially to power-supply companies in Shanxi Province during the six-month period. Gross revenues for the fiscal year ended June 30, 2008 totaled $143.8 million.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is one of the leading distributors/wholesalers of diesel, gasoline, kerosene and fuel oils in Taiyuan City, the capital of and largest city in Shanxi Province, P.R. China. Longwei Petroleum Investment Holding Limited purchases diesel, gasoline, fuel oil and kerosene from various suppliers. As an intermediary, the company seeks to earn profits by buying diesel, gasoline, fuel oil and kerosene at competitive prices and selling them to other wholesalers. In addition, Longwei also earns revenues by acting as a purchase agent where they charge an agency fee -- a fee which is charged to wholesalers who do not have a license to purchase directly from refineries. Further, the company owns a gas station located on its property where it generates additional profit and revenue. All of the company's operating facilities are located in Taiyuan City, China.
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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.
