HUIZHOU, Guangdong province, China, December 2, 2011 /PRNewswire-Asia-FirstCall/ -- Qiao Xing Universal Resources, Inc. (NASDAQ: XING) ("the Company" or "XING"), a leading company in the molybdenum mining business as well as a company with substantial assets in the resources industry, today announced unaudited financial results for the six months ended June 30, 2011.
First-Half Highlights:
The decrease in sales was due mainly to lower selling prices of molybdenum metal compared to last year and a decrease in the average selling price ("ASP"), as well as in sales volume of handsets.
The decrease in non-operating income was mainly due to:
Financial Review of Operations for the Molybdenum Mine Business
Investment in Aolunhua Mining Co., Ltd.
The Company acquired a 34.53% stake in Aolunhua in late December 2010, and Aolunhua has started to contribute positively to the Company. For the first half of 2011, the Company's share of pretax profit generated by Aolunhua was RMB 7.2 million (US $1.11 million).
Financial Review of Operations for the Telecommunications Business
The decrease in revenue in the first half of 2011 compared to the first half year of 2010 was primarily due to a decline in handset revenue, which decreased to RMB 151.9 million (US $23.5 million) in the first half of 2011 from RMB 319.0 million in the first half of 2010. The decrease in handset revenue was, however, offset by an increase in revenue from the trading of handset materials and components, which contributed sales revenue of RMB 83.1 million (US $12.9 million) in the first half of 2011. Minimal revenue from the trading of handset materials and components was recorded in the first half of 2010. The abovementioned decline in handset revenues was primarily due to lower handset shipments and a decrease in the ASP of handset products sold in the first half of 2011, as compared to the first half of 2010. The ASP of handset products decreased to RMB 347 (US$53.7) in the first half of 2011, as compared to RMB 513 in the first half of 2010. Total handset shipments in the first half year of 2011 were 437,000 units, as compared with 621,000 units in the same period of 2010. The decrease in handset shipments, compared to 2010, was primarily due to a slow-down in shipments amid intense competition in the PRC handset market and poor reception of new-product offerings in the first half of 2011.
The gross loss in the first half year of 2011 was RMB 77.6 million (US $12.0 million), as compared to last year's loss of RMB 10.9 million. Gross margin was a negative 32.5% in the first half year of 2011, compared with positive 3.3% in the same period of 2010. The year-over-year decline in gross margin resulted primarily from the decline in ASPs and the sale of products at below-cost to clear inventories.
Selling and distribution ("S&D") expenses in the first half of 2011 were RMB 47.8 million (US $7.4 million), compared with RMB 60.9 million in the same period of 2010. The decrease in S&D expenses in the first half of 2011 was primarily due to lower advertising and promotion costs which were cut due to the poor sales performance of products launched in the first half of 2011.
General and administrative ("G&A") expenses were RMB 23.9 million (US $3.7 million), compared with RMB 23.5 million in the same period of 2010. Share-based compensation expenses recognized in G&A were RMB 8.9 million (US $1.4 million) in the first half of 2011, compared to RMB 9.3 million in the first half of 2010.
Research and development ("R&D") expenses were RMB 13.1 million (US $2.0 million) for the first half of 2011, compared to RMB 9.4 million in the same period of 2010. The higher R&D expenses compared with the same period of last year were primarily due to higher R&D investments to improve future product offerings.
Operating loss for the first half of 2011 was RMB 162.4 million (US $25.1 million), as compared to operating loss of RMB 85.1 million in the first half of 2010.
Foreign Exchange Rates
The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from Renminbi (RMB) into United States dollars for the convenience of the reader were calculated at the noon buying rate of US $1.00 = RMB 6.4635 on June 30, 2011 in New York City for the cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2011, or at any other certain date. The percentages stated are calculated based on RMB.
- FINANCIAL TABLES FOLLOW -
Qiao Xing Universal Resources, Inc. and its Subsidiaries | ||||||
Condensed Unaudited Consolidated Profit and Loss Account | ||||||
For six months ended June 30 | ||||||
2010 | 2011 | |||||
RMB'000 | RMB'000 | US$'000 | ||||
Net sales | 465,856 | 387,398 | 59,936 | |||
Cost of goods sold | (388,557) | (402,913) | (62,337) | |||
Gross profit | 77,299 | (15,515) | (2,400) | |||
Total operating expenses | (103,920) | (100,060) | (15,481) | |||
Loss from operation | (26,621) | (115,575) | (17,881) | |||
Non-operating income | 117,019 | 35,272 | 5,457 | |||
Share of results of associates | - | 7,163 | 1,108 | |||
Income (loss) before income tax | 90,398 | (73,140) | (11,316) | |||
Provision for income tax | (17,962) | (8,594) | (1,330) | |||
Net income (loss) after tax | 72,436 | (81,734) | (12,645) | |||
Attibutable to non-controlling interest | 28,167 | 63,777 | 9,867 | |||
Net income (loss) for the period | 100,603 | (17,957) | (2,778) | |||
Basic earnings (loss) per common share: | ||||||
Before extraordinary gain | 1.12 | (0.18) | (0.03) | |||
Weighted average number of shares outstanding | ||||||
Basic | 89,897,243 | 98,801,903 | 98,801,903 | |||
Qiao Xing Universal Resources, Inc. and its Subsidiaries | |||||||
Condensed Unaudited Consolidated Balance Sheet | |||||||
December 31, | June 30, | ||||||
RMB'000 | RMB'000 | US$'000 | |||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 3,178,157 | 2,740,362 | 423,975 | ||||
Restricted cash | 37,759 | 122,023 | 18,879 | ||||
Accounts receivable, net | 248,408 | 309,727 | 47,920 | ||||
Inventories | 61,848 | 54,052 | 8,363 | ||||
Prepayment to suppliers | 86,302 | 159,614 | 24,695 | ||||
Prepaid expenses | 872 | 383 | 60 | ||||
Other current assets | 36,657 | 46,113 | 7,135 | ||||
Due from related parties | 25 | 24 | 4 | ||||
TOTAL CURRENT ASSETS | 3,650,028 | 3,432,298 | 531,031 | ||||
NON-CURRENT ASSETS | |||||||
Property, machinery and equipment, net | 269,895 | 290,220 | 44,902 | ||||
Proven and probable reserves | 672,610 | 623,789 | 96,510 | ||||
Construction-in-progress | 61,824 | 104,151 | 16,114 | ||||
Investment in affliate | 184,860 | 192,023 | 29,709 | ||||
Value beyond proven and probable reserves | 67,295 | 67,295 | 10,412 | ||||
Other acquired intangible assets, net | 352,800 | 526,874 | 81,516 | ||||
Deferred income taxes - non-current | 1,041 | 1,549 | 240 | ||||
TOTAL NON-CURRENT ASSETS | 1,610,325 | 1,805,901 | 279,403 | ||||
TOTAL ASSETS | 5,260,353 | 5,238,199 | 810,434 | ||||
LIABILITIES, MINORITY INTERESTS AND | |||||||
CURRENT LIABILITIES | |||||||
Short-term bank borrowings | 446,000 | 446,004 | 69,004 | ||||
Accounts payable | 40,350 | 73,409 | 11,358 | ||||
Other payables | 100,882 | 77,805 | 12,038 | ||||
Accrued liabilities | 23,430 | 63,404 | 9,810 | ||||
Deposits received | 1,310 | 1,310 | 203 | ||||
Deferred revenues | 3,902 | 81,778 | 12,653 | ||||
Due to related parties | 9,325 | 937 | 145 | ||||
Taxation payable | 15,913 | 16,876 | 2,611 | ||||
Deferred income tax | 1,420 | 1,932 | 299 | ||||
Convertible notes | 112,163 | 0 | 0 | ||||
Embeded derivatives liabilities | 20,114 | 0 | 0 | ||||
Assets retirement obligation | 10,838 | 14,472 | 2,240 | ||||
TOTAL CURRENT LIABILITIES | 785,647 | 777,927 | 120,361 | ||||
LONG-TERM LIABILITES | |||||||
Shareholders' loans | 6,510 | 6,375 | 987 | ||||
Warrants liabilities | 69,831 | 48,164 | 7,452 | ||||
Deferred income tax - non-current | 167,154 | 149,305 | 23,100 | ||||
TOTAL NON-CURRENT LIABILITIES | 243,495 | 203,844 | 31,539 | ||||
TOTAL LIABILITIES | 1,029,142 | 981,771 | 151,900 | ||||
SHAREHOLDERS' EQUITY | |||||||
XING equity | 694 | 694 | 108 | ||||
Additional paid-in capital | 2,482,717 | 2,493,145 | 385,727 | ||||
Capital reserve | 145,074 | 283,592 | 43,876 | ||||
Cumulative translation adjustments | (154,264) | (196,261) | (30,365) | ||||
Retained earnings | 730,498 | 712,542 | 110,241 | ||||
TOTAL XING EQUITY | 3,204,719 | 3,293,712 | 509,587 | ||||
NON-CONTROLLING INTEREST | 1,026,492 | 962,716 | 148,947 | ||||
TOTAL EQUITY | |||||||
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | 5,260,353 | 5,238,199 | 810,434 | ||||
About Qiao Xing Universal Resources, Inc.
Qiao Xing Universal Resources, Inc. is an emerging Chinese resources company headquartered in Huizhou, Guangdong Province, China. The Company was previously one of the leading players of telecommunication terminal products in China, but made the strategic decision to diversify into the resources industry in 2007. In April 2009, the Company acquired the 100% equity interest in China Luxuriance Jade Company, Ltd ("CLJC"). CLJC, through its wholly owned Chinese subsidiaries, owns the rights to receive the expected residual returns from Chifeng Haozhou Mining Co., Ltd. ("Haozhou Mining"), a large copper-molybdenum poly-metallic mining company in Inner Mongolia, China. Since then, the Company has further refined its strategy to become a pure resources company and is actively seeking additional acquisition targets in the resources industry.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plans," "potential," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend" and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed. You should not place undue reliance on these forward-looking statements.
Forward-looking statements include all statements other than statements of historical facts, such as statements regarding anticipated mining production volumes, unit net costs of mining production, mining sales volumes, ore grades, molybdenum and other commodity prices, mine development and capital expenditures, mine production and development plans, availability of power, water, labor and equipment, environmental reclamation and closure costs and plans, environmental liabilities and expenditures, litigation liabilities and expenses, dividend payments, estimates of proven and probable reserves and other mineralized material, political, economic and social conditions in the areas of the Company's operations and exploration efforts and results. Readers are cautioned that forward-looking statements are not guarantees of future performance and actual results may differ materially from those projected, anticipated or assumed in the forward-looking statements. Important factors that could cause the Company's actual results to differ materially from those anticipated in the forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. Qiao Xing Universal Resources, Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of December 1, 2011.
Company Contact: | USA IR Agency Contacts: Mr. John Harmon, Sr. Account Manager | |