PINGDINGSHAN, China, October 1, 2013 /PRNewswire-FirstCall/ -- SinoCoking Coal and Coke Chemical Industries, Inc. (Nasdaq: SCOK) (the "Company" or "SinoCoking"), a vertically-integrated coal and coke processor, today announced its financial results for the fiscal year ended June 30, 2013.
Fiscal Year 2013 vs. 2012
Discussing fiscal 2013 financial results, SinoCoking's Chairman and CEO, Mr. Jianhua Lv, noted, "The decrease in fiscal 2013 revenue was mainly due to decreased sales of coke, coal tar, raw coal, mid-coal, and washed coal, offset by increased sales of coal slurries as well as sales of coke powder and crude benzol, two new products that we introduced in fiscal 2013. Coke powder and crude benzol are byproducts of the coking process and have various industrial applications. Of note, we have been producing crude benzol at our leased Hongfeng plant since last April."
Mr. Lv continued, "In fiscal 2013, our revenue continued to suffer because of a very limited raw coal supply due to the ongoing mining moratorium, and we met our coal requirements largely by purchasing raw coal, including from other provinces, at a higher cost driven by the supply shortage. As a result, our overall production cost increased and gross margin decreased. We expect gross margin to remain depressed until the mining moratorium is lifted and we are able to resume operations at our coal mines. We currently anticipate the moratorium to end sometime in the first half of calendar 2014, although there cannot be any assurance as to the exact timing."
Recent business highlights:
Mr. Lv added, "In fiscal 2013 we took several steps to expand our current production capacity and product mix. Specifically:
In April 2013, we resumed construction of our new coking plant. Due to ongoing market conditions, however, we have once again slowed down construction, but plan to resume at full pace if and when the market improves."
Mr. Lv noted, "Additionally, to offset the weak demand for conventional coke, we plan to increase production of our clean coke product produced at the Baofeng plant and further expand our product offerings by recapturing additional coke by-products for refinement into high value-added chemical products. This strategy fits well with our business plan to focus on increasing our market share in China's coal chemical industry which has been growing rapidly."
Mr. Lv. concluded, "We believe that SinoCoking is well positioned to take advantage of growth opportunities once the coke market recovers."
Conference Call
Mr. Lv and Mr. Sam Wu, CFO, will host a conference call on Tuesday, October 1, 2013 at 10:00 am ET to discuss these results as well as recent corporate developments.
Interested parties may participate in the call by dialing: (201) 493-6744. Please call in 10 minutes before the conference is scheduled to begin and ask for the SinoCoking call. After opening remarks, there will be a question and answer period. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to lcati@equityny.com.
The conference call will also be broadcast live over the Internet. To listen to the webcast, please go to http://www.investorcalendar.com/IC/CEPage.asp?ID=171714 or visit the Company's website www.scokchina.com and then go to Presentations/Events page where the conference call is posted. Please go to the website at least 15 minutes early to register, and download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days. We suggest listeners use Microsoft Internet Explorer as their web browser.
About SinoCoking
SinoCoking and Coke Chemical Industries, Inc., a Florida corporation, is a vertically-integrated coal and coke processor that uses coal from both its own mines and that of third-party mines to produce basic and value-added coal products for steel manufacturers, power generators, and various industrial users. SinoCoking has been producing metallurgical coke since 2002, and acts as a key supplier to regional steel producers in central China. SinoCoking also produces and supplies thermal coal to its customers in central China. SinoCoking currently owns its assets and conducts its operations through its subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., and its affiliated companies, Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity Generating Co., Ltd., Zhonghong Energy Investment Company, Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co., Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.
For further information about SinoCoking, please refer to our periodic reports filed with the Securities and Exchange Commission.
Forward Looking Statement
This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company's financial position and business strategy. The words or phrases "plans", "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "think", "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of local, regional, and global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place undue reliance on such statements. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Actual results may differ materially from the Company's expectations and estimates. The Company provides no assurances that any potential acquisitions will actually be consummated, or if consummated that such acquisitions will be on terms and conditions anticipated on the date of this press release, and the Company makes no assurances with regard to any results of any such acquisitions.
Contact: | |
SinoCoking | Investor Relations Counsel: |
Sam Wu, Chief Financial Officer | The Equity Group Inc. |
+ 86-375-2882-999 | Lena Cati |
lcati@equityny.com / (212) 836-9611 | |
See Accompanying Tables
SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| ||||||
For the Years Ended | ||||||
2013 | 2012 | |||||
REVENUE | $ | 66,686,301 | $ | 78,912,770 | ||
COST OF REVENUE | 58,478,301 | 63,745,461 | ||||
GROSS PROFIT | 8,208,000 | 15,167,309 | ||||
OPERATING EXPENSES: | ||||||
Selling | 163,827 | 210,568 | ||||
General and administrative | 2,924,576 | 2,993,580 | ||||
Total operating expenses | 3,088,403 | 3,204,148 | ||||
INCOME FROM OPERATIONS | 5,119,597 | 11,963,161 | ||||
OTHER INCOME (EXPENSE) | ||||||
Interest income | 783,938 | 1,413,937 | ||||
Interest expense | (3,875,029) | (2,356,333) | ||||
Other finance expense | (265,088) | (225,005) | ||||
Other income, net | 229,036 | 241,635 | ||||
Change in fair value of warrants | 716,627 | 4,852,399 | ||||
Total other (expense) income, net | (2,410,516) | 3,926,633 | ||||
INCOME BEFORE INCOME TAXES | 2,709,081 | 15,889,794 | ||||
PROVISION FOR INCOME TAXES | 1,661,388 | 3,395,237 | ||||
NET INCOME | 1,047,693 | 12,494,557 | ||||
OTHER COMPREHENSIVE INCOME | ||||||
Foreign currency translation adjustment | 2,289,251 | 2,502,100 | ||||
COMPREHENSIVE INCOME | $ | 3,336,944 | $ | 14,996,657 | ||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||
Basic and diluted | 21,121,372 | 21,093,525 | ||||
EARNINGS PER SHARE | ||||||
Basic and diluted | $ | 0.05 | $ | 0.59 | ||
| ||||
AS OF JUNE 30, | ||||
2013 | 2012 | |||
ASSETS | ||||
CURRENT ASSETS | ||||
Cash | $ | 782,018 | $ | 2,366,718 |
Restricted cash | 9,708,000 | 9,668,000 | ||
Accounts receivable, trade | 9,474,197 | 12,017,231 | ||
Notes receivable, trade | - | 14,176,800 | ||
Notes receivable, mine acquisition | - | 9,155,520 | ||
Other receivables | 4,334,370 | 1,412,008 | ||
Loans receivable | 8,032,037 | 9,849,937 | ||
Inventories | 3,018,909 | 2,382,444 | ||
Advances to suppliers | 8,791,837 | 12,267,806 | ||
Refundable deposit | - | 4,752,000 | ||
Prepaid expenses | - | 633,313 | ||
Total current assets | 44,141,368 | 78,681,777 | ||
PLANT AND EQUIPMENT, net | 15,269,766 | 16,211,984 | ||
CONSTRUCTION IN PROGRESS | 40,224,821 | 39,379,553 | ||
OTHER ASSETS | ||||
Refundable deposit | 4,854,000 | - | ||
Prepayments | 61,562,890 | 36,071,853 | ||
Intangible assets, net | 32,244,071 | 31,635,487 | ||
Long-term investments | 2,886,383 | 2,825,730 | ||
Other assets | 113,260 | 110,880 | ||
Total other assets | 101,660,604 | 70,643,950 | ||
Total assets | $ | 201,296,559 | $ | 204,917,264 |
LIABILITIES AND EQUITY | ||||
CURRENT LIABILITIES | ||||
Short term loan - bank | $ | - | $ | 5,702,400 |
Current maturity of long term loan | 50,158,000 | 20,592,000 | ||
Accounts payable, trade | 183,504 | 4,023 | ||
Notes payable | 9,708,000 | 4,752,000 | ||
Other payables and accrued liabilities | 2,229,341 | 802,028 | ||
Other payables - related parties | 140,465 | 156,227 | ||
Acquisition payable | 4,692,200 | 4,593,600 | ||
Customer deposits | 208,815 | 138,457 | ||
Taxes payable | 1,133,450 | 1,522,062 | ||
Total current liabilities | 68,453,775 | 38,262,797 | ||
LONG TERM LIABILITIES | ||||
Long term loan | - | 36,432,000 | ||
Warrants liability | 21 | 716,648 | ||
Total long term liabilities | 21 | 37,148,648 | ||
Total liabilities | 68,453,796 | 75,411,445 | ||
COMMITMENTS AND CONTINGENCIES | ||||
EQUITY | ||||
Common stock, $0.001 par value, 100,000,000 shares authorized, | ||||
21,121,372 shares issued and outstanding | 21,121 | 21,121 | ||
Additional paid-in capital | 3,592,053 | 3,592,053 | ||
Statutory reserves | 3,689,941 | 3,689,941 | ||
Retained earnings | 111,304,825 | 110,257,132 | ||
Accumulated other comprehensive income | 9,903,223 | 7,613,972 | ||
Total SinoCoking Coal and Coke Chemicals Industries, Inc's equity | 128,511,163 | 125,174,219 | ||
NONCONTROLLING INTERESTS | 4,331,600 | 4,331,600 | ||
Total equity | 132,842,763 | 129,505,819 | ||
Total liabilities and equity | $ | 201,296,559 | $ | 204,917,264 |
