TAIYUAN CITY, China,
Dec. 20, 2012 /PRNewswire/ -- Longwei
Petroleum Investment Holding Ltd. (NYSE MKT: LPH) ("Longwei" or the
"Company"), an energy company engaged in the storage and
distribution of finished petroleum products in the People's Republic of China ("PRC"), today
announced that its October and November
2012 product revenue increased 35.0% and sales volume
increased 26.1% year-over-year.
For the two months ended November 30,
2012, Longwei reported its revenue from product sales
increased 35.0% to $107.5 million,
compared to $79.6 million for the two
months ended November 30, 2011.
Longwei's product sales volume increased 26.1% for this two-month
period year-over-year to 86,128 metric tons ("mt"), compared to
68,310.0mt for the two-month period ended November 30, 2011. The increase in revenues
was primarily attributable to the increase in the average sales
price of petroleum between the periods and the volume growth of the
new Huajie facility. During the month of November the Company
offered Huajie customers certain one-time incentives and discounts
as part of its opening strategy to capture market share in the
region. The Huajie facility represented approximately 18.9%
or 16,290mt of the total sales volume for the two-month period
ended November 30, 2012.
"Bringing the Huajie facility online has positioned us for
strong growth in fiscal 2013," said Cai Yongjun, Chairman and Chief
Executive Officer of Longwei. "We expect to build our market
at Huajie as customers recognize our good customer
service and reliable distribution, as we have at our Taiyuan and
Gujiao facilities."
Fuel prices in the PRC increased in both August and September 2012 following three consecutive retail
price cuts between May and June 2012
due to the fluctuation in the international price of crude oil.
Fuel prices were cut for the fourth time this year on
November 16, 2012 by approximately
3.5% to better reflect international crude oil prices. Oil
prices during the reset period were depressed primarily due to the
uncertainty in the global economy from concerns in the Eurozone and
the U.S. 'fiscal cliff' prospects. In total, the PRC has
raised fuel prices four times and cut prices four times this
year. The average price per mt for the two months ended
November 30, 2012 increased
approximately 7.0% to $1,248 per mt
from $1,166 per mt for the two months
ended November 30, 2011.
"China will continue to make the
growth of domestic demand a top priority to keep growth momentum on
track in 2013," said Zhang Ping,
Minister of the National Development and Reform
Commission. ChinaDaily (December
19, 2012).
The chief economist for the PRC at Nomura Securities in
Hong Kong, Zhang Zhiwei said "Infrastructure investment is
likely to pick up further in 2013, driven by accelerated
urbanization." China's
economic growth will recover strongly in the first quarter of 2013,
to 8.2 percent in the first half of 2013, according to Nomura's
forecast. ChinaDaily (December 19,
2012).
Longwei expects year-over-year revenue growth of approximately
26.6% to $646.3 million, and net
income growth of approximately 24.2% to $77.6 million, adjusted for the warrant
derivative liability, for the fiscal year ending June 30, 2013. This growth rate does not account
for any external financing for inventory, which could accelerate
growth. The growth is driven primarily by the ramp-up of the Huajie
facility and organic growth at the Company's two existing
facilities.
Longwei recently reported revenues of US $133.4 million and non-GAAP net income of
$18.3 million or $0.18 per share, adjusted for the non-cash
warrant derivative liability charge, for the first fiscal quarter
ended September 30, 2012. The
Company's product sales volume increased 17.8% year-over-year to
110,587 metric tons during the quarter. As of September 30, 2012, the Company reported total
assets of US $360.0 million and book
value per share of $3.47.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy
company engaged in the storage and distribution of finished
petroleum products in the People's
Republic of China. The Company's oil and gas operations
consist of transporting, storing and selling finished petroleum
products, entirely in the PRC. The Company's headquarters are
located in Taiyuan City, Shanxi
Province. The Company has a storage capacity for its
products of 220,000 metric tons located at three storage facilities
within Shanxi: Taiyuan, Gujiao and
Huajie, which have an individual storage capacity of approximately
50,000 metric tons ("mt"), 70,000mt, and 100,000mt,
respectively. The Company has the necessary licenses to
operate and sell petroleum 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 with timely delivery to transportation
companies, coal mining operations, power supply customers,
large-scale gas stations and small, independent gas stations. The
Company also earns revenue from agency fees by acting as a
purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel
and gasoline at two retail gas stations, each located at the
Company's Taiyuan and Gujiao facilities. The Company seeks to
continue to expand its customer base and distribution platform
through the utilization of its large storage capacity, which allows
the Company the flexibility to take advantage of pricing, supply
and demand fluctuations in the marketplace.
Longwei was recently named to the Forbes list of
"Asia's 200 Best Under a Billion"
from a universe of 15,000 companies. Forbes ranked the
companies based on sales growth, earnings growth and return on
equity in the past 12 months and over three years. As was
reported, Longwei's three-year track record is 45% sales growth,
28% earnings per share growth and 28% return on equity. The
Forbes article can be found at:
http://www.forbes.com/sites/christinasettimi/2012/07/25/asias-200-best-under-a-billion.
For further information on Longwei, please visit
http://www.longweipetroleum.com. You may register to receive the
Company's future press releases on the website under 'Email
Alert.'
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.
Contact:
At the Company:
Michael Toups, Chief Financial
Officer
Tel: U.S. Office +1-727-641-1357
Email: mtoups@longweipetroleum.com
Web: http://www.longweipetroleum.com
Tina Xiao
Weitian Group LLC
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
Web: http://www.weitian-ir.com
SOURCE Longwei Petroleum Investment Holding Ltd.