Longwei Petroleum Raises Full-Year Guidance with Increased Revenue
Contribution from its Huajie Facility
TAIYUAN CITY, China, Jan. 2, 2013
/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 it has raised its full-year guidance
for the fiscal year ending June 30,
2013 ("FY13").
Longwei now forecasts FY13 revenue to increase 30.7%
year-over-year to $667.3 million,
versus prior forecasts of $646.3
million. Longwei also projects net income, adjusted
for the warrant derivative liability, to grow approximately 23.0%
year-over-year to $80.1 million,
versus the prior forecast of $77.6
million. The growth is primarily driven by the
better-than-expected ramp-up of the new Huajie facility.
Longwei now expects revenue contribution from the Huajie facility
of $121.0 million in FY13, up 21.0%
from the prior forecast of $100.0
million. The guidance does not account for any
potential external financing for inventory, which could accelerate
growth.
"The Huajie facility has captured significant market share in
its region during its first three months of operations, leading to
better-than-expected throughput. This, combined with
continued organic growth of the Taiyuan and Gujiao facilities,
positions us well for strong growth in FY13," said Cai Yongjun,
Chairman and Chief Executive Officer of Longwei. "We expect
strong quarterly top-line and bottom-line results for the period
ended December 31, 2012."
With the addition of the Huajie facility, the Company's total
storage capacity has increased to 220,000 metric tons ("mt").
Longwei's storage capacity is reported in metric tons based on the
mass or weight of the product converted to volume storage based on
the density of the product stored in its tanks, which consists of
both above and below ground storage. The volume storage
capacity measurement is calculated in accordance with industry
standards. The tank inventory has been continuously audited
under U.S. GAAP procedures by a U.S.-based, PCAOB-registered public
accounting firm for the past six years.
The U.S. Department of Energy has developed an online calculator
under its U.S. Energy Information Administration website for the
conversion of metric tons to U.S. gallons:
http://www.eia.gov/kids/energy.cfm?page=about_energy_conversion_calculator-basics#mogascalc.
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 86,128mt, compared to 68,310mt 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.
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
110,587mt 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. The
Company closed on the Huajie asset purchase on September 26, 2012.
The Company's PRC wholly-owned operating subsidiary, Taiyuan
Longwei Economy & Trading Co., was one of 15 companies in
Taiyuan City and one of only 140 companies in Shanxi Province recognized on February 15, 2012 as a "Provincial Honorable and
Credible Enterprise" for 2010. The Company received the award
from the Shanxi Administration for Industry and Commerce based on
Longwei's reputation as a company that honors its contractual
obligations and maintains its credibility with customers. "We
have worked hard to build a good reputation for the Company over
our 17-year operating history. We believe our performance has
earned us the trust of our customers and our shareholders, and we
will vigorously defend our reputation," stated Mr. Cai.
"China's GDP growth next year will exceed 8%," predicted
Lu Zhongyuan, deputy director of the
Development Research Center under the State Council, or China's
Cabinet. "There is no doubt China's economy will grow by more
than 8% percent in 2013 and the government should focus more on
promoting sustainable growth and containing imported
inflation. The economy has bottomed out since June of the
year, buoyed by economic restructuring, innovation incentive and
the market's self-stabilizing forces," Lu said. He added,
"This momentum will continue to drive up growth in the year ahead."
China Daily (December 30, 2012).
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
Investor Relations:
Mike
Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, ext. 110
Email: mike@redchip.com
Web: http://www.redchip.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.