Yalian Steel Corporation announced its financial and operating results for the year ended September 30 2011. The Company or Yalian refers to Yalian Steel Corporation and its subsidiary, Yangzhou Yalian Steel Pipe Co Ltd which operates primarily within the People Republic of China.
For the three months ended September 30 2011, Yalian reported revenues of USD 2,709,000; cost of sales of USD 2,722,000, operating expenses of USD 779,000 and other expenses of USD 857,000. Net loss for the three months ended September 30, 2011 was USD 1,649,000 or USD 0.02 per share.
For the year ended September 30 2011, Yalian reported revenues of USD 26,339,000, cost of sales of USD 24,808,000, operating expenses of USD 2,930,000 and other expenses of USD 1,497,000. Net loss for the year ended September 30 2011 was USD 2,897,000 or USD 0.03 per share.
As at September 30 2011, cash and cash equivalents were USD 899,000, restricted cash was USD 6,507,000 and the Company working capital deficiency was USD 10,035,000. Total assets were USD 92,137,000, short term and long-term loans, net of financing costs, were USD 38,016,000 and total shareholders' equity was USD 44,077,000.
As at September 30 2011, the Company has short-term loans and current portion of long-term loans due to mature within the next twelve months in the amount of USD 28,248,000. The Company is currently making arrangements with banks to renew loans or obtain new short term loans to repay these obligations. Management is confident of securing additional loans or other financings which are required in order to fund its working capital and refinancing needs, both in the short and long term. However, there can be no assurance that adequate loans or other financings can be secured.
Operational and Business Highlights
During the year ended September 30, 2011, the Company manufactured and delivered a significantly higher number of sales orders. In terms of volume, total sales orders manufactured and delivered amounted to 35,372 metric tonnes for the year ended September 30 2011, as compared to 892 tonnes for the year ended September 30 2010.
The Company continues to engage with senior officers from a number of major state owned oil & gas companies within the PRC to develop and be accepted into key purchasing networks. During the current year, the Company successfully completed the certification process and thus was added to the Pre-Approved Suppliers List of CNPC, a major Chinese oil company. This enables the Company to bid for projects conducted by CNPC and its related companies.
The Company started the construction of its new anti-corrosion line in September 2010. Installation of the exterior coating line has been completed and was put into production in December 2011. The interior coating line is being installed and final completion date is expected to be early 2012. Once fully completed, this new coating line is expected to be an essential part of the Company business development plans and integration within its industrial chain. The anti-corrosion function of the pipe plays an important role in extending the longevity of the product, saves energy and also decreases environmental safety accidents that could be caused by leakage of fluids carried by the line pipe.
