SinoCoking Coal and Coke Chemical Industries Inc a vertically integrated coal and coke processor announced its financial results for the 2012 first quarter ended September 30 2011.
First Quarter 2012 vs. First Quarter 2011
1. Revenue increased by 70.3% to USD 22,151,334 from USD 13,008,462 due to an increase in all product categories in terms of both sales volumes and selling prices except for the slight decrease in the raw coal sales volume.
2. Revenue from the sale of coal products increased by 191% to approximately USD 11,303,713 and comprised 51% of total revenues as compared to 30% of total revenues in last year’s first quarter.
3. Total tonnes of coal products sold increased by 59% to 84,085 tonnes.
4. Raw coal revenue rose 13% due to a 28% increase in average selling prices and despite the slight decrease in raw coal sales volume. We were unable to produce or purchase sufficient raw coal to sell as a result of the mining moratorium.
5. Washed coal revenue increased 579% due to a 23% increase of average selling prices and increased volume.
6. Coal tar revenue increased 69% due to a 6% increase in average selling prices and increased volume.
7. Revenue from the sale of coke products increased by 19% to approximately USD 10,847,621 and comprised 49% of total revenues for the quarter as compared to 70% a year ago.
8. Total metric tons sold increased by 12% to 45,060 metric tons.
9. Average selling prices for coke products increased by 6%.
10. Gross margin decreased to 32.5% as compared to 35.7%, due to higher average prices of raw coal purchased in the open market driven by supply shortages.
11. Income from operations increased 78.7% to USD 6,478,405 compared to USD 3,624,739.
12. Pre-tax income, including the change in fair value of warrants, decreased to USD 9,785,097 as compared to USD 16,430,766(1).
13. Net income, including the change in fair value of warrants, was USD 8,308,713 or USD 0.39 per diluted share as compared to USD 15,481,998 or USD 0.73 per diluted share
14. Excluding the change of fair value of warrants, net income increased by 106.4% to USD 5,288,991 or USD 0.25 per diluted share as compared to USD 2,562,323, or USD 0.12 per diluted share.
Mr Jianhua LV SinoCoking Chairman and CEO noted that “We started the first quarter of fiscal 2012 on a strong note with increases in revenue and operating income. In response to market demand, we continued to optimize our product mix and took advantage of higher selling prices for coal products. As a result, revenue generated from the sale of coal products increased to over 51% of total revenue as compared to only 30% one year earlier.
“Our business continues to be impacted by several factors such as
A). The mine consolidation process and mining moratorium in Henan
B). The acceleration of government-mandated closure of small-sized and less-efficient coking facilities
C). The central government’s efforts to provide economic stimulus to maintain momentum and growth in domestic consumption. We are working hard to minimize the effects of these factors and take advantage of opportunities that have been presented to us by executing our ambitious business plan which includes
1. The completion of the construction of the new coking facility by 2011 year-end, which at full capacity is projected to produce up to 900,000 metric tons of coke and coke products annually and generate over USD 100 million in revenue and over USD 20 million in net income annually. In addition, this new modern state-of-the-art facility will help us:
2. Expand our product portfolio, by recapturing more coking by-products for refinement into useful industrial chemicals and production of more high value-added chemical products
3. Achieve greater energy efficiency while also lessening any environmental impact
4. Generate power for our own use and/or sale
5. We also intend to produce purified coal gas at this plant to sell as a fuel source to local residents through the state-owned gas grid
The resumption of operations at full capacity for our Hongchang and Xingsheng mines; finalize the preparation work for the Shuangrui and Shunli coal mines to receive clearance to start production.
Discussing the new coking facility, Mr Lv went on to say “The construction of the facility continues and is scheduled to be completed by December 31, 2011, with production to begin shortly thereafter. Thus far, we have completed the construction of the shallow foundation, an underground workshop and the furnace and chimney rack, and we expect to complete the building of furnaces and start installing equipment and machinery by the end of November. Pictures of the construction of the facility are available on our website www.sinocokingchina.com.”
