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China Energy Corp. Reports Financial Results for Fourth Quar

发布时间:2019-01-26 文章编辑:AG88

- Fourth quarter 2009 revenue up approximately 300% to $21.9 million; net

income $6.6 million

- Fiscal-year 2009 revenue up 110% to $41.7 million; net income $5.1

million

- Fiscal-year 2009 cash flow from operations of $13.2 million

- Mine expansion and improvement program completed in August 2009

contributed to Q4 2009 gains and will contribute to 2010 growth

HOHHOT CITY, Inner Mongolia, China, March 29 /PRNewswire-Asia/ -- China Energy Corporation (OTC Bulletin Board: CHGY), ("China Energy" or "the Company"), a leading Inner Mongolia producer and processor of raw coal for domestic heating, electrical generation, and coking purposes for steel production in the People's Republic of China, announced financial results for the fourth quarter and fiscal year 2009.

Fourth quarter revenues totaled $21.9 million, an increase of approximately 300% over revenues of $5.5 million in the same period in fiscal year 2008. The increase was due primarily to a $10 million expansion and improvement program at the LaiYeGou coal mine in Inner Mongolia, PRC. The program was completed in August 2009 and included the installation of more efficient "longwall" mining equipment, which increases the amount of recoverable coal from 40% previously to as much as 80% and significantly increases the utilization efficiency of the Company's coal reserves. China Energy produced approximately 295,000 metric tons of coal, compared to 136,000 metric tons in the third quarter of fiscal year 2009. Average pricing was $39 per ton during the fourth quarter of fiscal 2009. Today China Energy has the capacity to produce up to 800,000 metric tons annually, which is more than 2008 and 2009 combined. Net income for the fourth quarter of fiscal year 2009 was $6.6 million, or $0.15 per diluted share, compared to $4.2 million, or $0.09 per diluted share, in the fourth quarter of fiscal year 2008.

Fiscal Year 2009 Financial Results

For the year ended November 30, 2009, the Company reported revenue of $41.7 million, an increase of 110% over revenue of $19.9 million generated in 2008. For the fiscal year, sales from the Company's coal group increased 148% to $32 million, or 77% of total sales, compared to $12.9 million, or 65% of total sales in fiscal year 2008. As a component of this, 36% of total company sales came from coal trading, and 41% came from coal production during fiscal year 2009. Average sales price of coal during fiscal year 2009 was $37 per ton, compared to $33 per ton in fiscal year 2008.

Sales of the heat power group totaled $9.7 million, or $23% of total sales, in fiscal year 2009, compared to $7.0 million, or 35% of total sales in fiscal year 2008. The higher level of sales from the heat power group was attributed to an increase of over 50% in the coverage area of the Company's heat power operations, and a 31% increase in volume of electricity sold by its electric power operations.

"China Energy is well positioned to benefit from the growing demand and increasing price for coal used in heating, power generation and manufacturing, as a result of the rapid growth in the Chinese economy," stated WenXiang Ding, chief executive officer and president. "With our expanded production capacity at our LaiYeGou coal mine, coupled with our stable and growing thermoelectric heating and coal brokerage businesses, we expect to generate significant top and bottom line growth for 2010. We will consider acquisition opportunities to expand our production and distribution capabilities, and are well positioned to leverage our seasoned management team if industry consolidation commences in Inner Mongolia."

Cost of goods sold for fiscal year 2009 was approximately $29.4 million, compared to approximately $14.0 million for fiscal year 2008. Gross profit was $12.3 million and gross margins were 29.5% in 2009, compared to $5.9 million in gross profit and gross margins of 29.6% during 2008.

Operating expenses for fiscal year 2009 were approximately $5.5 million, or 13.2% of revenue, compared to $2.7 million, or 13.6% of revenue in 2008. Selling and marketing expenses in fiscal year 2009 were $2.2 million compared to $0.4 million in 2008, and general and administration expenses totaled $3.3 million and $2.3 million in the respective periods. The increase in selling and marketing expenses in fiscal year 2009 was attributable in large part to the inclusion of $1.4 million in transportation and storage expenses incurred in the Company's proprietary coal trading business. These expenses were first incurred in fiscal year 2009 because that was the first full year of the coal trading business.

Net income for fiscal year 2009 totaled approximately $5.1 million, or $0.11 per diluted, share, compared to approximately $4.0 million, or $0.09 per diluted share, in fiscal year 2008. Net income margins were 12.2% and 20.1% for fiscal years 2009 and 2008, respectively. Contributing to the decline in net margin was a reduction in government subsidies from $3.0 million in 2008 to $1.6 million in 2009. The amount recorded for the 2008 subsidy was artificially high due to the inclusion of a portion of the Company's 2007 subsidy in fiscal year 2008.

Balance Sheet and Cash Flow

Cash and cash equivalents and restricted cash totaled $5.2 million on November 30, 2009 compared to $0.6 million on November 30, 2008. The Company had total stockholders' equity of $33.2 million, with total assets of $86.6 million versus total liabilities of $53.4 million on November 30, 2009. For fiscal year 2009, the Company generated $13.2 million in cash from operations versus $4.4 million in fiscal year 2008.

About China Energy Corporation

China Energy Corporation produces and processes raw coal for domestic heating, electrical generation and coking purposes for steel production primarily in the People's Republic of China, and acts as a brokerage in facilitating coal trade transactions. The Company produces coal through its subsidiary Inner Mongolia Tehong Coal Group Co, Ltd. ("Coal Group") and supplies heating and electricity requirements throughout the XueJiaWan district through its subsidiary Inner Mongolia Zhunger Heat Power Co., Ltd. ("Heat Power"). Through Heat Power, China Energy operates a thermoelectric plant and 21 heat transfer stations located in XueJiaWan, Ordos City, and is the sole company in that area granted the right by the local government to provide heating supply to its end-users. For additional information on China Energy Corporation see http://www.ceccec.com .

Cautionary Statement Regarding Forward-Looking Information

This press release may contain certain "forward-looking statements" relating to the business of China Energy Corporation, and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the impact of the proceeds from the private placement on the Company's short term business and operations,; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to sustain growth; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov)

For more information, please contact:

Company:

Alex (Yuan) Gong, Chief Financial Officer

Tel: +86-10-5203-6900

Email: alexgong08@gmail.com

Investor Relations:

HC International, Inc.

Ted Haberfield, Executive VP

Tel: +1-760-755-2716

Email: thaberfield@hcinternational.net

CHINA ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

NOVEMBER 30, 2009 AND 2008

2009 2008

---- ----

ASSETS

Current assets:

Cash and cash equivalents $5,073,645 $456,802

Accounts receivables, net of allowance for

doubtful accounts of $120,853 and $102,401,

respectively 4,600,667 3,006,456

Other receivables 4,447,272 4,333,548

Advance to suppliers 5,511,630 2,750,536

Inventories 5,574,465 500,154

--------- -------

Total current assets 25,207,679 11,047,496

---------- ----------

Fixed assets:

Property, plant and equipment 50,546,862 38,566,119

Construction in progress 4,236,281 9,809,230

--------- ---------

54,783,143 48,375,349

Less: accumulated depreciation and

depletion (7,456,849) (4,778,216)

----------- -----------

Net fixed assets 47,326,294 43,597,133

---------- ----------

Other assets:

Investment property, net of accumulated

depreciation of $166,172 and $120,686,

respectively 1,936,278 1,978,873

Mining right, net of amortization of

$787,417 and $492,575, respectively 3,627,642 3,916,413

Long term investment - 255,776

Restricted cash 149,898 148,668

Other long term assets 450,021 -

Notes receivable 7,913,100 2,802,850

--------- ---------

Total other assets 14,076,939 9,102,580

---------- ---------

TOTAL ASSETS $86,610,912 $63,747,209

=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short term bank loans $12,012,012 $5,558,888

Accounts payable 11,489,568 9,389,617

Advance from customers 12,125,187 3,350,659

Accrued liabilities 325,539 326,611

Other payables 387,729 929,463

Shareholder loans 9,972,279 10,718,163

Current portion of deferred income 822,930 581,903

------- -------

Total current liabilities 47,135,244 30,855,304

---------- ----------

Non-current liabilities

Deferred income 6,224,033 4,790,048

--------- ---------

Total liabilities 53,359,277 35,645,352

---------- ----------

Stockholders' equity:

Common stock: authorized 200,000,000 shares

of $0.001 par value; 45,000,000 shares

issued and outstanding 45,000 45,000

Additional paid-in capital 8,655,805 8,655,805

Paid in capital - stock options 315,000 315,000

Retained earnings 12,542,081 8,545,786

Statutory reserves 8,078,765 6,968,841

Accumulated other comprehensive income 3,614,984 3,571,425

--------- ---------

Total stockholders' equity 33,251,635 28,101,857

---------- ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $86,610,912 $63,747,209

=========== ===========

CHINA ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED NOVEMBER 30, 2009 AND 2008

2009 2008

---- ----

Revenues $41,715,003 $19,884,097

Cost of revenues (29,357,944) (13,952,998)

------------ ------------

Gross profit 12,357,059 5,931,099

---------- ---------

Operating expenses:

Selling and marketing (2,207,042) (394,298)

General and administrative (3,256,729) (2,272,343)

----------- -----------

Total operating expenses (5,463,771) (2,666,641)

----------- -----------

Income from operations 6,893,288 3,264,458

Other income and expenses:

Finance expenses, net (793,670) (765,388)

Government subsidies 1,633,075 3,042,579

Non-operating income 510,565 319,925

Non-operating expenses (955,648) (399,093)

--------- ---------

Income before income

taxes 7,287,610 5,462,481

Provision for income taxes (2,181,391) (1,503,478)

----------- -----------

Net income $5,106,219 $3,959,003

========== ==========

Other comprehensive income:

Foreign currency translation

adjustment 43,559 1,883,321

------ ---------

Total comprehensive income $5,149,778 $5,842,324

========== ==========

Net income per common share

basic and diluted $0.11 $0.09

===== =====

Weighted average common shares

outstanding basic and diluted $45,000,000 $45,000,000

=========== ===========

CHINA ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED NOVEMBER 30, 2009 AND 2008

2009 2008

---- ----

Cash flows from operating activities:

Net income $5,106,219 $3,959,003

Adjustments to reconcile net income to

net cash provided by (used in) operating

activities:

Allowance for doubtful accounts 18,452 -

Depreciation and amortization 3,102,399 2,281,398

Options issued for services - 315,000

Interest accrued on shareholder loans 206,175 209,118

Loss on disposal of property, plant and

equipment 753,114 -

Gain from short term investments (36,813) -

Changes in operating assets and liabilities:

Decrease in certificate of deposit - 94,698

(Increase) decrease in accounts

receivables (1,612,663) 588,491

(Increase) in other receivables (113,724) (3,111,908)

(Increase) in advance to suppliers (484,264) (3,060,298)

(Increase) in inventories (5,074,311) (348,021)

Increase in deferred income 1,675,012 3,199,059

Increase in accounts payable 2,028,336 942,610

Increase (decrease) in advance

from customers 8,183,112 (229,577)

(Decrease) in accrued liabilities and other

payables (542,806) (436,173)

--------- ---------

Net cash provided by operating

activities 13,208,238 4,403,400

---------- ---------

Cash flows from investing activities:

Purchase of property, plant and

equipment (5,466,545) (4,552,335)

Increase in construction in progress (2,870,197) (1,029,104)

Proceeds from disposal of property, plant

and equipment 75,661 -

Payments made on mining right obligation - (152,614)

Proceeds from disposal of long

term investment - 3,633,408

Payments made on other long term assets (450,021) -

Increase in notes receivable (5,238,230) (2,126,434)

Payments received on notes receivable 131,839 4,334,717

------- ---------

Net cash (used in) provided by

investing activities (13,817,493) 107,638

------------ -------

Cash flows from financing activities:

Proceeds from short term bank loans 12,000,585 5,424,000

Principal payments made on

short term bank loans (5,561,247) (9,991,579)

Advance from shareholders 4,435,826 2,024,754

Repayment of shareholder loans (5,643,934) (1,141,895)

Repayment of long term obligation - (2,705,665)

--- -----------

Net cash provided by (used in)

financing activities 5,231,230 (6,390,384)

--------- -----------

Effect of exchange rate changes on cash (5,132) 846,386

------- -------

Net change in cash and cash equivalents 4,616,843 (1,032,960)

--------- -----------

Cash and cash equivalents, beginning of year 456,802 1,489,762

------- ---------

Cash and cash equivalents, end of year $5,073,645 $456,802

========== ========

Supplemental disclosure of cash flow

information

Cash paid for interest $809,111 $755,959

======== ========

Cash paid for income taxes $1,887,198 $2,373,379

========== ==========

Supplemental disclosure of non-cash

investing and financing cash flow

information

Property, plant and equipment purchased

with financing $ - $1,701,485

======= ==========

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