Longwei Petroleum completes plant upgrades at Gujiao facility
Wednesday, Nov 21, 2012
TAIYUAN CITY, China, Nov. 20, 2012 /PRNewswire-FirstCall/ -- 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 it has completed scheduled maintenance and plant upgrades at its Gujiao facility.
Longwei recently completed plant upgrades at its Gujiao facility to include new coatings for its large storage tanks and scheduled maintenance and upgrades. The Gujiao facility has a storage capacity of 70,000 metric tons. Since commencing operations in November 2009, the Gujiao facility has grown to account for $233.8 million in petroleum sales for fiscal year 2012.
"We are continually working to improve our operations and customer relationships," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We have a very good safety record over our 17-year operating history, and we have maintained strong, long-standing working relationships with industry regulators and local government officials."
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. The management team and all of our employees labor diligently to service our customers and the community for the betterment of our surrounding region," stated Mr. Cai.
Longwei's operations have now expanded to include three facilities within Shanxi Province. The Huajie facility asset purchase closed on September 26, 2012 for a purchase price of approximately US $110.6 million paid from the Company's cash flow. Since the Huajie facility began operations in October 2012, the Company has added 16 new major customers for the facility. Longwei has also received the support of local government and business leaders who view the new facility as a stimulant for regional growth and as a key piece of infrastructure to support local employment and economic development.
Longwei has also added a section to its website to include a description of its operating licenses for the wholesale distribution and handling of petroleum products. The two licenses include the Wholesale Distribution of Finished Oil License and the Dangerous Chemical Distribution License. The Company is in good standing under both of these licenses, which now encompass all three facilities. Additional information can be found on the Company's website: http://www.longweipetroleum.com/operations/licenses.
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.
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 non-cash 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.
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.
Source: Longwei Petroleum Investment Holding Ltd.
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