Hanwei Energy Services Reports Third Quarter Fiscal 2013 Financial and
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/06/13 -- Hanwei
Energy Services Corp. (TSX:HE) -
-- Revenue increases 87% to $8.6 million for the three-month period
-- EBITDA increases 580% to $2.7 million for the nine-month period
-- Confirmed pipe orders to be completed approximately $9.8 million
Hanwei Energy Services Corp. ("Hanwei" or the "Company") today
reported its financial results for the quarter ended December 31,
2012 (the "Reporting Period"). All amounts are in Canadian Dollars
unless otherwise noted.
For the three months ended December 31, 2012:
-- Revenues were $8.6 million, representing an increase of $4.0 million (or
an 87% improvement) as compared to $4.6 million for the same period of
the prior year.
-- Gross profit was $3.0 million, representing an increase of $1.4 million
(or an 88% improvement) as compared to $1.6 million for the same period
of 2011. Gross margin as a percentage of sales was 35.4% as compared to
35.1% for the same period of the prior year. The Company aims to
maintain a minimum gross profit margin of not less than 30% on an
-- EBITDA from continuing operations was $0.7 million, representing an
increase of $0.6 million (or a 633% improvement) as compared to $0.1
million for the same period of the prior year.
-- Earnings per share was $0.00 as compared to a loss per share of $0.01
for the same period of the prior year.
For the nine months ended December 31, 2012:
-- Revenues were $21.8 million, representing an increase of $0.9 million
(or a 4% improvement) as compared to $20.9 million for the same period
of the prior year.
-- Gross profit was $7.7 million representing an increase of $1.2 million
(or an 18% improvement) as compared to $6.5 million for the same period
of the prior year. Gross margin as a percentage of sales was 35.6% as
compared to 31.2% for the same period of the prior year.
-- EBITDA from continuing operations was $2.7 million, representing a $2.3
million increase (or a 580% improvement) as compared to EBITDA from
continuing operations of $0.4 million for the same period of the prior
-- Earnings per share was $0.01 as compared to a loss per share of $0.05
for the same period of the prior year, or an improvement of $0.06 per
Bank debt as of December 31, 2012 was $16.8 million versus $24.5
million as of December 31, 2011 and $21.2 million as of September 30,
The aforementioned financial highlights indicate significant
improvements across the Company's key operating metrics. The Company
remains focused on increasing sales, stringent management of costs,
and continued commitment to manufacturing processes and quality
assurance, to drive profitability. Operational highlights in this
regard are as follows:
-- The Company continues to actively pursue sales across various
-- Of the $21.8 million of revenues recognized for the nine months
ended December 31, 2012 approximately $10.5 million was to the
Company's Chinese market and $11.3 million to international markets
respectively representing 48% and 52% of total sales.
-- This geographic mix of revenue with increases in international
orders has offset any current reductions in China sales. The
Company's aforementioned $10.5 million in China sales represents a
$7.4 million reduction in this market from the same period of the
prior year as an outcome of a decrease in demand from major Chinese
customers and increased competition from other Chinese GRE pipe and
alternative product suppliers. However, the aforementioned
international sales of $11.3 million have provided a comparatively
greater increase of $8.3 million from international sales of $3.0
million in the same period of the prior year.
-- The Company's international sales include completed orders to
clients in Kazakhstan of approximately $10 million, representing an
increase in this particular market of $6.5 million or 185% for the
nine months ended December 31, 2012 (as compared to revenues from
this market of $3.5 million for the same period of the prior year).
The increase in Kazakhstan was due to successful project references
on previous pipe installations providing continued confidence to
both new and existing clients in this market.
-- In addition to the $21.8 million of revenues noted above, the
Company has confirmed pipe orders of approximately $9.8 million as
of the date of this press release.
-- The Company continues to stringently manage its costs and expenses.
-- While revenue for the nine months ended December 31, 2012 grew to
$21.8 million from $20.9 million for the same period of the prior
year, the Company's cost of revenues reduced to $14.02 million from
$14.4 million for the comparative period.
-- General and administrative expenses for the nine months ended
December 31, 2012 were $3.6 million as compared to $4.4 million for
the same period of 2011. The $0.8 million reduction was primarily
driven by reductions in employee costs, professional service fees
and office rent.
-- The Company continues to manage its debt facilities. Subsequent to the
quarter end, the Company has repaid a short term loan of Renminbi
("Rmb")8 million ($1.3 million) due to mature on February 27, 2013 and
obtained a new Rmb9.3 million ($1.5 million) loan that matures on May
14, 2013 and bears interest of 5.6% per annum. In addition the Company
has also renewed a short-term loan of Rmb30 million ($4.8 million) due
to mature on March 18, 2013 and the loan matures on January 21, 2014 and
bears interest of 8.4% per annum.
Graham Kwan, Executive Vice President and Rick Huang, Chief Financial
Officer of Hanwei will host a conference call to discuss its
operational and financial results for the quarter ended December 31,
2012. Management invites analysts and investors to participate on the
Date: Thursday, February 7, 2013
Time: 1:00 p.m., Eastern Time
Dial in number: 1-888-364-3109 or 1-719-325-2469
A replay of the conference call will be available on the Company's
About Hanwei Energy Services Corp.
Hanwei Energy Services Corp. is a leading manufacturer of high and
low pressure, fiberglass reinforced plastic pipe products and
associated technologies and services for the international oil and
gas, and infrastructure industries. Hanwei serves major energy
customers in the Chinese and global energy markets.
The forward-looking information in this press release presents the
Company's expectations as of the date of this press release and
accordingly is subject to change after such date. Readers are
cautioned that reference to "orders" hereto are not recognized under
IFRS and should not be construed to be indicators of performance or
purported to be an alternative to sales or any other financial
measures under IFRS. Readers should not place undue importance on
forward-looking information and should not rely upon this information
as of any other date. While the Company may elect to, the Company
does not undertake to update this information at any particular time,
except as required by applicable securities legislation.
Neither the TSX nor its Regulation Services Provider (as that term is
defined in the policies of the TSX) accepts responsibility for the
adequacy or accuracy of this release.
Hanwei Energy Services Corp.
Executive VP, Strategic Development and Corporate Affairs
Hanwei Energy Services Corp.
Yucai (Rick) Huang
Chief Financial Officer
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