SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2013 Third Quarter Financial Results

   SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2013 Third
                          Quarter Financial Results

PR Newswire

PINGDINGSHAN, China, May 14, 2013

PINGDINGSHAN, China, May 14, 2013 /PRNewswire-FirstCall/ -- SinoCoking Coal
and Coke Chemical Industries, Inc. (Nasdaq: SCOK) (the "Company" or
"SinoCoking"),  a vertically-integrated coal and coke processor, announced
today its financial results for the fiscal 2013 third quarter ended March 31,

Fiscal 2013 Third Quarter vs. Fiscal 2012 Third Quarter

  oTotal revenue was $13.9 million, as compared to $16.8 million.
  oGross margin was 15.0%, as compared to 15.7%.
  oNet income, including foreign currency transaction adjustment, was $1.2
    million or $0.02 per diluted share, as compared to net income of $2.1
    million or $0.07 per diluted share.

         Fiscal 2013 Third Quarter          Fiscal 2012 Third Quarter
Product  MT*    Weighted  Revenue   % of    MT*    Weighted  Revenue   % of
type     Sold   Average   (million) Total   Sold   Average   (million) Total
                Price/MT*           Revenue        Price/MT*           Revenue
Coke Products
Coke     38,220 $ 212     $ 8.1     57.6%   37,111 $ 230     $ 8.5     50.7%
Coal Tar 1,357  $ 258     $ 0.4     2.9%    1,563  $ 257     $ 0.2     1.1%
Coal Products
Raw Coal 11,281 $ 58      $ 0.7     4.7%    15,778 $ 88      $ 1.3     8.0%
Washed   27,295 $ 177     $ 4.8     34.7%   38,425 $ 176     $ 6.8     40.2%

 *metric ton

Discussing fiscal 2013 third quarter financial results, SinoCoking's Chairman
and CEO, Mr. Jianhua Lv, noted, "The ongoing mining moratorium continues to
limit raw coal supplies in Henan. In addition, operations at our four coal
mines remain idle, and we must continue to meet our coal requirements from
other provinces."

The 17.3% decrease in total revenue for the quarter was due to:

  oApproximately $2.0 million decrease in washed coal revenue resulting from
    lower sales volume despite a slightly increased average selling price;
  oApproximately $0.6 million decrease in raw coal revenue due to limited
    supply, as well as decreased average selling price; and,
  oApproximately $0.4 million decrease in coke revenue mainly due to lower
    average selling price despite the higher sales volume.

Of note, decreases in washed coal, raw coal and coke revenue were slightly
offset by an increase in coal tar revenue due to higher average selling price,
despite the decreased sales volume."

Recent business highlights:

Mr. Lv added, "Over the last several quarters, we have seen a slight but
steady improvement in coke demand, mainly from steel mills. Thus, since the
beginning of fiscal 2013, we have taken steps to position SinoCoking to take
advantage of market opportunities that may arise if demands for coal, coke and
coke by-products recover in fiscal 2014. Such steps include:

Upgrading technical capabilities of our existing coking facility

  oTo reduce our dependency on high cost raw materials, such as coking coal,
    we upgraded our existing coking facility, which has an annual production
    capacity of 250,000 metric tons. The facility can now produce high quality
    coke and coke by-products using low cost raw coal, such as long flame
    coal. We also upgraded oven capabilities to improve their energy
    efficiency, capture additional by-products for refinement into high
    value-added chemical products, and satisfy strict environmental

Resuming construction of the new coking facility

  oIn April we resumed construction of our new facility, which we plan to
    complete before fiscal 2014 year-end. Trial production will start
    immediately after construction. Additionally, we received approval from
    local authorities to increase the facility's designed annual production
    capacity from 900,000 metric tons to 1.2 million metric tons. Such
    increase, if implemented, would enable us to further expand our product
    offering by recapturing additional coke by-products for refinement into
    high value-added chemical products. This fits well with our business plan
    to focus on increasing our market share in China's coal chemical industry
    which has been growing rapidly.

Signing a leasing agreement to operate a 200,000 metric tons coking facility
for a period of one year

  oTrial production at our recently leased coke production facility began on
    April 24, 2013. This facility is approximately 3 miles from our existing
    coking facility and rail yard. We have started work to improve both the
    efficiency of the coke ovens and the quality of the coke produced at this
    facility, and will gradually increase production to full capacity. Coke
    by-products such as crude benzol, sulfur, sulfur ammonia and purified coal
    gas will be produced at the same time, thereby increasing our product
    portfolio. Through operating this facility, we aim to gain and hone the
    skills needed to operate and manage its new type of coke ovens, which will
    be a valuable experience once our state-of-the-art coking facility is
    completed and becomes operational.

Continuing to invest to improve safety of our coal mines

  oAs required by the Henan government, we are upgrading the safety-related
    systems at our coal mines in order to be approved to resume our mining
    operations. We are also in the process of merging the operations of
    Hongchang mine, Shunli mine and Shuangrui mine. To date, we have invested
    a total of approximately $27.9 million as follows:

 a.Mine upgrades totaling approximately $35.0 million, 70% or approximately
     $24.5 million to be paid by SinoCoking and the remainder by Henan Coal
     Seam Gas, our joint-venture partner. To date, we have paid approximately
     $17.0 million for these upgrades which are expected to be completed in
     calendar year 2013.
 b.Mine consolidation totaling approximately $32.0 million. To date, we have
     paid approximately $10.9 million toward such integration. We expect to
     complete such integration 4-6 months after we obtain clearance to resume
     our mining operations, which clearance we expect to receive in calendar
     year 2013"

Mr. Lv. concluded, "Due to the recent steps taken to increase production of
coke and coke by-products, we expect our top and bottom lines to substantially
improve in the final quarter of fiscal 2013 and in fiscal 2014. We currently
have coke production capacity of 450,000 metric tons annually, including the
200,000 metric tons we are leasing. Once construction of our new facility is
completed, our coking capacity will increase by approximately 1.2 million
metric tons annually."

Conference Call

Mr. Lv and Sam Wu, the Company's CFO, will host a conference call on Thursday,
May 16, 2013 at 10:00 am ET / 10:00 pm China time to discuss fiscal 2013 third
quarter financial results as well as recent corporate developments.

Interested parties may participate in the call by dialing: (201) 493-6744.
Please call in 10 minutes before the conference is scheduled to begin and ask
for the SinoCoking call. After opening remarks, there will be a question and
answer period. Questions may be asked during the live call, or alternatively,
you may e-mail questions in advance to

The conference call will also be broadcast live over the Internet. To listen
to the webcast, please go to or visit the Company's
website and then go to Presentations/Events page where
the conference call is posted. Please go to the website at least 15 minutes
early to register, and download and install any necessary audio software. If
you are unable to listen live, the conference call will be archived and can be
accessed for approximately 90 days. We suggest listeners use Microsoft
Internet Explorer as their web browser.

About SinoCoking

SinoCoking and Coke Chemical Industries, Inc., a Florida corporation, is a
vertically-integrated coal and coke processor that uses coal from both its own
mines and that of third-party mines to produce basic and value-added coal
products for steel manufacturers, power generators, and various industrial
users. SinoCoking has been producing metallurgical coke since 2002, and acts
as a key supplier to regional steel producers in central China. SinoCoking
also produces and supplies thermal coal to its customers in central China.
SinoCoking currently owns its assets and conducts its operations through its
subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and
Technology Development Co., Ltd., and its affiliated companies, Henan Province
Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng
Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity
Generating Co., Ltd., Zhonghong Energy Investment Company, Henan Hongyuan Coal
Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co.,
Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.

For further information about SinoCoking, please refer to our periodic reports
filed with the Securities and Exchange Commission.

Forward Looking Statement

This press release contains forward-looking statements, particularly as
related to, among other things, the business plans of the Company, statements
relating to goals, plans and projections regarding the Company's financial
position and business strategy. The words or phrases "plans", "would be,"
"will allow," "intends to," "may result," "are expected to," "will continue,"
"anticipates," "expects," "estimate," "project," "indicate," "could,"
"potentially," "should," "believe," "think", "considers" or similar
expressions are intended to identify "forward-looking statements." These
forward-looking statements fall within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are
subject to the safe harbor created by these sections. Actual results could
differ materially from those projected in the forward-looking statements as a
result of a number of risks and uncertainties. Such forward-looking statements
are based on current expectations, involve known and unknown risks, a reliance
on third parties for information, transactions or orders that may be
cancelled, and other factors that may cause our actual results, performance or
achievements, or developments in our industry, to differ materially from the
anticipated results, performance or achievements expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially from anticipated results include risks and uncertainties related to
the fluctuation of local, regional, and global economic conditions, the
performance of management and our employees, our ability to obtain financing,
competition, general economic conditions and other factors that are detailed
in our periodic reports and on documents we file from time to time with the
Securities and Exchange Commission. Statements made herein are as of the date
of this press release and should not be relied upon as of any subsequent date.
The Company cautions readers not to place undue reliance on such statements.
The Company does not undertake, and the Company specifically disclaims any
obligation, to update any forward-looking statements to reflect occurrences,
developments, unanticipated events or circumstances after the date of such
statement. Actual results may differ materially from the Company's
expectations and estimates. The Company provides no assurances that any
potential acquisitions will actually be consummated, or if consummated that
such acquisitions will be on terms and conditions anticipated on the date of
this press release, and the Company makes no assurances with regard to any
results of any such acquisitions.

SinoCoking                      Investor Relations Counsel:
Sam Wu, Chief Financial Officer The Equity Group Inc.
+ 86-375-2882-999               Lena Cati    / (212) 836-9611

See Accompanying Tables




                        For the Three Months Ended   For the Nine Months Ended
                        March 31,                   March 31
                        2013           2012          2013          2012
REVENUE               $ 13,903,951  $  16,804,057  $ 52,704,787  $ 56,252,724
COST OF REVENUE         11,815,066     14,166,799    45,770,689    43,122,271
GROSS PROFIT            2,088,885      2,637,258     6,934,098     13,130,453
 Selling                37,018         43,602        122,775       168,469
 General and            533,055        648,834       1,741,228     1,982,620
    Total operating     570,073        692,436       1,864,003     2,151,089
INCOME FROM             1,518,812      1,944,822     5,070,095     10,979,364
 Interest income        174,788        222,583       605,889       999,883
 Interest expense       (910,544)      (302,746)     (2,929,609)   (1,033,768)
 Other finance          (94,547)       (34,002)      (257,914)     (107,435)
 Other (expense)        219,838        (47)          228,171       (9,136)
 income, net
 Change in fair value   1,150          163,394       715,997       4,526,330
 of warrants
    Total other
    (expense) income,   (609,315)      49,182        (1,637,466)   4,375,874
INCOME BEFORE INCOME    909,497        1,994,004     3,432,629     15,355,238
PROVISION FOR INCOME    404,717        576,341       1,436,211     2,983,158
NET INCOME              504,780        1,417,663     1,996,418     12,372,080
 Foreign currency
 translation            662,084        714,277       653,710       2,543,636
COMPREHENSIVE INCOME  $ 1,166,864   $  2,131,940   $ 2,650,128   $ 14,915,716
 Basic and diluted      21,121,372     21,090,948    21,121,372    21,090,948
 Basic and diluted    $ 0.02        $  0.07        $ 0.09        $ 0.59




                                                     March 31,     June 30,
                                                     2013          2012
 Cash                                              $ 2,081,078   $ 2,366,718
 Restricted cash                                     16,064,000    9,668,000
 Accounts receivable, trade, net                     8,382,172     12,017,231
 Notes receivable, trade                             -             14,176,800
 Notes receivable, mine acquisition                  -             9,155,520
 Other receivables                                   4,398,235     1,412,008
 Loans receivable                                    17,596,037    9,849,937
 Refundable deposit                                  4,782,000     4,752,000
 Inventories                                         3,015,779     2,382,444
 Advances to suppliers                               9,677,328     12,267,806
 Prepaid expenses                                    2,702         633,313
   Total current assets                              65,999,331    78,681,777
PLANT AND EQUIPMENT, net                             15,372,456    16,211,984
CONSTRUCTION IN PROGRESS                             39,628,161    39,379,553
 Prepayments                                         61,134,100    36,071,853
 Intangible assets, net                              31,783,145    31,635,487
 Long-term investments                               2,843,569     2,825,730
 Other assets                                        111,580       110,880
   Total other assets                                95,872,394    70,643,950
        Total assets                               $ 216,872,342 $ 204,917,264
 Short term loan - bank                            $ 15,302,400  $ 5,702,400
 Current maturity of long term loan                  23,910,000    20,592,000
 Accounts payable, trade                             -             4,023
 Notes payable                                       9,564,000     4,752,000
 Other payables and accrued liabilities              1,241,572     802,028
 Other payables - related parties                    167,787       156,227
 Acquisition payable                                 4,622,600     4,593,600
 Customer deposits                                   126,018       138,457
 Taxes payable                                       1,089,367     1,522,062
   Total current liabilities                         56,023,744    38,262,797
 Long term loan                                      28,692,000    36,432,000
 Warrants liability                                  651           716,648
   Total long term liabilities                       28,692,651    37,148,648
        Total liabilities                            84,716,395    75,411,445
 Common stock, $0.001 par value, 100,000,000
 shares authorized, 21,121,372 shares issued and     21,121        21,121
 Additional paid-in capital                          3,592,053     3,592,053
 Statutory reserves                                  3,689,941     3,689,941
 Retained earnings                                   112,253,550   110,257,132
 Accumulated other comprehensive income              8,267,682     7,613,972
   Total SinoCoking Coal and Coke Chemicals          127,824,347   125,174,219
   Industries, Inc's equity
 NONCONTROLLING INTERESTS                            4,331,600     4,331,600
        Total equity                                 132,155,947   129,505,819
        Total liabilities and equity               $ 216,872,342 $ 204,917,264

SOURCE SinoCoking Coal and Coke Chemical Industries, Inc.

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