SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2013 Year-End Financial Results

 SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2013 Year-End
                              Financial Results

PR Newswire

PINGDINGSHAN, China, Sept. 30, 2013

PINGDINGSHAN, China, Sept. 30, 2013 /PRNewswire-FirstCall/ -- SinoCoking Coal
and Coke Chemical Industries, Inc. (Nasdaq: SCOK) (the "Company" or
"SinoCoking"),  a vertically-integrated coal and coke processor, today
announced its financial results for the fiscal year ended June 30, 2013.

Fiscal Year 2013 vs. 2012

  oTotal revenue decreased to $66.7 million, as compared to $78.9 million.
  oGross margin decreased to 12.3%, as compared to 19.2%.
  oIncome from operations decreased to $5.1 million, as compared to $12.0
    million.
  oNet income was $1.1 million or $0.05 per diluted share, as compared to
    $12.5 million or $0.59 per diluted share.

Discussing fiscal 2013 financial results, SinoCoking's Chairman and CEO, Mr.
Jianhua Lv, noted, "The decrease in fiscal 2013 revenue was mainly due to
decreased sales of coke, coal tar, raw coal, mid-coal, and washed coal, offset
by increased sales of coal slurries as well as sales of coke powder and crude
benzol, two new products that we introduced in fiscal 2013. Coke powder and
crude benzol are byproducts of the coking process and have various industrial
applications. Of note, we have been producing crude benzol at our leased
Hongfeng plant since last April."

Mr. Lv continued, "In fiscal 2013, our revenue continued to suffer because of
a very limited raw coal supply due to the ongoing mining moratorium, and we
met our coal requirements largely by purchasing raw coal, including from other
provinces, at a higher cost driven by the supply shortage. As a result, our
overall production cost increased and gross margin decreased. We expect gross
margin to remain depressed until the mining moratorium is lifted and we are
able to resume operations at our coal mines. We currently anticipate the
moratorium to end sometime in the first half of calendar 2014, although there
cannot be any assurance as to the exact timing."

Recent business highlights:

Mr. Lv added, "In fiscal 2013 we took several steps to expand our current
production capacity and product mix. Specifically:

  oWe upgraded technical capabilities at our Baofeng plant to reduce
    dependency on high-cost raw materials such as coking coal. The plant can
    now produce high quality coke and 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 conform to environmental
    requirements.
  oWe signed a leasing agreement to operate the Hongfeng plant for a period
    of one year. We are currently producing coke and coke byproducts such as
    crude benzol (since April) and purified coal gas (trial stage with
    commercial production to commence shortly), while additional byproducts
    such as sulfur and sulfur ammonia will be produced as we gradually
    increase production to full capacity.

In April 2013, we resumed construction of our new coking plant. Due to
ongoing market conditions, however, we have once again slowed down
construction, but plan to resume at full pace if and when the market
improves."

Mr. Lv noted, "Additionally, to offset the weak demand for conventional coke,
we plan to increase production of our clean coke product produced at the
Baofeng plant and further expand our product offerings by recapturing
additional coke by-products for refinement into high value-added chemical
products. This strategy fits well with our business plan to focus on
increasing our market share in China's coal chemical industry which has been
growing rapidly."

Mr. Lv. concluded, "We believe that SinoCoking is well positioned to take
advantage of growth opportunities once the coke market recovers."

Conference Call

Mr. Lv and Mr. Sam Wu, CFO, will host a conference call on Tuesday, October 1,
2013 at 10:00 am ET to discuss these 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 lcati@equityny.com.

The conference call will also be broadcast live over the Internet. To listen
to the webcast, please go to
http://www.investorcalendar.com/IC/CEPage.asp?ID=171714 or visit the Company's
website www.scokchina.com 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.

Contact:
SinoCoking                      Investor Relations Counsel:
Sam Wu, Chief Financial Officer The Equity Group Inc.
+ 86-375-2882-999          Lena Cati
sinocoking@sina.com             lcati@equityny.com / (212) 836-9611
www.scokchina.com               www.theequitygroup.com



See Accompanying Tables



SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


                                           For the Years Ended
                                            June 30,
                                           2013          2012
REVENUE                                  $ 66,686,301  $ 78,912,770
COST OF REVENUE                            58,478,301    63,745,461
GROSS PROFIT                           8,208,000     15,167,309
OPERATING EXPENSES:
 Selling                                   163,827       210,568
 General and administrative                2,924,576     2,993,580
     Total operating expenses              3,088,403     3,204,148
INCOME FROM OPERATIONS                     5,119,597     11,963,161
OTHER INCOME (EXPENSE)
 Interest income                           783,938       1,413,937
 Interest expense                          (3,875,029)   (2,356,333)
 Other finance expense                     (265,088)     (225,005)
 Other income, net                         229,036       241,635
 Change in fair value of warrants          716,627       4,852,399
     Total other (expense) income, net     (2,410,516)   3,926,633
INCOME BEFORE INCOME TAXES                 2,709,081     15,889,794
PROVISION FOR INCOME TAXES                 1,661,388     3,395,237
NET INCOME                                 1,047,693     12,494,557
OTHER COMPREHENSIVE INCOME
 Foreign currency translation adjustment   2,289,251     2,502,100
COMPREHENSIVE INCOME                     $ 3,336,944   $ 14,996,657
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 Basic and diluted                         21,121,372    21,093,525
EARNINGS PER SHARE
 Basic and diluted                       $ 0.05        $ 0.59



SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                     AS OF JUNE 30,
                                                     2013          2012
ASSETS
CURRENT ASSETS
 Cash                                        $    782,018     $ 2,366,718
 Restricted cash                                  9,708,000     9,668,000
 Accounts receivable, trade                       9,474,197     12,017,231
 Notes receivable, trade                          -             14,176,800
 Notes receivable, mine acquisition               -             9,155,520
 Other receivables                                4,334,370     1,412,008
 Loans receivable                                 8,032,037     9,849,937
 Inventories                                      3,018,909     2,382,444
 Advances to suppliers                           8,791,837     12,267,806
 Refundable deposit                               -             4,752,000
 Prepaid expenses                                 -             633,313
 Total current assets                         44,141,368    78,681,777
PLANT AND EQUIPMENT, net                             15,269,766    16,211,984
CONSTRUCTION IN PROGRESS                             40,224,821    39,379,553
OTHER ASSETS
 Refundable deposit                               4,854,000     -
 Prepayments                                      61,562,890    36,071,853
 Intangible assets, net                           32,244,071    31,635,487
 Long-term investments                            2,886,383     2,825,730
 Other assets                                     113,260       110,880
 Total other assets                           101,660,604   70,643,950
 Total assets                        $    201,296,559 $ 204,917,264
LIABILITIES AND EQUITY
CURRENT LIABILITIES
 Short term loan - bank                      $    -           $ 5,702,400
 Current maturity of long term loan               50,158,000    20,592,000
 Accounts payable, trade                          183,504       4,023
 Notes payable                                    9,708,000     4,752,000
 Other payables and accrued liabilities           2,229,341     802,028
 Other payables - related parties                 140,465       156,227
 Acquisition payable                              4,692,200     4,593,600
 Customer deposits                                208,815       138,457
 Taxes payable                                    1,133,450     1,522,062
 Total current liabilities                    68,453,775    38,262,797
LONG TERM LIABILITIES
 Long term loan                                   -             36,432,000
 Warrants liability                               21            716,648
 Total long term liabilities                  21            37,148,648
 Total liabilities                        68,453,796    75,411,445
COMMITMENTS AND CONTINGENCIES
EQUITY
 Common stock, $0.001 par value, 100,000,000 shares
authorized,
 21,121,372 shares issued and                 21,121        21,121
outstanding
 Additional paid-in capital                       3,592,053     3,592,053
 Statutory reserves                               3,689,941     3,689,941
 Retained earnings                                111,304,825   110,257,132
 Accumulated other comprehensive income           9,903,223     7,613,972
 Total SinoCoking Coal and Coke Chemicals     128,511,163   125,174,219
Industries, Inc's equity
 NONCONTROLLING INTERESTS                         4,331,600     4,331,600
 Total equity                             132,842,763   129,505,819
 Total liabilities and equity        $    201,296,559 $ 204,917,264

SOURCE SinoCoking Coal and Coke Chemical Industries, Inc.

Website: http://www.scokchina.com
 
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