SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2014 First
Quarter Financial Results
PINGDINGSHAN, China, Nov. 14, 2013
PINGDINGSHAN, China, Nov. 14, 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 2014 first quarter ended
September 30, 2013.
Fiscal 2014 First Quarter vs. Fiscal 2013 First Quarter
oTotal revenue slightly decreased to $17.5 million, as compared to $17.6
oGross margin improved to 17.7%, as compared to 10.9%.
oIncome from operations increased by 98% to $2.5 million, as compared to
oNet income increased by 75.9% to $1.2 million or $0.05 per diluted share,
as compared to $0.7 million or $0.03 per diluted share.
SinoCoking's Chairman and CEO, Mr. Jianhua Lv, commented, "The slight decrease
in fiscal 2014 first quarter revenue was mainly due to decreased sales of coal
products, offset by increased sales of coke products. Due to the ongoing
mining moratorium, raw coal supply has been very limited and we continued to
meet our coal requirements largely by purchasing coal, including from other
provinces, at a higher cost driven by the supply shortage. We did not sell
any raw coal and used all purchased coal (mainly washed coal) to manufacture
coke and coke byproducts. While we currently anticipate the moratorium to end
sometime in the first half of calendar 2014, there cannot be any assurance as
to the exact timing. Demands for all other coal products were also soft,
resulting in lower revenue from coal products overall.
For the first quarter of fiscal 2014 as compared to same period of fiscal
oDue to slightly improved market conditions for coke, the Company sold more
coke and coke byproducts which generated approximately 73.1% of the total
revenue as compared to 54.6%.
oRevenue from the sale of coal products generated approximately 26.9% of
total revenue, as compared to 45.4%.
"Our cost of revenue for the current fiscal first quarter decreased by 8.1%,
mainly due to lower purchase price for washed coal used to manufacture coke
and byproducts," continued Mr. Lv. "Lower cost of revenue resulted in
substantially improved gross margin for the fiscal 2014 first quarter as
compared to the same quarter of fiscal 2013. Additionally our selling, general
and administrative expenses decreased by approximately 3.9% as compared to the
same period of last year, due to lower consulting fees for the period."
Recent business highlights:
Mr. Lv added, "Our business plan involves growing our business through the:
oExpansion of our current production capacity and product mix at the
Hongfeng plant. In early 2013, we 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.
oIncrease of market share for our clean coke product produced at the
Baofeng plant. We 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
oCompletion of our new coking plant once market conditions improve. We
anticipate that the new plant will enable us to capture more coke
by-products for refinement into useful industrial chemicals, and
production of more high value-added chemical products.
oAcquisition of other coal mines and building long term strategic relations
with other mining operators to source raw coal.
The following projects are expected to require capital resources:
oNew Coking Plant. We intend to use existing cash, cash flow from
operations, bank loans, collection of our loan receivables, along with
other finance arrangements such as extending our long term loan from
Bairui Trust, to complete the construction of our new coking plant. Due to
ongoing market conditions, however, we have once again slowed down
constriction, but plan to resume at full pace if and when market improves.
oCoal Mine Safety Improvement Projects. The total estimated cost for
government-mandated safety upgrades is approximately $31.5 million. We
will be responsible for approximately 70% of the total estimated cost,
approximately $22.0 million, under the structure of our joint-venture with
Henan Coal Seam Gas. We also intend to use our line of credit from
Pingdingshan Rural Cooperative Bank to complete these projects. These
projects have not commenced as of yet, although we currently expect to
complete them sometime in first half of calendar year 2014.
Mr. Lv noted, "Our business plan fits well with our near- and mid-term
strategy of increasing our market share in China's coal chemical industry
which has been growing rapidly."
Mr. Lv and Mr. Sam Wu, CFO, will host a conference call on Monday, November
18, 2013 at 10:00 am ET to discuss these results as well as recent corporate
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 firstname.lastname@example.org.
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=171932 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.
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
email@example.com firstname.lastname@example.org / (212) 836-9611
See Accompanying Tables
SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended September 30,
REVENUE $ 17,475,970 $ 17,562,194
COST OF REVENUE 14,378,669 15,652,938
GROSS PROFIT 3,097,301 1,909,256
Selling 40,874 43,581
General and administrative 603,581 626,828
Total operating expenses 644,455 670,409
INCOME FROM OPERATIONS 2,452,846 1,238,847
OTHER INCOME (EXPENSE)
Interest income 183,093 222,640
Interest expense (778,767) (1,021,604)
Other finance expense (62,543) (72,244)
Change in fair value of warrants 12 673,530
Total other expense, net (658,205) (197,678)
INCOME BEFORE INCOME TAXES 1,794,641 1,041,169
PROVISION FOR INCOME TAXES 633,757 381,256
NET INCOME 1,160,884 659,913
OTHER COMPREHENSIVE INCOME
Foreign currency translation 845,447 (288,695)
COMPREHENSIVE INCOME $ 2,006,331 $ 371,218
WEIGHTED AVERAGE NUMBER OF COMMON
Basic and diluted 21,121,372 21,121,372
EARNINGS PER SHARE
Basic and diluted $ 0.05 $ 0.03
SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, June 30,
Cash $ 289,045 $ 782,018
Restricted cash - 9,708,000
Accounts receivable, trade 9,278,327 9,474,197
Other receivables 5,609,859 4,334,370
Loans receivable 8,032,037 8,032,037
Inventories 2,281,139 3,018,909
Advances to suppliers 9,449,497 8,791,837
Prepaid expenses 270,655 -
Total current assets 35,210,559 44,141,368
PLANT AND EQUIPMENT, net 15,082,867 15,269,766
CONSTRUCTION IN PROGRESS 40,473,429 40,224,821
Refundable deposit 4,884,000 4,854,000
Prepayments 61,943,378 61,562,890
Intangible assets, net 32,425,631 32,244,071
Long-term investments 2,904,223 2,886,383
Other assets 113,960 113,260
Total other assets 102,271,192 101,660,604
Total assets $ 193,038,047 $ 201,296,559
LIABILITIES AND EQUITY
Current maturity of long term loan $ - $ 50,158,000
Accounts payable, trade 379,657 183,504
Notes payable - 9,708,000
Other payables and accrued liabilities 901,107 2,229,362
Other payables - related parties 379,182 140,465
Acquisition payable 4,721,200 4,692,200
Customer deposits 128,706 208,815
Taxes payable 1,211,101 1,133,450
Total current liabilities 7,720,953 68,453,796
LONG TERM LIABILITIES
Long term loan 50,468,000 -
Total long term liabilities 50,468,000 -
Total liabilities 58,188,953 68,453,796
COMMITMENTS AND CONTINGENCIES
Common stock, $0.001 par value, 100,000,000
21,121,372 shares issued and outstanding 21,121 21,121
Additional paid-in capital 3,592,053 3,592,053
Statutory reserves 3,689,941 3,689,941
Retained earnings 112,465,709 111,304,825
Accumulated other comprehensive income 10,748,670 9,903,223
Total SinoCoking Coal and Coke Chemicals 130,517,494 128,511,163
Industries, Inc's equity
NONCONTROLLING INTERESTS 4,331,600 4,331,600
Total equity 134,849,094 132,842,763
Total liabilities and equity $ 193,038,047 $ 201,296,559
SOURCE SinoCoking Coal and Coke Chemical Industries, Inc.
Press spacebar to pause and continue. Press esc to stop.