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China Natural Resources Releases Interim Results Of Operations

December 21, 2012

HONG KONG, Dec. 21, 2012 /PRNewswire/ — CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released unaudited interim financial information for the three and six months ended June 30, 2012 as follows:

                                                                CHINA NATURAL RESOURCES, INC. AND SUBSIDIARIES
                                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
                                                               THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011
                                                            (Amounts in thousands, except share and per share data)

                                                                                     Three Months Ended June 30,                 Six Months Ended June 30,
                                                                                     ---------------------------                 -------------------------
                                                                                       2011                 2012                2012                 2011     2012    2012
                                                                                       ----                                                          ----     ----    ----
                                                                                        CNY                  CNY                 US$                  CNY      CNY     US$

    REVENUE                                                                          59,977               37,841               5,950               68,070   66,903  10,519
    COST OF SALES                                                                   (38,786)             (22,344)             (3,513)             (43,853) (38,687) (6,083)
                                                                                    -------              -------              ------              -------  -------  ------
    GROSS PROFIT                                                                     21,191               15,497               2,437               24,217   28,216   4,436

    SELLING AND DISTRIBUTION EXPENSES                                                  (849)                (840)               (132)              (1,614)  (1,525)   (240)
    ADMINISTRATIVE EXPENSES                                                         (17,383)             (21,203)             (3,334)             (33,837) (39,166) (6,159)
    OTHER OPERATING EXPENSES                                                              -               (3,591)               (565)                   -   (4,704)   (739)
    OPERATING PROFIT (LOSS)                                                           2,959              (10,137)             (1,594)             (11,234) (17,179) (2,702)
    FINANCE COST                                                                     (6,561)             (11,368)             (1,787)             (11,831) (20,818) (3,273)
    INTEREST INCOME                                                                     246                  905                 142                  372    1,695     267
    NON-OPERATING INCOME (EXPENSE), NET                                                  19                 (858)               (134)                 (54)    (889)   (140)
                                                                                        ---                 ----                ----                  ---     ----    ----
    LOSS BEFORE INCOME TAX                                                           (3,337)             (21,458)             (3,373)             (22,747) (37,191) (5,848)
    INCOME TAX EXPENSE                                                               (4,446)              (7,078)             (1,113)              (5,825)  (8,361) (1,315)
                                                                                     ------               ------              ------               ------   ------  ------
    LOSS FOR THE PERIOD                                                              (7,783)             (28,536)             (4,486)             (28,572) (45,552) (7,163)
                                                                                     ======              =======              ======              =======  =======  ======

    ATTRIBUTABLE TO:
    Owners of the Company                                                            (7,565)             (28,547)             (4,488)             (28,241) (47,707) (7,502)
    Non-controlling interests                                                          (218)                  11                   2                 (331)   2,155     339
                                                                                       ----                  ---                 ---                 ----    -----     ---
                                                                                     (7,783)             (28,536)             (4,486)             (28,572) (45,552) (7,163)
                                                                                     ======              =======              ======              =======  =======  ======

    LOSS PER SHARE ATTRIBUTABLE TO
    ORDINARY EQUITY HOLDERS OF THE
    COMPANY
    Basic                                                                             (0.33)               (1.15)              (0.18)               (1.24)   (1.92)  (0.30)
                                                                                      =====                =====               =====                =====    =====   =====

    Diluted                                                                           (0.33)               (1.15)              (0.18)               (1.24)   (1.92)  (0.30)
                                                                                      =====                =====               =====                =====    =====   =====

    LOSS FOR THE PERIOD                                                              (7,783)             (28,536)             (4,486)             (28,572) (45,552) (7,163)

    Other comprehensive income (loss):
    Foreign currency translation adjustments                                          5,394               (2,794)               (439)               8,279   (2,579)   (406)
    TOTAL COMPREHENSIVE LOSS FOR THE                                                 (2,389)             (31,330)             (4,925)             (20,293) (48,131) (7,569)
    PERIOD, NET OF TAX
                                                                                                                                                                       ===

    Attributable to:
    Owners of the Company                                                            (2,171)             (31,341)             (4,927)             (19,962) (50,286) (7,908)
    Non-controlling interests                                                          (218)                  11                   2                 (331)   2,155     339
                                                                                       ----                  ---                 ---                 ----    -----     ---
                                                                                     (2,389)             (31,330)             (4,925)             (20,293) (48,131) (7,569)
                                                                                     ======              =======              ======              =======  =======  ======
                                                                                                              CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                            AS OF JUNE 30, 2012 AND DECEMBER 31, 2011
                                                                                                            (Amounts in thousands, except share data)

                                                                                                                                                             December 31,                                    June 30,                                    June 30,
                                                                                                                                                                     2011                                        2012                                        2012
                                                                                                                                                                     ----                                        ----                                        ----
                                                                                                                                                                      CNY                                         CNY                                         US$
                                                                                                                                                                           (Unaudited)                                 (Unaudited)

    ASSETS
    NON-CURRENT ASSETS
    Property, plant and equipment                                                                                                                               2,053,173                                   2,166,287                                     340,611
    Rehabilitation fund                                                                                                                                            26,019                                      33,507                                       5,268
    Prepayments                                                                                                                                                    80,418                                     141,488                                      22,247
    Deferred tax assets                                                                                                                                             2,825                                       2,384                                         375

    TOTAL NON-CURRENT ASSETS                                                                                                                                    2,162,435                                   2,343,666                                     368,501
                                                                                                                                                                ---------                                   ---------                                     -------

    CURRENT ASSETS
    Inventories                                                                                                                                                    11,787                                      16,864                                       2,652
    Trade and bill receivables                                                                                                                                     31,205                                      15,699                                       2,468
    Prepayments                                                                                                                                                    13,091                                      12,525                                       1,969
    Other receivables                                                                                                                                              21,289                                      28,435                                       4,471
    Due from related companies                                                                                                                                        774                                           -                                           -
    Restricted bank deposits                                                                                                                                       21,000                                      10,791                                       1,697
    Term deposits with an original maturity over three                                                                                                             20,000                                      20,000                                       3,145
    months
    Cash and cash equivalents                                                                                                 136,587                                          289,184                                      45,469

    TOTAL CURRENT ASSETS                                                                                                      255,733                                          393,498                                      61,871

    TOTAL ASSETS                                                                                                            2,418,168                                        2,737,164                                     430,372
                                                                                                                            =========                                        =========                                     =======

    LIABILITIES AND EQUITY

    CURRENT LIABILITIES
    Trade and bill payables                                                                                                    70,882                                           76,113                                      11,967
    Other payables and accrued liabilities                                                                                     52,173                                           53,923                                       8,478
    Interest bearing loans                                                                                                    225,000                                          297,000                                      46,698
    Due to related companies                                                                                                  184,477                                          342,777                                      53,896
    Interest payable                                                                                                            5,979                                            5,742                                         903
    Taxes payable                                                                                                              23,923                                           28,334                                       4,456
    Mining rights payable                                                                                                      22,612                                           20,860                                       3,280

    TOTAL CURRENT LIABILITIES                                                                                                                                     585,046                                     824,749                                     129,678
    NET CURRENT LIABILITIES                                                                                                                                      (329,313)                                   (431,251)                                    (67,807)
    TOTAL ASSETS LESS CURRENT LIABILITIES                                                                                                                       1,833,122                                   1,912,415                                     300,694

    NON-CURRENT LIABILITIES
    Interest bearing loans                                                                                                    523,742                                          656,742                                     103,261
    Due to the Shareholder                                                                                                    262,657                                          265,247                                      41,706
    Interest payable                                                                                                           18,205                                           20,070                                       3,156
    Deferred tax liabilities                                                                                                  290,043                                          291,017                                      45,757
    Mining rights payable                                                                                                     103,378                                           91,718                                      14,421
    Asset retirement obligations                                                                                                9,204                                            9,861                                       1,550
                                                                                                                                -----                                            -----                                       -----

    TOTAL NON-CURRENT LIABILITIES                                                                                           1,207,229                                        1,334,655                                     209,851
                                                                                                                            ---------                                        ---------                                     -------

    TOTAL LIABILITIES                                                                                                       1,792,275                                        2,159,404                                     339,529
                                                                                                                            ---------                                        ---------                                     -------

    EQUITY
    Issued capital                                                                                                            312,081                                          312,081                                      49,069
    Other capital reserves                                                                                                    536,872                                          536,872                                      84,414
    Reserves                                                                                                                   19,209                                           57,231                                       8,998
    Accumulated losses                                                                                                      (322,714)                                         (408,445)                                    (64,221)
    Other comprehensive losses                                                                                                 (5,240)                                          (7,820)                                     (1,230)
                                                                                                                               ------                                           ------                                      ------

    EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY                                                                                                                  540,208                                     489,919                                      77,030
    NON-CONTROLLING INTERESTS                                                                                                                                      85,685                                      87,841                                      13,813
                                                                                                                                                                   ------                                      ------                                      ------
    TOTAL EQUITY                                                                                                                                                  625,893                                     577,760                                      90,843
                                                                                                                                                                  -------

    TOTAL LIABILITIES AND EQUITY                                                                                                                                2,418,168                                   2,737,164                                     430,372
                                                                                                                                                                =========                                   =========                                     =======

For the convenience of the reader, amounts in Renminbi, the Chinese currency (“CNY”), have been translated into United States dollars (“US$”) at the applicable rate of US$1.00 = CNY6.36 as quoted by Bloomberg Finance L.P. as of June 30, 2012. No representation is made that the CNY amounts could have been, or could be, converted into US$ at that rate, or at all.

The condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2012 (unaudited) and the condensed consolidated balance sheet as of June 30, 2012 (unaudited) are derived from, and should be read in conjunction with, the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2012 and 2011, which was filed with the Securities and Exchange Commission on December 21, 2012 under cover of Form 6-K. The results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2012.

Mr. Feilie Li, the Company’s Chairman and CEO, commented on the 2012 interim results: “In view of the continuing economic growth in the PRC, we believe that demand for coal, in particular coal used in the chemical industry, will continue to be robust in the medium and long run. We are positive about the prospects for the coal mining industry in the PRC and we will continue to pursue growth through acquisition and consolidation of small to medium sized coal mines in Guizhou province.”

About China Natural Resources, Inc.:

China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People’s Republic of China, is currently engaged in (a) the acquisition and exploitation of mining rights, including the exploration, mineral extraction, processing and sale of iron, zinc and other nonferrous metals, extracted or produced at mine primarily located in Anhui Province in the PRC, and (b) the acquisition, exploration, development and production of coal resources in Guizhou Province in the PRC.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of federal securities laws. These statements include, without limitation, statements regarding the intent, belief and current expectations of management with respect to the Company’s policies regarding investments, dispositions, financings, conflicts of interest and other matters; and trends affecting the Company’s financial condition or results of operations. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, many of which are outside of our control, and actual results may differ materially from those in the forward-looking statement. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are: uncertainties relating to our business operations and operating results; uncertainties regarding the governmental, economic and political environment in the People’s Republic of China; uncertainties associated with metal and coal price volatility; uncertainties associated with the Company’s reliance on third-party contractors and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including without limitation the information set forth in our Annual Report on Form 20-F under the heading “Risk Factors”. While management believes that its assumptions forming the bases for forward looking statements are reasonable, assumed facts or bases generally vary from actual results, and there can be no assurance that the expectations or beliefs expressed in forward looking statements will be achieved or accomplished.

SOURCE China Natural Resources, Inc.


Source: PR Newswire