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China Bio Energy Holdings Group Reports Third Quarter 2008 Financial Results

November 10, 2008

                 - Revenue Increases 56% to $62.9 Million -                - Net Income Increases 122% to $9.1 Million -   - 2008 Make-good of $28 million net income and $0.73 in EPS reaffirmed -   

XI’AN, China, Nov. 10 /Xinhua-PRNewswire-FirstCall/ — China Bio Energy Holdings Group (BULLETIN BOARD: CBEH) , an energy company engaged in the distribution of heavy oil and finished oil products and the production and distribution of bio-diesel fuel, today announced consolidated financial results for the quarter ended September 30, 2008.

For the third quarter of 2008, total sales increased 56% to $62.9 million as compared to $40.3 million in the third quarter of 2007. This increase was mainly due to the addition of new customers, the general increase in demand for fuel in China, and increased bio-diesel production as compared to the third quarter of 2007. For the nine months ended September 30, 2008, sales revenue increased 142% to $156.9 million as compared to $64.8 million in the same period of 2007.

Gross profit increased 107% to $9.2 million in the third quarter of 2008 as compared to $4.4 million in the prior year period, representing gross margins of approximately 14.6% and 11.2%, respectively. Gross margin for bio- diesel fuel was approximately 31.0% and for petroleum products it was 10.6%. The improved gross margin is a result of lower production costs as we increased production of bio-diesel. For the nine months ended September 30, 2008, gross profit increased to $22.7 million, or 208%, versus $7.4 million in the prior year period, representing gross margins of approximately 14.5% and 11.4% respectively.

Operating expenses for the third quarter of 2008 was $391,000, an increase of 37% from the third quarter of 2007. As a percentage of sales, however, operating expenses decreased 11 basis points to 0.6%. This slight decrease was due to effective cost management by the Company. For the nine months ended September 30, 2008, operating expenses were $962,000, a 20% increase from the prior year period.

Operating income increased $4.7 million, or 112%, to $8.8 million for the third quarter of 2008 versus $4.1 million for the same period in 2007. As a percentage of sales, operating income was 13.9% for the third quarter of 2008 as compared to 10.5% for the prior year period. For the nine months ended September 30, 2008, operating income increased 231% to $21.8 million. As a percentage of sales, operating income was 13.9% for the first nine months of 2008 as compared to 10.2% for the prior year period.

Net income for the third quarter of 2008 increased 122% to $9.1 million as compared to $4.1 million in the prior year period. Net margin increased 410 basis points to 14.5% from 10.4%. Diluted earnings per share increased 59% to $0.27, compared to $0.17 in the third quarter of 2007. For the nine months ended September 30, 2008, net income increased $15.6 million, or 241%, to $22.1 million. Net margin for the first nine months of 2008 was 14.1% as compared to 10.0% in the prior year period. Diluted earnings per share increased 152% to $0.68 per share for the nine months ended September 30, 2008 as compared to $0.27 per share in the prior year period.

“We are pleased to report another strong quarter for China Bio Energy,” commented Mr. Gao Xincheng, Chief Executive Officer of CBEH. “After another record quarter the gross profit from our petroleum distribution business has now increased more than 60% through the first three quarters of this year as compared to the same period last year. Our bio-diesel business also recorded another very good quarter with both high revenue and gross margin. Our production rate reached full capacity and our feedstock supply remains ample and prices stable such that we continue to enjoy solid gross margins in excess of 30%. The four retail gas stations we obtained in the third quarter, which were previously experiencing difficulties due to interruptions in fuel supply, are all operating regularly with a continuous supply of fuel and are on track to meet the profit objectives we set when we made the investment in those stations. As we look ahead to the future, despite the current global economic environment, we remain confident that the fundamental factors driving growth in our business-China’s rapid economic growth combined with a shortage of domestic oil resources, our strategic location in Shaanxi which provides us with an abundant supply of petroleum to sell and feedstock for bio-diesel, our integrated production and distribution platform, and the competitive advantages we possess as a leader in our markets-will continue to provide us with the foundation for rapid growth. During our last round of financing we committed to make-good targets for 2008 of $28 million in net income and $0.73 in fully diluted earnings per share. We expect to meet those targets. Furthermore, with the $14.1 million we received via our recent convertible bond issuance and the exercise of warrants, we have the capital necessary to support further growth. As such, looking a bit farther down the road, we are also confident that 2009 be another year of strong growth for China Bio Energy.”

About China Bio Energy Holdings Group

CBEH is a distributor of petroleum-related products including gasoline, diesel, and heavy oil, and a manufacturer and distributor of bio-diesel fuel. CBEH’s bio-diesel fuel is made at its 100,000-ton capacity facility in Shaanxi province. Feedstock consists of naturally growing non-edible seeds and waste oil from restaurants. CBEH’s bio-diesel can be used as a complete substitute for petro-diesel and can be blended with petro-diesel at any ratio. The Company’s products are sold via its own distribution network, which includes four fuel depots in Shaanxi that have both road and rail access.

Safe Harbor Statement

This press release contains certain statements that may include “forward- looking statements”. All statements other than statements of historical fact included herein are “forward-looking statements”. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,”"expects” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov/ ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

                            For The Nine Months Ended   For The Three Months                                  September 30,          Ended September 30,   INCOME STATEMENT             2008        2007          2008        2007    Sales                     156,878,997  64,834,695  62,891,345  40,263,868    Cost of goods sold        134,134,971  57,453,443  53,740,270  35,857,368    Gross profit               22,744,026   7,381,252   9,151,075   4,406,500    General and    administrative expenses      962,445     801,487     390,950     286,067    Income from operations     21,781,581   6,579,765   8,760,125   4,120,433    Non-operating income    (expenses)        Interest expenses        (93,487)    (98,848)    (34,264)    (24,835)        Other income             381,892          --     381,892          --        Other expenses            (2,572)         --         (28)         --        Financial expenses           (46)         --          --          --         Total non-operating         income (expenses)       285,787     (98,848)    347,600     (24,835)    Net income                 22,067,368   6,480,917   9,107,725   4,095,598    Other comprehensive item        Foreign currency         translation gain      3,189,717     505,895     401,005     145,166    Comprehensive Income       25,257,085   6,986,812   9,508,730   4,240,764    Basic and diluted    weighted average shares    outstanding   Basic                      25,454,545  23,954,545  25,454,545  23,954,545   Diluted                    32,584,227  23,954,545  33,227,052  23,954,545    Basic and diluted net    earnings per share    available to common    stockholders   Basic                            0.87        0.27        0.36        0.17   Diluted                          0.68        0.27        0.27        0.17                                                     As of             As of   CONSOLIDATED BALANCE SHEETS                September 30,     December 31,                                                  2008                                               (Unaudited)          2007   ASSETS    CURRENT ASSETS         Cash and cash equivalents                522,013         1,382,371         Restricted cash                          200,000           200,000         Accounts receivable                    6,814,871           288,589         Other receivables                        765,567         1,548,681         Prepaid expenses                       6,073,631         2,896,493         Advance to suppliers                  18,726,762        16,546,506         Inventories                           23,008,301        12,082,962         Due from related party                   109,012           593,696             Total current assets               56,220,157        35,539,298     PREPAID EXPENSE - NONCURRENT                6,453,505                --     PROPERTY AND EQUIPMENT, net                10,269,554         8,166,250     TOTAL ASSETS                               72,943,216        43,705,548     LIABILITIES AND STOCKHOLDERS' EQUITY     CURRENT LIABILITIES         Accounts payable                              --           179,617         Advance from customers                 3,860,084           499,908         Taxes payable                             95,721           125,015         Other payables                         3,267,739         3,165,677         Accrued expenses                              --            67,875         Bank loans payable                     2,200,059         1,370,877         Auto loans payable - current          portion                                  66,889            67,287              Total current liabilities          9,490,492         5,476,256     AUTO LOANS PAYABLE - NONCURRENT                    --            33,655              Total liabilities                  9,490,492         5,509,911     COMMITMENT AND  CONTINGENCIES     STOCKHOLDERS' EQUITY         Preferred stock,  $.001 par          value;  authorized shares          1,000,000;  issued and          outstanding 1,000,000          shares                                    1,000             1,000         Common stock,  $.0001 par          value;  authorized shares          80,000,000;  issued and          outstanding 25,454,545          shares                                    2,545             2,545         Paid in capital                       19,611,938        19,611,938         Statutory reserve                      2,051,030         2,051,030         Accumulated other comprehensive          income                                5,509,449         2,319,732         Retained earnings                     36,276,762        14,209,392              Total stockholders' equity        63,452,724        38,195,637     TOTAL LIABILITIES AND STOCKHOLDERS'     EQUITY                                    72,943,216        43,705,548     For more information, please contact:     Dan Joseph    ICR, Inc.    Tel: +86-21-6122-1077     Bill Zima    ICR Inc. (US)    Tel: +1-203-682-8200  

China Bio Energy Holdings Group

CONTACT: Dan Joseph, ICR, Inc., +86-21-6122-1077 or Bill Zima, ICR Inc.(US), +1-203-682-8200 for China Bio Energy Holdings Group




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