Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH), announced today that it expects to report revenue of approximately $197 million, net income of $23.9 million and earnings per share of $0.31 for the fiscal year ended June 30, 2009
The Company also expects to raise capital of approximately $15 million in order to secure inventory and complete construction of its second storage tank facility in Gujiao City. This storage facility has a 70,000 metric ton capacity. The Company has conservatively estimated the Gujiao facility will add approximately $40 million in revenue and approximately $6 million to net income for the fiscal year ending June 30, 2010. This facility is expected to begin operations in January 2010 and will service large industrial plants in Shanxi province which are in proximity to the new facility.
The Company also stated that they wish to clarify certain assumptions and statements made in a recent conference presentation by the Company’s Chief Financial Officer, Jim Crane. The assumptions made during the presentation regarding a proposed capital raise were not explained accurately.
Jim Crane stated: “I wish to clarify and correct certain assumptions made regarding the capital raise and its impact on earnings for the fiscal year ending June 30, 2010. The proposed capital raise will not affect EBIDTA, which is expected to increase from $39 million in fiscal 2009 to $47 million in fiscal 2010, which equates to EBITDA per share of approximately $0.50. The raise will affect net income in fiscal 2010. A one-time charge will be reflected in the Company’s financial statements over the three-year term of the financing instrument, including fiscal 2010. The one-time charge is expected to total approximately $3.3 million. The estimated net income for fiscal 2010 is expected to be approximately $34 million.
We are projecting revenue of approximately $322 million in fiscal 2011, net income of $81 million, and earnings per share of approximately $0.86 per share.”
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is one of the leading distributors/wholesalers of diesel, gasoline, kerosene and fuel oils in Taiyuan City, the capital of and largest city in Shanxi Province, P.R. China. Longwei Petroleum Investment Holding Limited purchases diesel, gasoline, fuel oil and kerosene from various suppliers. As an intermediary, the company seeks to earn profits by buying diesel, gasoline, fuel oil and kerosene at competitive prices and selling them to other wholesalers. In addition, Longwei also earns revenues by acting as a purchase agent where they charge an agency fee — a fee which is charged to wholesalers who do not have a license to purchase directly from refineries. Further, the company owns a gas station located on its property where it generates additional profit and revenue. All of the company’s operating facilities are located in Taiyuan City, China.
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Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei’s industry, management’s beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei’s operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.