China Tracker - Details for Longwei Petroleum (LPH)


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 Longwei Petroleum
 Business Outlook

Longwei anticipates the completion of the approximately $110.9 million asset purchase of Huajie Petroleum as soon as possible based on the Company's working capital management. The Company is currently negotiating potential financing opportunities, which may allow Longwei to accelerate the closing and provide additional working capital to shorten the ramp-up time for operations. Longwei expects to continue to expand its customer base by utilizing the Company's distribution platforms. The Company's strategy is to leverage its customer and supplier relationships to develop additional business. Management may also look for opportunities to expand its business that are considered accretive to earnings.

"We continue to capitalize on the growing domestic demand for petroleum products in China and expect strong top-line and bottom-line results in fiscal 2013. The pending addition of the Huajie Petroleum facility in northern Shanxi Province will provide an additional catalyst for growth in the quarters ahead. On September 11, 2012, China's National Development and Reform Commission increased gasoline prices by 6.1 percent and diesel prices by 6.5 percent per metric ton due to rising international crude oil prices. The adjustment will enable us to raise prices on our petroleum products, which we believe will strengthen our revenues and profit margins. By carefully managing our inventory levels in line with oil price fluctuations, and continuing to execute our business strategy, we expect improved shareholder value over the long term."

(Source: PR Newswire, 2012-09-13)

We have recently completed our audit field work and plan to release our year-end financial statements on Form 10-K during mid-September. For the fiscal year ended June 30, 2011, the Company's revenues are currently expected to be approximately $480 million and net income is expected to be approximately $65 million, adjusted for the warrant derivative liability expense. We have revised our fiscal 2011 revenue guidance downward by 4% as we have tried to maintain margin integrity during a period of volatile price fluctuations.

We have currently paid a deposit of RMB 550 million (approximately $85.1 million) through cash on hand for the purchase of the assets of Huajie Petroleum Co., a fuel storage depot in northern Shanxi Province with a 100,000-metric-ton storage capacity. We remain committed to not diluting our shareholders at the current share price level, so the Company has arrangements to pay the balance of the total purchase price of RMB 700 million (approximately $108.3 million) using cash on hand. We have already paid approximately 81% of the purchase price and intend to close as soon as possible during our second fiscal quarter. Longwei expects the facility to contribute approximately $300 million to revenues and $40 million to net income during the first 12 months of operations.

We anticipate our two current facilities will grow in volume at least 20% during fiscal 2012. We are adjusting our organic revenue growth guidance for these two facilities to approximately $576 million with net income of approximately $78 million for our current fiscal year ending June 30, 2012. We will update our fiscal 2012 guidance to reflect the new asset purchase once the facility is closed and online, which we anticipate during our second fiscal quarter.

(Source: PR Newswire, 2011-08-24)

Longwei Petroleum today announced that it has increased its deposit to RMB 550 million (approximately $85.1 million) through cash on hand for the purchase of the assets of Huajie Petroleum Co., a fuel storage depot in northern Shanxi Province with a 100,000-metric-ton storage capacity. Longwei intends to acquire the assets of Huajie Petroleum for a total of RMB 700 million (approximately $108.3 million).

"We did not close on the transfer of ownership of the assets because we believe it is important for the integrity of the transaction to complete the purchase under terms suitable to the Company and our shareholders. We intend to close as soon as possible, and we remain committed to not diluting our shareholders in this transaction. ... Given the recent investor concerns about acquisitions and asset purchases by Chinese companies, we believed, based on advice from our U.S. counsel and auditor, that it was in the Company's best interest to reach a final agreement on the transfer of assets with a clear transfer of title at closing. We remain committed to the asset purchase as part of our growth strategy for fiscal 2012 and advanced RMB 335 million (approximately $51.8 million USD) during the quarter ended June 30, 2011 toward the purchase price.

This acquisition will nearly double our storage capacity to a total of 220,000 metric tons and extend our reach into the fast-growing industrial area of northern Shanxi Province. With the addition of the Huajie facility, we will strengthen our lead as the largest non-state-owned fuel storage and distribution business in the province and will be better positioned to capitalize on the rising demand for petroleum products in our regional market. We will continue to seek accretive acquisitions with the potential to enhance our regional presence and attract new customers. Our distribution model has proven successful, and as we build upon the strong foundation we have established, we remain committed to increasing value for our shareholders."

(Source: PR Newswire, 2011-07-08)

[Longwei] reconfirmed the Company's previously stated guidance for the fiscal year ending June 30, 2011, of $500 million in revenues and $70 million in net income (adjusted for non-cash warrant derivative liability charges).

(Source: PR Newswire, 2011-06-07)

To meet the constant growth in demand for fuel in China, we are in the process of nearly doubling our capacity through the acquisition of the assets of Haujie Petroleum. As of the end of the third quarter our deposit paid has reached $32.8 million, and as previously disclosed, we intend to pay the remaining balance of the purchase price using a combination of cash on hand, bank and other financing, and working capital. If we are unable to secure favorable terms for debt or equity financing, we will complete the purchase using cash on hand. We are very excited about the growth prospects moving forward and fully expect to meet our previous guidance of at least $500 million in revenues and $70 million in net income (adjusted for non-cash warrant derivative liability charges) for the 2011 fiscal year.

(Source: PR Newswire, 2011-05-17)

Longwei Petroleum announced its plan for financing the acquisition of the assets of Haujie Petroleum Co. The Company has entered into a letter of intent to acquire the assets of a fuel storage depot, with a 100,000 metric ton storage capacity, in northern Shanxi Province for RMB 700 million (approximately US $106.5 million). The Company expects the facility to contribute approximately $300 million to revenues and $40 million to net income during the fiscal year ending June 30, 2012.

Longwei has previously stated that it intends to finance the asset acquisition using a combination of cash on hand, bank and other financing, and working capital assets. To further clarify its plans, the Company has announced that it has increased its deposit paid from approximately US $20 million to US $32.8 million as of March 31, 2011 and will finance at least 50% of the asset acquisition through cash on hand. The balance of the 50% purchase price will be financed through either debt or equity financing. The Company has stated it will not use its common stock to finance more than US $25 million of the asset acquisition price at a per-share price of no less than US $3.00. If the Company cannot establish suitable terms for debt or equity financing, it will complete the purchase price using cash generated through operations. Longwei intends to close the asset purchase on or before June 30, 2011.

(Source: PR Newswire, 2011-04-27)

The Chairman has stated the Company will not participate in an equity financing at current price per share levels. ... With less than three months remaining in our fiscal year, we believe we will exceed our target numbers. We projected $500 million in revenues and $70 million in net income [adjusted net of the warrant derivative liability, which is a non-cash expense]. Our improved outlook is based on the fact that China recently announced a 500 RMB increase per metric ton in petroleum prices, which drives up our top and bottom lines. The increase also adds over $2.5 million USD in value to our current inventory.

(Source: PR Newswire, 2011-04-15)

Longwei Petroleum announced today that it has entered into a letter of intent to acquire a fuel storage depot in northern Shanxi Province with a 100,000 metric ton storage capacity. Longwei paid a deposit of RMB 140 million (approximately US $20 million) at the signing of the letter of intent toward the full purchase price of RMB 700 million (approximately US $106.5 million). The Company expects the facility to contribute approximately $300 million to revenues and $40 million to net income during the fiscal year ending June 30, 2012.

(Source: PR Newswire, 2011-03-14)

Longwei Petroleum announced today that it expects to benefit from the gasoline and diesel price increase enacted by China's National Development and Reform Commission (NDRC) on February 21, 2011. The 4.5% increase, which translates to $53.20 per ton, is the second increase in the past two months and is based on a mechanism that allows the NDRC to adjust fuel prices when the cost of crude oil changes by more than 4 percent over a period of 22 working days.

"The NDRC's decision will allow us to raise prices of our fuel products, which we anticipate will have a positive effect on our revenues and profits going forward. We also expect to experience a slight gross margin improvement, as our inventory on-hand is recorded on a weighted average basis and will be sold at higher market prices. Given the increase in demand for fuel and oil products as well as the fuel price increase, we are confident in our ability to meet our guidance of $500 million in revenues and $70 million in net income, or $0.62 EPS, for fiscal 2011."

(Source: PR Newswire, 2011-02-24)

Our business has never been stronger, as demonstrated by our record revenue and earnings results. Revenues for the quarter were at an all-time high, and both our top and bottom lines showed very strong growth year-over-year. We recently renewed our supply contracts with fifteen major customers, and we plan to increase our storage capacity in the current calendar year to meet the constant growth in demand for fuel in China. We are very excited about the growth prospects in our regional market and fully expect to meet our previous guidance of at least $500 million in revenues and $70 million in net income (adjusted for non-cash warrant derivative liability charges) for the 2011 fiscal year.

(Source: PR Newswire, 2011-02-15)

Longwei Petroleum today announced that it intends to expand its petroleum storage capacity in 2011 to keep up with growing demand for petroleum products in its region. The Company wishes to clarify to its shareholders that it has no intention of raising capital at current price levels and would only issue shares in the future to make an accretive acquisition that would increase storage capacity, revenue and earnings.

"We are actively exploring strategic opportunities to take advantage of the growth in the marketplace. Our last acquisition has proven to be very successful, and we want to be prepared as we position the Company to expand our offering and customer base. China is not only dependent on its two state-owned oil companies to increase storage capacity, but it needs independent operators to actively grow their businesses as well. We are well-positioned as the largest independent oil storage operator in Shanxi Province to continue to build our storage capacity and grow our distribution within the surrounding regions."

(Source: PR Newswire, 2010-12-17)

Since we are qualified as an exchange-listed company, we have also included in the filing a shelf registration for up to $50 million so that we are prepared to react to accretive opportunities as our share price builds value. We are positioning the Company to take advantage of strategic opportunities we believe will become available to us in 2011. Our last acquisition has proven to be very successful and we want to be prepared as we position the Company to expand our offering and customer base.

(Source: PR Newswire, 2010-12-13)

Longwei Petroleum today announced annual contracts with two new customers for its Gujiao petroleum storage facility representing sales of 19,000 metric tons of petroleum products. The Company estimates that the contracts will be worth approximately $20.1 million based on current pricing levels.

"We are very pleased with the progress and sales development of our Gujiao facility. We are on track with our plan and expect continued strong operating results for our current fiscal year. We will continue to add new customers, and the recent diesel shortage experienced in the region has benefited our business because we hold long-term supply contracts with our refinery partners that guarantee availability. In addition, we are looking for other strategic opportunities with a similar payback period to the Gujiao facility to support the strong demand for petroleum products from both the industrial and consumer markets. As the leading private petroleum supplier in our region, we believe we are well-positioned to take advantage of opportunities as they present themselves."

In order to meet China's energy-saving targets for its 11th Five-Year Plan (2006 – 2010), some municipal governments are cutting off electricity supplies to reduce emissions. The electricity rationing measures have caused a surge in demand for electrical power from diesel generators, creating a widespread shortage of diesel fuel. Some experts, including Dr. Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, do not expect the shortage to improve before the end of 2010, as many businesses are still using diesel to generate power for their operations, and say that power-cutting policies by local governments must be retracted in order for the situation to be resolved.

(Source: PR Newswire, 2010-12-02)

"We have continued to improve our working capital management to enhance our inventory level flexibility and purchasing capability to react to changes in market prices. We are experiencing strong demand from our growing customer base. Our performance remains on-track as we continue to add new customers, as well as the organic growth of our existing customer base due to the strong domestic petroleum demand from both industrial and consumer customers. We expect fiscal 2011 to be another record year as we continue to penetrate the market for our products and experience the benefits of a full year of revenue generation from our new Gujiao facility."

(Source: PR Newswire, 2010-11-16)

During the month of June, Longwei generated roughly $39 million in revenues, an increase of 130% from $17.0 million in June 2009. Gross profit in June of this year reached $8.1 million, up 138% from $3.4 million in the same period last year.

Total revenues for the fiscal year ended June 30, 2010 were $339.4 million, a 72% increase from fiscal 2009 revenues of $196.8 million. Sales figures for the fiscal year ended June 30, 2010 surpassed management's previously stated fiscal 2010 guidance of $310.8 million by 9.2%. Gross profit for the twelve-month period ended June 30, 2010 was $68.5 million, up 119% from fiscal 2009 gross profit of $31.3 million.

"Building on our strong growth this past year, we expect sales in fiscal 2011 to exceed $500 million. The outlook for our industry and economic environment is promising, as China's rapid economic growth recently propelled it past Japan as the world's second largest economy in terms of GDP. Coupled with China's growing dominance in the automobile market and strong industrial growth in our operating region, Longwei is in an ideal position to capitalize on the boom in oil demand. ... We look forward to another record year for Longwei in 2011."

(Source: PR Newswire, 2010-09-07)

The Company will begin trading on the Amex on July 22, 2010 under the ticker symbol LPH. "I can think of no better way to finish a strong fiscal year and jumpstart a new one than with this pivotal move to a senior exchange. We welcome the increased responsibility and accountability that the new listing will entail, and we see it as a validation of the trust and credibility that we have worked so hard to build with our investors. As a leading petroleum distributor in China, Longwei is strongly positioned to continue expanding its reach in the coming year. The transition to NYSE Amex enables us to increase awareness in the investment community and attract a larger, more diverse shareholder base. We would like to thank our shareholders, employees, and other stakeholders for their ongoing support as we move forward into what will undoubtedly be a record year for Longwei Petroleum."

(Source: PR Newswire, 2010-07-21)

Total revenues for the two months ended May 31, 2010 were $72.9 million, up 128% from $32.0 million for the same period last year. Gross profit for the two-month period was $15.4 million, up 151% from $6.1 million. Revenues and gross profit for the eleven months ended May 31, 2010 were $300.4 million and $60.4 million, up 67% and 62% respectively from the same period last year. Management reaffirmed that the Company's performance in the fiscal year ended June 30, 2010 will exceed its earlier guidance. The Company expects continued favorable market and industry conditions to boost revenue growth and profitability in the first half of fiscal 2011.

(Source: PR Newswire, 2010-07-09)

Longwei has filed an application to list its common stock on the NYSE Amex Stock Exchange and will work with the NYSE Amex Stock Exchange to complete the listing process as soon as possible.

(Source: 8-K Filing, 2010-04-29)

Longwei Petroleum today announced that it expects to generate an additional $3.4 million each in revenue, gross profit and net profit from its current gasoline and diesel inventories and a corresponding increase in both gross profit and net profit from the sale of current inventory of approximately 5 percent as a result of the latest Chinese government mandate to raise the benchmark retail price of diesel oil and gasoline.

"Longwei has been increasing its gasoline and diesel inventory over the past several months in anticipation of this increase in pricing. We are pleased to report this important event, which is a one-time increase in our projected net profits for the 2010 fiscal year of 16 percent. As of the date of the price increase Longwei had a total of 34,126 metric tons of gasoline inventory and 35,544 metric tons of diesel inventory."

(Source: PR Newswire, 2010-04-19)

Longwei Petroleum today announced its revised financial guidance for the fiscal years ending June 30, 2010 and June 30, 2011. FY2010: Revenues $310.8 million, Gross Profit $62.5 million, Adjusted Net Income $40.3 million, Adjusted Basic EPS $0.45. FY2011: Revenues $494.7 million, Gross Profit $109.8 million, Adjusted Net Income $73.0, Adjusted Basic EPS $0.71.

(Source: PR Newswire, 2010-04-05)
LPH
Oil & Gas
SCORE
-3
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Current Price:  n/a
F10k Day (2008-11-28): -100.00%$2.00
2009 Close: -100.00%$2.70
2010 Close: -100.00%$2.59
2011 Close: -100.00%$1.30
High (2012-10-18): -100.00%$2.19
Low (2012-06-01): -100.00%$0.99
Exchange:
Market Capitalization: n/a
Total Shares: 101.77 mill
Float: n/a
Avg Volume: 265.60 k
Short Interest: 340.10 k
Short Ratio: 2.72%1.3 d
Last Quarter: 2012-06-30
Revenue (MRQ): 136.36 mill
Net Income (MRQ): 15.20 mill
Op. Cash Flow (MRQ): 6.11 mill
all financial data provided without warranty