Longwei Petroleum increases 2010 sales by 72%, surpassing previous guidance for the year
Chinese petroleum products company Longwei Petroleum (NYSE Amex: LPH) generated roughly $39 million in revenues for the month of June 2010, the final month of its fiscal year, representing a 130% increase over revenues in the same period last year on account of its new Gujiao storage facility.
Total revenues for the year ending June 30, 2010 were $339.4 million, a 72% increase from fiscal 2009 revenues, and 9% above management`s previous 2010 guidance of $310.8 million.
Gross profit for the twelve-month period was $68.5 million, up 119% from fiscal 2009 gross profit of $31.3 million.
The company expects sales in fiscal 2011 to exceed $500 million.
As China`s economic growth becomes increasingly dependent on meeting the growing demand for oil from both domestic supply and foreign imports, Longwei believes it is in the ideal position to capitalize.
Increasing oil demand is attributable not only to greater vehicle use in China, but also to industrial activity in China's fastest-growing provinces, including Shanxi province, where Longwei operates.
"As one of the largest oil and gas distributors in China, Longwei is a direct beneficiary of the long-term upward trend in oil consumption and vehicle use in China. Last year, China became the largest new automobile market in the world, and a recent International Energy Agency report suggests that China may now also be the top global energy consumer as well," said CFO Michael Toups.
Longwei is an energy company engaged in the storage and distribution of oil and gas in the People's Republic of China. Its oil and gas operations consist of transporting, storing, and selling finished petroleum products. The company's headquarters are located in Taiyuan City, Shanxi Province and it has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan City and Gujiao, Shanxi.
The company looks to earn profits by selling its products at competitive prices to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations.
Longwei was up 6.4% to $2.16 just after noon on Tuesday.
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