China Natural Resources Releases 2010 Annual Results of Operations

Jun 30, 2011, 17:47 ET from China Natural Resources, Inc.

HONG KONG, June 30, 2011 /PRNewswire/ -- CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People's Republic of China, today released results of operations for the year ended December 31, 2010 (derived from the Company's audited financial statements) as follows.

CHINA NATURAL RESOURCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010 (Amounts in thousands, except share and per share data)

Year Ended December 31,

 2008

 2009

 2010

  2010

RMB

RMB

RMB

US$

NET SALES

Related parties

26,210

63,025

Third parties

74,707

44,725

100,813

15,259

100,917

107,750

100,813

15,259

COST OF SALES

Related parties

(25,452)

(61,887)

Third parties

(34,953)

(33,749)

(58,832)

(8,904)

(60,405)

(95,636)

(58,832)

(8,904)

GROSS PROFIT

40,512

12,114

41,981

6,355

ADMINISTRATIVE EXPENSES,

 including share-based compensation

 expense of RMB26,016 (US$3,938) in

 2008, 2009 and 2010

(48,407)

(57,271)

(92,090)

(13,938)

OTHER OPERATING EXPENSES

(9,316)

(9,031)

(1,367)

LOSS FROM OPERATIONS

(7,895)

(54,473)

(59,140)

(8,950)

FINANCE COST

(8)

(11)

(6,007)

(909)

INTEREST INCOME

2,158

2,654

1,112

168

LOSS ATTRIBUTABLE TO INVESTMENTS IN

  UNCONSOLIDATED INVESTEES

(9,691)

(11,211)

(6,310)

(955)

GAIN ON DISPOSAL OF

  UNCONSOLIDATED INVESTEES

30,571

4,627

GAIN FROM BARGAIN PURCHASE

  OF A SUBSIDIARY

624,148

94,468

OTHER EXPENSES

(2,985)

(236)

(1,874)

(282)

(10,526)

(8,804)

641,640

97,117

(LOSS) INCOME FROM CONTINUING

  OPERATIONS BEFORE INCOME TAX

(18,421)

(63,277)

582,500

88,167

INCOME TAX EXPENSE

(6,294)

(2,438)

(12,224)

(1,850)

(LOSS) INCOME FROM CONTINUING

  OPERATIONS

(24,715)

(65,715)

570,276

86,317

DISCONTINUED OPERATIONS

Income (loss) from discontinued Mark Faith

 operations, net of tax

24,560

(10,937)

Gain on disposal of Mark Faith

78,877

123,133

INCOME FROM DISCONTINUED OPERATIONS

103,437

112,196

NET INCOME

78,722

46,481

570,276

86,317

NET INCOME (LOSS) ATTRIBUTABLE TO:

CHNR Shareholders

78,722

54,140

574,395

86,940

Non-controlling interests

(7,659)

(4,119)

(623)

78,722

46,481

570,276

86,317

NET (LOSS) INCOME ATTRIBUTABLE TO CHNR SHAREHOLDERS:

Continuing operations

(24,715)

(62,431)

574,395

86,940

Discontinued operations

103,437

116,571

78,722

54,140

574,395

86,940

Year Ended December 31,

2008

2009

2010

2010

RMB

RMB

RMB

US$

NET (LOSS) INCOME PER SHARE:

   Basic

         (Loss) income from continuing operations

(1.28)

(2.97)

25.59

3.87

         Income from discontinued operations

5.36

5.55

         Net income per share

4.08

2.58

25.59

3.87

NET (LOSS) INCOME PER SHARE:

  Diluted

     (Loss) income from continuing operations

(1.11)

(2.86)

25.25

3.82

     Income from discontinued operations

4.64

5.34

     Net income per share

3.53

2.48

25.25

3.82

WEIGHTED AVERAGE NUMBER OF  COMMON SHARES OUTSTANDING:

  Basic

19,276,019

21,004,238

22,443,416

22,443,416

  Diluted

22,278,600

21,817,907

22,751,864

22,751,864

The consolidated statements of operations for the years ended December 31, 2008, 2009 and 2010 have been prepared in accordance with generally accepted accounting principles in the United States, and are derived from, and should be read in conjunction with, the Company's consolidated financial statements for the years ended December 31, 2008, 2009 and 2010, as filed with the Securities and Exchange Commission on June 30, 2011 under cover of Form 20-F.

Mr. Li Feilie, the Company's Chairman, commented on the results: "China Natural Resources recorded total sales revenue of RMB100.81 million (US$15.26 million) in 2010, down by 6.44% from a year earlier.  The drop in sales was mainly caused by the discontinuation of our copper business. While sales generated from our metal division achieved modest growth, our prime focus now is on our coal mining business. Following the gradual completion of construction and upgrade of our acquired coal mines, sales of coal will become our primary source of revenue in the coming years. The Company achieved net income attributable to shareholders of RMB574.40 million (US$86.94 million) in 2010, up by 961% from last year, of which RMB624.15 million (US$94.47 million) was derived from the bargain purchase gain relating to Guizhou Puxin's acquisition. The positive results reflect our ability to identify what we believe are undervalued assets, and signify the success of our strategy in pursuing growth through acquisition and consolidation of small to medium sized coal mines in mainland China. In view of the continuing economic growth in mainland China, we believe that demand for coal will continue to be robust in the foreseeable future. We are positive about the prospects of the coal mining industry in mainland China."

For the convenience of the reader, amounts in Renminbi ("RMB") have been translated into United States dollars ("US$") at the rate of US$1.00=RMB6.6070 quoted by Bloomberg Finance L.P. on December 31, 2010. The RMB is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.

About China Natural Resources: 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 mines primarily located in Anhui Province in the PRC, and (b) the acquisition, 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 forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements.  Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People's Republic of China, risks and hazards associated with the Company's mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company's reliance on third-party contractors uncertainties relating to possible future increases in operating expenses, including costs of labor and materials,  and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Although the Company's management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate.

SOURCE China Natural Resources, Inc.