China Natural Resources Releases Interim Results of Operations

HONG KONG, Dec. 30, 2010 /PRNewswire-FirstCall/ -- CHINA NATURAL RESOURCES, INC. (Nasdaq: CHNR), a company based in the People's Republic of China, today released unaudited interim financial information for the three and six months ended June 30, 2010 as follows:

CHINA NATURAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

(Amounts in thousands, except share and per share data)



Three Months Ended June 30


Six Months Ended June 30


2009


2010


2010


2009


2010


2010


RMB


RMB


US$


RMB


RMB


US$













NET SALES

12,999 


24,850 


3,664 

 

17,563 


33,623 


4,958 

COST OF SALES

(12,371)


(15,729)


(2,319)

 

(16,268)


(21,727)


(3,204)

GROSS PROFIT

628 


9,121 


1,345 

 

1,295 


11,896 


1,754 







 






SELLING, GENERAL AND ADMINISTRATIVE EXPENSES,

including share-based compensation expense of RMB13,008 (US$1,904) for the six months ended June 30, 2010 and 2009, and RMB6,504 (US$952) for the three months ended June 30, 2010 and 2009






 











 






 

 

 

(12,870)


(25,105)


(3,702)

 

(26,409)


(38,402)


(5,662)

OPERATING LOSS FROM CONTINUING OPERATIONS

(12,242)


(15,984)


(2,357)

 

(25,114)


(26,506)


(3,908)

FINANCE COST

 


(436)


(64)

 

 


(436)


(64)

INTEREST INCOME

65 


293 


43 

 

421 


774 


114 

OTHER INCOME (EXPENSE), NET


(1,829)


(270)

 

529 


629,671 


92,847 

LOSS ATTRIBUTABLE TO INVESTMENT IN UNCONSOLIDATED INVESTEES






 






(2,960)


(1,826)


(269)

 

(5,665)


(3,612)


(533)

PROFIT (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(15,137)


(19,782)


(2,917)

 

(29,829)


599,891 


88,456 

INCOME TAXES

(714)


(2,155)


(318)

 

(1,266)


(3,600)


(531)

PROFIT (LOSS) FROM CONTINUING OPERATIONS

(15,851)


(21,937)


(3,235)

 

(31,095)


596,291 


87,925 







 






DISCONTINUED OPERATION






 






INCOME (LOSS) FROM A DISCONTINUED OPERATION


-  


-  

 

(15,052)


-  


-  

NET INCOME (LOSS)

(15,846)


(21,937)


(3,235)

 

(46,147)


596,291 


87,925 

OTHER COMPREHENSIVE INCOME (LOSS)






 






Foreign currency translation adjustments






 






Attributable to CHNR Shareholders

(60)


3,951 


583 

 

438 


3,844 


567 

Attributable to non-controlling interests






TOTAL COMPREHENSIVE INCOME (LOSS)

(15,906)


(17,986)


(2,652)

 

(45,709)


600,135 


88,492 







 






COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:






 






CHNR Shareholders

(15,073)


(17,616)


(2,597)

 

(38,142)


600,726 


88,579 

Non-controlling interests

(833)


(370)


(55)

 

(7,567)


(591)


(87)


(15,906)


(17,986)


(2,652)

 

(45,709)


600,135 


88,492 







 






NET INCOME (LOSS) ATTRIBUTABLE TO:






 






Continuing operations

(15,016)


(21,567)


(3,180)

 

(29,549)


596,882 


88,012 

Discontinued operation


-  


-  

 

(9,031)


-  


-  

CHNR Shareholders

(15,013)


(21,567)


(3,180)

 

(38,580)


596,882 


88,012 

Non-controlling interests

(833)


(370)


(55)

 

(7,567)


(591)


(87)


(15,846)


(21,937)


(3,235)

 

(46,147)


596,291 


87,925 







 












 












 






EARNINGS (LOSS) PER SHARE:






 






Basic






 






Income (loss) from continuing operations

(0.71)


(0.96)


(0.14)

 

(1.42)


26.94 


3.97 

Loss from a discontinued operation


-  


-  

 

(0.43)


-  


-  

Income (loss) per share

(0.71)


(0.96)


(0.14)

 

(1.85)


26.94 


3.97 







 






Diluted






 






Income (loss) from continuing operations

(0.71)


(0.96)


(0.14)

 

(1.42)


26.61 


3.92 

Loss from a discontinued operation


-  


-  

 

(0.43)


-  


-  

Income (loss) per share

(0.71)


(0.96)


(0.14)

 

(1.85)


26.61 


3.92 


 


 


 

 

 


 


 

WEIGHTED AVERAGE NUMBER






 






OF SHARES OUTSTANDING






 






Basic

21,123,416 


22,468,471 


22,468,471 

 

20,883,085 


22,158,775 


22,158,775 







 






Diluted

21,123,416 


22,468,471 


22,468,471 

 

20,883,085 


22,430,086 


22,430,086 
















CHINA NATURAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2010 AND DECEMBER 31, 2009

(Amounts in thousands, except share data)






December 31,


June 30,


June 30,





2009


2010


2010





RMB


RMB


US$







(Unaudited)


(Unaudited)










CURRENT ASSETS









Cash




186,582 


95,650 


14,104 

Trade receivables:









Related parties




68,740 



Others




1,070 


7,696 


1,135 

Bills receivable




1,000 


2,500 


369 

Notes and advances receivable




169,018 


9,384 


1,384 

Advances to an unconsolidated investee




37,432 



Inventories




4,187 


10,463 


1,543 

Deferred tax assets




2,073 


224 


33 

Other assets




11,662 


43,283 


6,382 










TOTAL CURRENT ASSETS




481,764 


169,200 


24,950 










DEFERRED TAX ASSETS





1,705 


251 










INVESTMENTS IN UNCONSOLIDATED INVESTEES




12,856 


9,395 


1,385 










PROPERTY AND EQUIPMENT, NET




198,456 


1,610,412 


237,460 










TOTAL NON-CURRENT ASSETS




211,312 


1,621,512 


239,096 










TOTAL ASSETS




693,076 


1,790,712 


264,046 










CURRENT LIABILITIES









Bills payable




20,000 



Short-term bank loan





30,000 


4,424 

Accounts payable




17,851 


56,906 


8,391 

Advances from customers




339 


2,159 


318 

Accrued liabilities




4,807 


8,105 


1,195 

Income tax and other taxes payable




2,198 


333 


49 

Other payables




30,534 


49,197 


7,254 

Interest payable current




648 


3,854 


568 

Payables to related parties




55,460 


531,774 


78,412 










TOTAL CURRENT LIABILITIES




131,837 


682,328 


100,611 










Long-term debt and other obligations




165,538 


242,358 


35,736 

Interest payable non current




7,743 


12,648 


1,865 

Deferred tax liabilities





290,236 


42,796 

Other payables




8,681 












TOTAL NON-CURRENT LIABILITIES




181,962 


545,242 


80,397 










TOTAL LIABILITIES




313,799 


1,227,570 


181,008 










EQUITY









China Natural Resources, Inc. equity:









Common shares, no par:

Authorized - 200,000,000 shares;

Issued and outstanding – 21,123,416 shares and 22,723,416 at December 31, 2009 and June 30, 2010, respectively




















312,081 


312,081 


46,017 

Other equity




77,002 


193,504 


28,533 

Other comprehensive loss




(35,662)


(31,818)


(4,691)










TOTAL CHINA NATURAL RESOURCES, INC. EQUITY




353,421 


473,767 


69,859 

NON-CONTROLLING INTERESTS




25,856 


89,375 


13,179 





379,277 


563,142 


83,038 










TOTAL LIABILITIES AND EQUITY




693,076 


1,790,712 


264,046 




For the convenience of the reader, amounts in Renminbi ("RMB") have been translated into United States dollars ("US$") at the applicable rate of US$1.00 = RMB6.7818 as quoted by Bloomberg Finance L.P. as of June 30, 2010. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.

The condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2010 (unaudited) and the condensed consolidated balance sheet as of June 30, 2010 (unaudited) are derived from, and should be read in conjunction with, the Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2010 and 2009, which was filed with the Securities and Exchange Commission on December 30, 2010 under cover of Form 6-K. The results of operations for the six months ended June 30, 2010 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2010.

Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2010 interim results: "The positive results for the six months ended June 30, 2010 signify the success of our strategy in pursuing growth through acquisition and consolidation of small to medium sized coal mines in Guizhou Province. In view of the continuing economic growth in the PRC, 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 the PRC."

About China Natural Resources, Inc.:

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, exploration, 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 statements include, without limitation, statements regarding the intent, belief and current expectations of management with respect to the Company's policies regarding investments, dispositions, financings, conflicts of interest and other matters; and trends affecting the Company's financial condition or results of operations. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, many of which are outside of our control, and actual results may differ materially from those in the forward-looking statement. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are: uncertainties relating to our business operations and operating results; uncertainties regarding the governmental, economic and political environment in the People's Republic of China; uncertainties associated with metal and coal price volatility; uncertainties associated with the Company's reliance on third-party contractors and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including without limitation the information set forth in our Annual Report on Form 20-F under the heading "Risk Factors". While management believes that its assumptions forming the bases for forward looking statements are reasonable, assumed facts or bases generally vary from actual results, and there can be no assurance that the expectations or beliefs expressed in forward looking statements will be achieved or accomplished.

SOURCE China Natural Resources, Inc.




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