Longwei Petroleum Reports April and May 2012 Revenues Up 4.6% Year-Over-Year to $89.0 Million
Independent Auditors Complete Field Work for Tax Reconciliation
TAIYUAN CITY, China, June 26, 2012 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), today reported its revenues for April and May 2012 were up 4.6% year-over-year to $89.0 million.
For the eleven-month period ended May 31, 2012, Longwei reported its revenues were up 5.6% year-over-year to $463.2 million. During this period the retail price of gasoline was adjusted by the National Development and Reform Commission ("NDRC"), the PRC's top economic planning organization, five times during a period of fluctuating international crude oil prices. The retail price of gasoline in the PRC has been adjusted upward twice and downward three times for different durations of time during the Company's fiscal 2012. While the Company's overall sales price per metric ton has gone up year-over-year because of the longer periods at higher prices, the net effect of the retail price changes is that gasoline prices for the PRC consumer are now 2.8% lower than at June 30, 2011.
Brent crude oil, one of the primary components in the basket of crude oil prices used by the NDRC to determine the retail price of gasoline in the PRC, is currently trading near 18-month lows of approximately US $90 per barrel. Brent crude oil's most recent peak was approximately US $128 per barrel in early March 2012. (Reuters, June 21, 2012, "Oil Falls Below $90 for the First Time Since December 2010.")
The Company continues to use its working capital to increase its inventory position and product availability based on the current changes in the market price. "We are balancing our working capital to take advantage of pricing opportunities, as well as balancing the funding required to complete the acquisition of the Huajie Petroleum assets," stated Mr. Cai Yongjun, Chairman and CEO of Longwei. "We look forward to finalizing the Huajie Petroleum asset purchase, which will add another 100,000 metric tons to our storage capacity and solidify our position as one of the largest private fuel distributors in the PRC."
Longwei has also reported that its independent auditor, Child, Van Wagoner & Bradshaw, PLLC, Certified Public Accountants ("CVB"), has completed its field work in Taiyuan City for the tax reconciliation report commissioned by the Company's Audit Committee (the "Tax Reconciliation Report"). CVB is Longwei's Public Company Accounting Oversight Board qualified independent auditor with offices in the U.S. and Hong Kong. As part of the Tax Reconciliation Report, CVB has, among other things, reviewed the Company's management reports and independently obtained information related to income tax and value added tax filings with the PRC's State Administration of Taxation ("SAT"), as well as filings with the PRC's State Administration of Industry and Commerce ("SAIC"). The verification procedures included independent access granted to CVB of the SAT tax system information and a site visit to the local SAIC office in the provincial capital of Taiyuan City to directly obtain Company filings. The Company anticipates receiving the final Tax Reconciliation Report from CVB in July 2012.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at firstname.lastname@example.org.
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.
SOURCE Longwei Petroleum Investment Holding Ltd.
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