HOHHOT CITY, China, June 23 /PRNewswire-Asia-FirstCall/ -- China Energy Corporation (OTC Bulletin Board: CHGY), ("China Energy" or "the Company"), a leading Inner Mongolia producer and processor of raw coal for domestic heating, electrical generation, and coking purposes for steel production in the People's Republic of China, with operations in coal trading and heat and power supply, today announced that it anticipates reporting between $17 million and $18 million in net income for its fiscal year ending November 30, 2010. This would represent at least a 233% increase in net income as compared to the 2009 fiscal year.
Management anticipates sales of its Coal Group, which includes coal mining and sales as well as coal trading, will represent approximately 80% to 90% of revenues during 2010. The Company expects to produce an aggregate of approximately 800,000 metric tons of coal for the fiscal year ending November 30, 2010. China Energy produced approximately 156,000 metric tons of coal in the first quarter of 2010 with an average sales price of $37 per ton. In May 2010, the average sales price for coal was $43 per ton. The Company also expects higher level of sales in fiscal year 2010 from the Heat Power group due to an increase in coverage area of the Company's heating operations and an increase in the volume of electricity sold by its electric power operations. The Company's guidance does not include any contribution from future acquisitions by the Company. Management will continue to evaluate its business outlook as necessary and communicate any changes on a quarterly basis or when appropriate.
As previously reported, for the first quarter ended February 28, 2010, the Company generated revenue of $20.8 million, increasing more than three times the $5.0 million reported in the corresponding period of last year. The increase was primarily due to a significant rise in production resulting from a $10 million expansion and improvement program at the LaiYeGou coal mine in Inner Mongolia, PRC completed in the third quarter of 2009, as well as the increase of volume from its coal trading business. Sales from the Coal Group accounted for close to 80% of the total revenue in the first quarter of fiscal year 2010, with the remainder being derived from the Company's Heat Power Group. Net income in the first quarter of fiscal year 2010 totaled approximately $4.0 million, or $0.09 per share.
"We continue to capitalize on the efficiency of our longwall mining equipment which is now fully integrated at our LaiYeGou coal mine," stated WenXiang Ding, chief executive officer and president. "We expect incremental growth in China Energy's revenue and net income through fiscal year 2010 due to our expanded production capacity of approximately 800,000 metric tons per year at our LaiYeGou coal mine and growing demand for coal used in power generation, manufacturing and heating in China. We are also well positioned to expand our production and distribution capabilities through potential acquisition opportunities leveraging the rich coal resources in Inner Mongolia."
About China Energy Corporation
China Energy Corporation produces and processes raw coal for domestic heating, electrical generation and coking purposes for steel production primarily in the People's Republic of China, acts as a brokerage in facilitating coal trade transactions, and provides heat and power locally. The Company produces coal through its subsidiary Inner Mongolia Tehong Coal Group Co, Ltd. ("Coal Group") and supplies heating and electricity requirements throughout the XueJiaWan district through its subsidiary Inner Mongolia Zhunger Heat Power Co., Ltd. ("Heat Power"). Through Heat Power, China Energy operates a thermoelectric plant and 32 heat transfer stations located in XueJiaWan, Ordos City in which the Company has a monopoly for heating supply granted to the Company by the local government. For additional information on China Energy Corporation see http://www.ceccec.com .
Cautionary Statement Regarding Forward-Looking Information
This press release may contain certain "forward-looking statements" relating to the business of China Energy Corporation, and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the impact of the proceeds from the private placement on the Company's short term business and operations,; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to sustain growth; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," "anticipates," "continue," "will" or similar expressions, involve known and unknown risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov)
For more information, please contact: Company: Alex (Yuan) Gong, Chief Financial Officer Tel: +86-10-5203-6900 Email: firstname.lastname@example.org Investor Relations: HC International, Inc. Ted Haberfield, Executive VP Tel: +1-760-755-2716 Email: email@example.com
SOURCE China Energy Corporation