Longwei Petroleum Reports July and August 2012 Revenues Up 11.1% Year-Over-Year to $88.6 Million
TAIYUAN CITY, China, Oct. 1, 2012 /PRNewswire-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 July and August 2012 were up 11.1% year-over-year to $88.6 million.
For the two-month period ended August 31, 2012, Longwei reported its product sales volume increased 17.9% year-over-year to 74,908 metric tons ("mt") compared to 63,512mt for the two-month period ended August 31, 2011. On a quarter-over-quarter basis, product sales volume increased 6.1% for the first two-month period of the quarter ended September 30, 2012 compared to the first two-month period of the quarter ended June 30, 2012.
"We are pleased to see an up-tick on our sales volume based on the demand growth at our Taiyuan and Gujiao facilities," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "This increase, combined with our closing on the Huajie facility, positions us for strong growth in fiscal 2013."
During the year-over-year period the retail price of gasoline was adjusted seven times by the National Development and Reform Commission ("NDRC"), the PRC's top economic planning organization, to account for fluctuations in the price of international crude oil. Over this time frame, the retail price of gasoline in the PRC was adjusted upward three times and downward four times for different durations of time. The Company's overall sales price per metric ton has gone down approximately 5.2% year-over-year due to the longer periods at lower prices from $1,196mt to $1,134/mt. Since June 30, 2012, the retail price of gasoline was adjusted down in July, but increased in August and most recently on September 10, 2012. The net effect has been an overall retail price increase in gasoline of 5.7% since June 30, 2012. The Company expects to realize the higher average prices in September and in its second quarter ended December 31, 2012.
Longwei recently announced that it finalized the US $110.6 million purchase of the assets of Huajie Petroleum Co., Ltd. ("Huajie"), a fuel storage depot in northern Shanxi Province with a 100,000-metric-ton storage capacity.
"The Huajie facility nearly doubles our storage capacity to a total of 220,000 metric tons and extends our reach into the fast growing industrial area of northern Shanxi Province," stated Mr. Cai. "Our strong cash flow allowed us to close on the Huajie asset purchase using our own resources without dilution to our shareholders."