SRRY .35 2009 Third Quarter Results - Ninth Consecutive Profitable Quarter
2009 Third Quarter Results - Ninth Consecutive ProfitableQuarter
Sancon Resources Recovery Announces Profitable 2009 Third Quarter Results - Ninth Consecutive Profitable Quarter
Nov. 16, 2009 (Business Wire) -- Sancon Resources Recovery, Inc. (OTCBB:SRRY) (or “Sancon”), a rapidly growing environmental services and waste recycling company with operations in both China and Australia, announced today results for its 2009 third quarter ended September 30, 2009.
Results of Operations - Comparison between the three months ended September 30, 2009 and the same periods in 2008
The Company generated revenue of $2.81 million in the 2009 third quarter, representing $190,880 or 6% decrease compared to $3 million in the 2008 third quarter. Revenue from China operation decreased $122,122 or 5% from $2.31 million in 2008 third quarter to $2.19 million in 2009 third quarter. Our China operation has maintained its quarterly sales performance similar to 2008 despite the challenging economic environment. Decrease in revenue from Australia operation has narrowed to $68,758 or 10% from $691,679 in 2008 third quarter to $622,921 in 2009 third quarter to reflect the improving economic activities in Australia. Sancon expects Australian operation will continue to improve in the coming quarters.
Gross profit decreased $569,675 or 32% to $1.19 million in the third quarter 2009 from $1.76 million in the third quarter 2008. Gross profit of China operation decreased $610,084 or 42% from $1.45 million in 2008 third quarter to $840,000 in 2009 third quarter. However, gross profit of the Australia operation increased by $55,409 or 18% from $301,664 in 2008 third quarter to $357,073 in 2009 third quarter. Gross margin decreased from 59% in the 2008 third quarter to 42% in the 2009 third quarter.
Net income for 2009 third quarter was $0.5 million, or $0.02 per share, compared to $0.46 million, or $0.01 per share one year ago. Although the sales and gross profit decreased in the third quarter 2009, the significant reduction in SG&A expenses in our China operation lead to the increase in net income. The company continues to strengthen its balance sheet position with $3.3 million cash balance.
Results of Operations - Comparison between the nine months ended September 30, 2009 and the same period in 2008
The revenue for the nine months period ended September 30, 2009 was $8.15 million, representing $154,361 or 2% increase compared to the revenue of $8 million in the same period of 2008. Revenue from China operation increased $646,661 or 11% from $5.96 million for the nine months period ended September 30, 2008 to $6.61 million for the same period in 2009. In the year of 2008, revenue from our Australia operation decreased by $492,300 or 24% from $2.03 million for the nine months period ended September 30, 2008 to $1.54 million for the same period in 2009. That is mainly due to the economic problems in Australia.
Gross profit decreased $0.73 million or 16% to $3.93 million for the nine months period ended September 30, 2009 from $4.65 million in the same period of 2008. The decrease of the gross profit is mainly due to the significant increase in cost of sales from the China operation. All these costs were related to our market expansion programs and the change of shipping mode required by the customers. Gross margin decreased from 58% for the nine months period ended September 30, 2008 to 48% for the nine months period ended September 30, 2009.
Net income for the nine months period ended September 30, 2009 was $1.61 million, or $0.07 per share, compared to $1.45 million, or $0.07 per share in the year ago period, an increase of $164,131 or 11%. In order to control the cost, the company has eliminated numerous outsourced services and consulting fees. This contributed greatly to the increase of net income for the nine months period ended September 30, 2009
“In spite of the slight decrease in revenue and gross profit in 2009 third quarter, our net income continues to increase. Our Australia and China operation are both emerging out of the global economic crisis with more efficiency. We are very pleased to achieve the ninth consecutive quarter of profitability and achieving a year on year growth at the same time,” said Jack Chen, Sancon’s Chief Executive Officer. “We have recently concluded a preliminary memorandum of understanding with an electronic waste processing company in Hunan, China. Relying on this company's R&D team, the MoU also include building China's largest waste battery recycling site on a 10-hectare land. In Australia, we have founded the Algal Fuels Consortium together with Government of South Australia, South Australian Research & Development Institute (SARDI), Flinders University, Commonwealth Scientific Industrial Research Organization (CSIRO), and Flinders Partners. The consortium is finalizing a technology for generating biomass from Captured CO2 emissions. Sancon has the right to commercialize this renewable energy technology in Australia and China. We believe these strategic initiatives will position us favorably into 2010 and beyond.”
About Sancon Resources Recovery Inc.
