BB's Stock Haven

[was hotlinktuna]

Back in CHGY $2.93 +.18 here on big earnings:

China Energy Corp. Reports Financial Results for Fourth Quarter and 2009 Fiscal Year
- Fourth quarter 2009 revenue up approximately 300% to $21.9 million; net income $6.6 million
- Fiscal-year 2009 revenue up 110% to $41.7 million; net income $5.1 million
- Fiscal-year 2009 cash flow from operations of $13.2 million
- Mine expansion and improvement program completed in August 2009 contributed to Q4 2009 gains and will contribute to 2010 growth


Buzz up! 0 Print..Companies:CHINA ENERGY CORPTopics:Earnings.Related Quotes
Symbol Price Change
CHGY.OB 2.95 +0.20


{"s" : "chgy.ob","k" : "c10,l10,p20,t10","o" : "","j" : ""} Press Release Source: China Energy Corporation On Monday March 29, 2010, 7:00 am EDT
HOHHOT CITY, Inner Mongolia, China, March 29 /PRNewswire-Asia-FirstCall/ -- China Energy Corporation (OTC Bulletin Board:CHGY.ob - News), ("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, announced financial results for the fourth quarter and fiscal year 2009.

Fourth quarter revenues totaled $21.9 million, an increase of approximately 300% over revenues of $5.5 million in the same period in fiscal year 2008. The increase was due primarily to a $10 million expansion and improvement program at the LaiYeGou coal mine in Inner Mongolia, PRC. The program was completed in August 2009 and included the installation of more efficient "longwall" mining equipment, which increases the amount of recoverable coal from 40% previously to as much as 80% and significantly increases the utilization efficiency of the Company's coal reserves. China Energy produced approximately 295,000 metric tons of coal, compared to 136,000 metric tons in the third quarter of fiscal year 2009. Average pricing was $39 per ton during the fourth quarter of fiscal 2009. Today China Energy has the capacity to produce up to 800,000 metric tons annually, which is more than 2008 and 2009 combined. Net income for the fourth quarter of fiscal year 2009 was $6.6 million, or $0.15 per diluted share, compared to $4.2 million, or $0.09 per diluted share, in the fourth quarter of fiscal year 2008.

Fiscal Year 2009 Financial Results

For the year ended November 30, 2009, the Company reported revenue of $41.7 million, an increase of 110% over revenue of $19.9 million generated in 2008. For the fiscal year, sales from the Company's coal group increased 148% to $32 million, or 77% of total sales, compared to $12.9 million, or 65% of total sales in fiscal year 2008. As a component of this, 36% of total company sales came from coal trading, and 41% came from coal production during fiscal year 2009. Average sales price of coal during fiscal year 2009 was $37 per ton, compared to $33 per ton in fiscal year 2008.

Sales of the heat power group totaled $9.7 million, or $23% of total sales, in fiscal year 2009, compared to $7.0 million, or 35% of total sales in fiscal year 2008. The higher level of sales from the heat power group was attributed to an increase of over 50% in the coverage area of the Company's heat power operations, and a 31% increase in volume of electricity sold by its electric power operations.

"China Energy is well positioned to benefit from the growing demand and increasing price for coal used in heating, power generation and manufacturing, as a result of the rapid growth in the Chinese economy," stated WenXiang Ding, chief executive officer and president. "With our expanded production capacity at our LaiYeGou coal mine, coupled with our stable and growing thermoelectric heating and coal brokerage businesses, we expect to generate significant top and bottom line growth for 2010. We will consider acquisition opportunities to expand our production and distribution capabilities, and are well positioned to leverage our seasoned management team if industry consolidation commences in Inner Mongolia."

Cost of goods sold for fiscal year 2009 was approximately $29.4 million, compared to approximately $14.0 million for fiscal year 2008. Gross profit was $12.3 million and gross margins were 29.5% in 2009, compared to $5.9 million in gross profit and gross margins of 29.6% during 2008.

Operating expenses for fiscal year 2009 were approximately $5.5 million, or 13.2% of revenue, compared to $2.7 million, or 13.6% of revenue in 2008. Selling and marketing expenses in fiscal year 2009 were $2.2 million compared to $0.4 million in 2008, and general and administration expenses totaled $3.3 million and $2.3 million in the respective periods. The increase in selling and marketing expenses in fiscal year 2009 was attributable in large part to the inclusion of $1.4 million in transportation and storage expenses incurred in the Company's proprietary coal trading business. These expenses were first incurred in fiscal year 2009 because that was the first full year of the coal trading business.

Net income for fiscal year 2009 totaled approximately $5.1 million, or $0.11 per diluted, share, compared to approximately $4.0 million, or $0.09 per diluted share, in fiscal year 2008. Net income margins were 12.2% and 20.1% for fiscal years 2009 and 2008, respectively. Contributing to the decline in net margin was a reduction in government subsidies from $3.0 million in 2008 to $1.6 million in 2009. The amount recorded for the 2008 subsidy was artificially high due to the inclusion of a portion of the Company's 2007 subsidy in fiscal year 2008.

Balance Sheet and Cash Flow

Cash and cash equivalents and restricted cash totaled $5.2 million on November 30, 2009 compared to $0.6 million on November 30, 2008. The Company had total stockholders' equity of $33.2 million, with total assets of $86.6 million versus total liabilities of $53.4 million on November 30, 2009. For fiscal year 2009, the Company generated $13.2 million in cash from operations versus $4.4 million in fiscal year 2008.

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, and acts as a brokerage in facilitating coal trade transactions. 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 21 heat transfer stations located in XueJiaWan, Ordos City, and is the sole company in that area granted the right by the local government to provide heating supply to its end-users. 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" 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)


Contacts: Company: Alex (Yuan) Gong, Chief Financial Officer Tel: [phone] Email: [e-mail] Investor Relations: HC International, Inc. Ted Haberfield, Executive VP Tel: [phone] Email: [e-mail]

More to the report...tuna