Longwei (LPH) Boosts FY13 Outlook; Cites Improved Market Share, Throughput
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Longwei Petroleum Investment Holding Ltd. (AMEX: LPH) has raised its full-year guidance for the fiscal year ending June 30, 2013 ("FY13").
Longwei now forecasts FY13 revenue to increase 30.7% year-over-year to $667.3 million, versus prior forecasts of $646.3 million. Longwei also projects net income, adjusted for the warrant derivative liability, to increase approximately 23.0% year-over-year to $80.1 million, versus the prior forecast of $77.6 million. The growth is primarily driven by the better-than-expected ramp-up of the new Huajie facility. Longwei now expects revenue contribution from the Huajie facility of $121.0 million in FY13, up 21.0% from the prior forecast of $100.0 million. The guidance does not account for any potential external financing for inventory, which could accelerate growth.
"The Huajie facility has captured significant market share in its region during its first three months of operations, leading to better-than-expected throughput. This, combined with continued organic growth of the Taiyuan and Gujiao facilities, positions us well for strong growth in FY13," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We expect strong quarterly top-line and bottom-line results for the period ended December 31, 2012."
With the addition of the Huajie facility, the Company's total storage capacity has increased to 220,000 metric tons ("mt"). Longwei's storage capacity is reported in metric tons based on the mass or weight of the product converted to volume storage based on the density of the product stored in its tanks, which consists of both above and below ground storage. The volume storage capacity measurement is calculated in accordance with industry standards. The tank inventory has been continuously audited under U.S. GAAP procedures by a U.S.-based, PCAOB-registered public accounting firm for the past six years.
For the two months ended November 30, 2012, Longwei reported its revenue from product sales increased 35.0% to $107.5 million, compared to $79.6 million for the two months ended November 30, 2011. Longwei's product sales volume increased 26.1% for this two-month period year-over-year to 86,128mt, compared to 68,310mt for the two-month period ended November 30, 2011. The increase in revenues was primarily attributable to the increase in the average sales price of petroleum between the periods and the volume growth of the new Huajie facility.
Longwei recently reported revenues of US $133.4 million and non-GAAP net income of $18.3 million or $0.18 per share, adjusted for the non-cash warrant derivative liability charge, for the first fiscal quarter ended September 30, 2012. The Company's product sales volume increased 17.8% year-over-year to 110,587mt during the quarter. As of September 30, 2012, the Company reported total assets of US $360.0 million and book value per share of $3.47. The Company closed on the Huajie asset purchase on September 26, 2012.
The Company's PRC wholly-owned operating subsidiary, Taiyuan Longwei Economy & Trading Co., was one of 15 companies in Taiyuan City and one of only 140 companies in Shanxi Province recognized on February 15, 2012 as a "Provincial Honorable and Credible Enterprise" for 2010. The Company received the award from the Shanxi Administration for Industry and Commerce based on Longwei's reputation as a company that honors its contractual obligations and maintains its credibility with customers. "We have worked hard to build a good reputation for the Company over our 17-year operating history. We believe our performance has earned us the trust of our customers and our shareholders, and we will vigorously defend our reputation," stated Mr. Cai.
Longwei now forecasts FY13 revenue to increase 30.7% year-over-year to $667.3 million, versus prior forecasts of $646.3 million. Longwei also projects net income, adjusted for the warrant derivative liability, to increase approximately 23.0% year-over-year to $80.1 million, versus the prior forecast of $77.6 million. The growth is primarily driven by the better-than-expected ramp-up of the new Huajie facility. Longwei now expects revenue contribution from the Huajie facility of $121.0 million in FY13, up 21.0% from the prior forecast of $100.0 million. The guidance does not account for any potential external financing for inventory, which could accelerate growth.
"The Huajie facility has captured significant market share in its region during its first three months of operations, leading to better-than-expected throughput. This, combined with continued organic growth of the Taiyuan and Gujiao facilities, positions us well for strong growth in FY13," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We expect strong quarterly top-line and bottom-line results for the period ended December 31, 2012."
With the addition of the Huajie facility, the Company's total storage capacity has increased to 220,000 metric tons ("mt"). Longwei's storage capacity is reported in metric tons based on the mass or weight of the product converted to volume storage based on the density of the product stored in its tanks, which consists of both above and below ground storage. The volume storage capacity measurement is calculated in accordance with industry standards. The tank inventory has been continuously audited under U.S. GAAP procedures by a U.S.-based, PCAOB-registered public accounting firm for the past six years.
For the two months ended November 30, 2012, Longwei reported its revenue from product sales increased 35.0% to $107.5 million, compared to $79.6 million for the two months ended November 30, 2011. Longwei's product sales volume increased 26.1% for this two-month period year-over-year to 86,128mt, compared to 68,310mt for the two-month period ended November 30, 2011. The increase in revenues was primarily attributable to the increase in the average sales price of petroleum between the periods and the volume growth of the new Huajie facility.
Longwei recently reported revenues of US $133.4 million and non-GAAP net income of $18.3 million or $0.18 per share, adjusted for the non-cash warrant derivative liability charge, for the first fiscal quarter ended September 30, 2012. The Company's product sales volume increased 17.8% year-over-year to 110,587mt during the quarter. As of September 30, 2012, the Company reported total assets of US $360.0 million and book value per share of $3.47. The Company closed on the Huajie asset purchase on September 26, 2012.
The Company's PRC wholly-owned operating subsidiary, Taiyuan Longwei Economy & Trading Co., was one of 15 companies in Taiyuan City and one of only 140 companies in Shanxi Province recognized on February 15, 2012 as a "Provincial Honorable and Credible Enterprise" for 2010. The Company received the award from the Shanxi Administration for Industry and Commerce based on Longwei's reputation as a company that honors its contractual obligations and maintains its credibility with customers. "We have worked hard to build a good reputation for the Company over our 17-year operating history. We believe our performance has earned us the trust of our customers and our shareholders, and we will vigorously defend our reputation," stated Mr. Cai.
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