CHNR released results of operations for the year ended December 31, 2008
CONTACT
Edward Wong, Chief Financial officer
011-852-2810-7205 or cfo@chnr.net
FOR IMMEDIATE RELEASE
CHINA NATURAL RESOURCES RELEASES
2008 ANNUAL RESULTS OF OPERATIONS
HONG KONG, June 29, 2008 – CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released results of operations for the year ended December 31, 2008 (derived from the Company’s audited financial statements) as follows.
CHINA NATURAL RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(Amounts in thousands, except share and per share data)
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Year Ended December 31, |
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2006 |
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2007 |
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2008 |
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2008 |
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RMB |
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RMB |
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RMB |
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US$ |
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NET SALES |
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Related parties |
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— |
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— |
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379,114 |
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55,526 |
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Others |
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145,389 |
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125,963 |
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466,970 |
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68,394 |
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145,389 |
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125,963 |
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846,084 |
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123,920 |
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COST OF SALES |
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Related parties |
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— |
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— |
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(363,938 |
) |
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(53,303 |
) |
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Others |
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(36,787 |
) |
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(38,541 |
) |
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(426,920 |
) |
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(62,528 |
) |
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|
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(36,787 |
) |
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(38,541 |
) |
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(790,858 |
) |
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(115,831 |
) |
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GROSS PROFIT |
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108,602 |
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87,422 |
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55,226 |
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8,089 |
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SELLING, GENERAL AND |
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ADMINISTRATIVE EXPENSES, |
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(14,170 |
) |
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(52,499 |
) |
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(78,712 |
) |
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(11,530 |
) |
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INCOME (LOSS) FROM OPERATIONS |
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94,432 |
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34,923 |
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(23,486 |
) |
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(3,441 |
) |
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OTHER INCOME (EXPENSE) |
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Interest income |
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904 |
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4,520 |
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4,265 |
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|
625 |
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Interest expense, related party |
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— |
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— |
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(1,835 |
) |
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(269 |
) |
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Loss attributable to investment |
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in unconsolidated investees |
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— |
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(2,145 |
) |
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(9,691 |
) |
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(1,419 |
) |
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Net gain on derivative assets |
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— |
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— |
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25,834 |
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3,784 |
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Gain on sale of investment in subsidiary |
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— |
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— |
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78,877 |
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11,553 |
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Other |
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4,929 |
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(512 |
) |
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10,465 |
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1,532 |
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|
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5,833 |
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1,863 |
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107,915 |
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15,806 |
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INCOME FROM CONTINUING |
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100,265 |
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36,786 |
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84,429 |
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12,365 |
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INCOME TAX EXPENSE |
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(15,157 |
) |
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(12,051 |
) |
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(8,402 |
) |
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(1,231 |
) |
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INCOME FROM CONTINUING |
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85,108 |
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24,735 |
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76,027 |
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11,134 |
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DISCONTINUED OPERATIONS |
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Loss from discontinued advertising and |
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(659 |
) |
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— |
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— |
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— |
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Loss on disposal of discontinued operations, |
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(11,901 |
) |
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— |
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— |
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— |
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LOSS FROM DISCONTINUED OPERATIONS |
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(12,560 |
) |
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— |
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— |
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— |
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NET INCOME |
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72,548 |
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24,735 |
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76,027 |
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11,134 |
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NET INCOME (LOSS) PER SHARE: |
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Basic |
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Income from continuing operations |
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7.46 |
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1.86 |
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3.94 |
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0.58 |
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Loss from discontinued operations |
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(1.10 |
) |
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— |
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— |
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— |
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Net income per share |
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6.36 |
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1.86 |
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3.94 |
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0.58 |
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NET INCOME (LOSS) PER SHARE: |
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Diluted |
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Income from continuing operations |
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6.17 |
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1.43 |
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3.41 |
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0.50 |
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Loss from discontinued operations |
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(0.91 |
) |
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— |
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— |
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— |
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Net income per share |
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5.26 |
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1.43 |
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3.41 |
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0.50 |
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WEIGHTED AVERAGE NUMBER OF |
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Basic |
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11,402,372 |
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13,290,471 |
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19,276,019 |
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19,276,019 |
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Diluted |
|
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13,798,731 |
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17,347,024 |
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22,278,600 |
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22,278,600 |
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CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND 2008
(Amounts in thousands, except share data)
ASSETS
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December 31, |
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|||||||
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2007 |
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2008 |
|
2008 |
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|||
|
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|
|
RMB |
|
RMB |
|
US$ |
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|||
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CURRENT ASSETS |
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Cash |
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483,689 |
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120,888 |
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17,706 |
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Trade receivables: |
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|
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|
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Related parties |
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|
— |
|
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70,830 |
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|
10,374 |
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Others |
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1,525 |
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4,157 |
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|
609 |
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Bills receivable |
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13,000 |
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1,460 |
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214 |
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Inventories |
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4,633 |
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66,245 |
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9,702 |
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Note receivable |
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96,166 |
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14,085 |
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Deferred tax assets |
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— |
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4,425 |
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|
648 |
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Other assets |
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10,967 |
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25,061 |
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3,670 |
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TOTAL CURRENT ASSETS |
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513,814 |
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|
389,232 |
|
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57,008 |
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Property and equipment, net |
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37,772 |
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242,463 |
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35,512 |
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Deposits for business acquisitions and other |
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— |
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119,741 |
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17,537 |
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Investment in unconsolidated investees |
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30,495 |
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22,210 |
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|
3,253 |
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Advances to unconsolidated investee, net |
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— |
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|
39,290 |
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|
5,754 |
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TOTAL ASSETS |
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582,081 |
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812,936 |
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119,064 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
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December 31, |
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2007 |
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2008 |
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2008 |
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Notes |
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RMB |
|
RMB |
|
US$ |
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|||
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CURRENT LIABILITIES |
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Accounts payable |
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|
991 |
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7,361 |
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1,078 |
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Other payables |
|
8 |
|
|
24,355 |
|
|
25,484 |
|
|
3,732 |
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Advances from customers |
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|
|
2,169 |
|
|
15,261 |
|
|
2,235 |
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Accrued liabilities |
|
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|
|
3,367 |
|
|
8,014 |
|
|
1,174 |
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Related party payables |
|
11 |
|
|
2,221 |
|
|
18,316 |
|
|
2,683 |
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Income tax and other taxes payable |
|
10 |
|
|
5,593 |
|
|
11,341 |
|
|
1,661 |
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Current portion of related party capital lease obligation |
|
11 |
|
|
— |
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|
9,977 |
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|
1,461 |
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TOTAL CURRENT LIABILITIES |
|
|
|
|
38,696 |
|
|
95,754 |
|
|
14,024 |
|
|
|
|
|
|
|
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|
|
|
|
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Related party capital lease obligation, net of current portion |
|
11 |
|
|
— |
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|
10,780 |
|
|
1,579 |
|
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Other payables |
|
8 |
|
|
8,312 |
|
|
10,087 |
|
|
1,477 |
|
|
|
|
|
|
|
8,312 |
|
|
20,867 |
|
|
3,056 |
|
|
|
|
|
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TOTAL LIABILITIES |
|
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|
|
47,008 |
|
|
116,621 |
|
|
17,080 |
|
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|
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|
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|
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|
|
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MINORITY INTEREST |
|
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— |
|
|
13,919 |
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|
2,039 |
|
|
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|
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SHAREHOLDERS’ EQUITY |
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Preferred Shares, no par; |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
Common shares, no par: |
|
|
|
|
312,081 |
|
|
312,081 |
|
|
45,708 |
|
|
Reserves |
|
|
|
|
7,331 |
|
|
7,331 |
|
|
1,074 |
|
|
Additional paid in capital |
|
|
|
|
127,707 |
|
|
228,752 |
|
|
33,503 |
|
|
Retained earnings |
|
|
|
|
100,915 |
|
|
176,942 |
|
|
25,915 |
|
|
Excess of Mark Faith purchase price over net asset value |
|
3 |
|
|
— |
|
|
(7,149 |
) |
|
(1,047 |
) |
|
Other comprehensive loss |
|
|
|
|
(12,961 |
) |
|
(35,561 |
) |
|
(5,208 |
) |
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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TOTAL SHAREHOLDERS’ EQUITY |
|
|
|
|
535,073 |
|
|
682,396 |
|
|
99,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
582,081 |
|
|
812,936 |
|
|
119,064 |
|
The consolidated statements of operations for the years ended December 31, 2006, 2007 and 2008 and the consolidated balance sheets as of December 31, 2007 and 2008 have been prepared in accordance with generally accepted accounting principles in the United States, are derived from, and should be read in conjunction with, the Company’s consolidated financial statements for the years ended December 31, 2006, 2007 and 2008, as filed with the Securities and Exchange Commission on June 29, 2008 under cover of Form 20-F.
For the convenience of the reader, amounts in Renminbi (“RMB”) have been translated into United States dollars (“US$”) at the rate of US$1.00=RMB6.8277 quoted by Bloomberg Finance L.P. on December 31, 2008. The RMB is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.
Mr. Li Feilie, the Company's Chairman, commented on the results: "China Natural Resources recorded total sales revenue of RMB846.1 million (US$123.9 million) in 2008, a surge of 571.7% from a year earlier. This represents principally the contribution from our copper smelting business. The Company achieved net income of RMB76.0 million (US$11.1 million) in 2008, representing an increase of over 200% from a year earlier. This was attributable to the disposition of a 40% equity interest in our copper smelting business. The disposition was made to strengthen the Company’s working capital so that the Company is better able to focus on the development of its upstream coal and nonferrous metal businesses. In January 2009, we completed the acquisition of a 70% interest of a coal mining asset in Guizhou Province, the PRC. The operating environment for 2009 will remain difficult. Although market conditions are weak, there are signs of recovery in the PRC economy as the PRC government’s economic stimulus package, introduced in November 2008, is starting to bear fruit. Despite the continuing impact of the global financial crisis, we will continue our strategy of acquiring coal resources and non-ferrous/ iron metal assets."
This press release includes forward-looking statements within the meaning of federal securities laws. These forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People’s Republic of China, risks and hazards associated with the Company’s mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company’s reliance on third-party contractors and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Although the Company’s management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate.