CHNR released interim results of operations for the three and six months ended June 30, 2009
CONTACT
Edward Wong, Chief Financial Officer
011-852-2810-7205 or cfo@chnr.net
FOR IMMEDIATE RELEASE
CHINA NATURAL RESOURCES RELEASES
INTERIM RESULTS OF OPERATIONS
HONG KONG, December 2, 2009 – CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released unaudited interim financial statements for the three and six months ended June 30, 2009 as follows:
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(Amounts in thousands, except share and per share data)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2008 |
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2009 |
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2009 |
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2008 |
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2009 |
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2009 |
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RMB |
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RMB |
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US$ |
|
RMB |
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RMB |
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US$ |
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NET SALES |
29,722 |
|
12,999 |
|
1,903 |
|
38,268 |
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17,563 |
|
2,571 |
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COST OF SALES |
(12,141 |
) |
(12,371 |
) |
(1,811 |
) |
(16,023 |
) |
(16,268 |
) |
(2,381 |
) |
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GROSS PROFIT |
17,581 |
|
628 |
|
92 |
|
22,245 |
|
1,295 |
|
190 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, |
(9,157 |
) |
(12,870 |
) |
(1,884 |
) |
(21,658 |
) |
(26,409 |
) |
(3,867 |
) |
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OPERATING INCOME (LOSS) FROM CONTINUING |
8,424 |
|
(12,242 |
) |
(1,792 |
) |
587 |
|
(25,114 |
) |
(3,677 |
) |
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INTEREST INCOME |
372 |
|
65 |
|
9 |
|
1,121 |
|
421 |
|
61 |
|
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OTHER INCOME, NET |
67 |
|
— |
|
— |
|
48 |
|
529 |
|
78 |
|
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LOSS ATTRIBUTABLE TO INVESTMENT |
(2,306 |
) |
(2,960 |
) |
(433 |
) |
(4,437 |
) |
(5,665 |
) |
(829 |
) |
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INCOME (LOSS) FROM CONTINUING OPERATIONS |
6,557 |
|
(15,137 |
) |
(2,216 |
) |
(2,681 |
) |
(29,829 |
) |
(4,367 |
) |
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INCOME TAXES |
(4,304 |
) |
(714 |
) |
(105 |
) |
(4,941 |
) |
(1,266 |
) |
(185 |
) |
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INCOME (LOSS) FROM CONTINUING OPERATIONS |
2,253 |
|
(15,851 |
) |
(2,321 |
) |
(7,622 |
) |
(31,095 |
) |
(4,552 |
) |
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DISCONTINUED OPERATIONS |
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INCOME (LOSS) FROM DISCONTINUED |
20,207 |
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5 |
|
1 |
|
24,451 |
|
(15,052 |
) |
(2,204 |
) |
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NET INCOME (LOSS) |
22,460 |
|
(15,846 |
) |
(2,320 |
) |
16,829 |
|
(46,147 |
) |
(6,756 |
) |
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OTHER COMPREHENSIVE INCOME (LOSS) |
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Foreign currency translation adjustments |
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Attributable to CHNR Shareholders |
(3,504 |
) |
(60 |
) |
(9 |
) |
(15,753 |
) |
438 |
|
64 |
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Attributable to non-controlling interests |
— |
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— |
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— |
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— |
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— |
|
— |
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COMPREHENSIVE INCOME (LOSS) |
18,956 |
|
(15,906 |
) |
(2,329 |
) |
1,076 |
|
(45,709 |
) |
(6,692 |
) |
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Less comprehensive loss attributable to non-controlling interests |
— |
|
833 |
|
122 |
|
— |
|
7,567 |
|
1,108 |
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COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO |
18,956 |
|
(15,073 |
) |
(2,207 |
) |
1,076 |
|
(38,142 |
) |
(5,584 |
) |
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NET INCOME (LOSS) ATTRIBUTABLE TO: |
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CHNR Shareholders |
22,460 |
|
(15,013 |
) |
(2,198 |
) |
16,829 |
|
(38,580 |
) |
(5,648 |
) |
|
Non-controlling interests |
— |
|
(833 |
) |
(122 |
) |
— |
|
(7,567 |
) |
(1,108 |
) |
|
|
22,460 |
|
(15,846 |
) |
(2,320 |
) |
16,829 |
|
(46,147 |
) |
(6,756 |
) |
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NET INCOME (LOSS) ATTRIBUTABLE TO |
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Continuing operations |
2,253 |
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(15,016 |
) |
(2,198 |
) |
(7,622 |
) |
(29,549 |
) |
(4,326 |
) |
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Discontinued operations |
20,207 |
|
3 |
|
— |
|
24,451 |
|
(9,031 |
) |
(1,322 |
) |
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|
22,460 |
|
(15,013 |
) |
(2,198 |
) |
16,829 |
|
(38,580 |
) |
(5,648 |
) |
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INCOME (LOSS) PER SHARE: |
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Basic |
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Income (loss) from continuing operations |
0.12 |
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(0.71 |
) |
(0.10 |
) |
(0.40 |
) |
(1.42 |
) |
(0.21 |
) |
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Income (loss) from discontinued operations |
1.05 |
|
— |
|
— |
|
1.29 |
|
(0.43 |
) |
(0.06 |
) |
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Net income (loss) per share |
1.17 |
|
(0.71 |
) |
(0.10 |
) |
0.89 |
|
(1.85 |
) |
(0.27 |
) |
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Diluted |
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Income (loss) from continuing operations |
0.10 |
|
(0.71 |
) |
(0.10 |
) |
(0.34 |
) |
(1.42 |
) |
(0.21 |
) |
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Income (loss) from discontinued operations |
0.88 |
|
— |
|
— |
|
1.10 |
|
(0.43 |
) |
(0.06 |
) |
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Net income (loss) per share |
0.98 |
|
(0.71 |
) |
(0.10 |
) |
0.76 |
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(1.85 |
) |
(0.27 |
) |
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WEIGHTED AVERAGE NUMBER OF |
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Basic |
19,323,416 |
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21,123,416 |
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21,123,416 |
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18,982,757 |
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20,883,085 |
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20,883,085 |
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Diluted |
22,926,151 |
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21,123,416 |
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21,123,416 |
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22,235,670 |
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20,883,085 |
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20,883,085 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2009 AND DECEMBER 31, 2008
(Amounts in thousands, except share and per share data)
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December 31, 2008 |
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June 30, 2009 |
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June 30, 2009 |
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RMB |
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RMB |
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US$ |
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(Unaudited) |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash |
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120,888 |
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158,504 |
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23,205 |
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Trade receivables: |
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Related parties |
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70,830 |
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— |
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— |
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Others |
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|
4,157 |
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1,755 |
|
257 |
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Bills receivable |
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|
1,460 |
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— |
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— |
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Note receivable |
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|
96,166 |
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— |
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— |
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Inventories |
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|
66,245 |
|
5,614 |
|
822 |
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Deferred tax assets |
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|
5,470 |
|
966 |
|
141 |
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Other assets |
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|
25,061 |
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42,670 |
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6,247 |
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|
390,277 |
|
209,509 |
|
30,672 |
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ASSETS CLASSIFIED AS HELD FOR SALE |
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— |
|
442,543 |
|
64,790 |
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TOTAL CURRENT ASSETS |
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|
390,277 |
|
652,052 |
|
95,462 |
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INVESTMENT IN UNCONSOLIDATED INVESTEES |
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|
22,210 |
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17,489 |
|
2,560 |
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ADVANCES TO UNCONSOLIDATED INVESTEES, NET |
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|
39,290 |
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38,346 |
|
5,614 |
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PROPERTY AND EQUIPMENT, NET |
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|
238,591 |
|
185,545 |
|
27,164 |
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DEPOSITS FOR BUSINESS ACQUISITIONS AND OTHER |
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|
119,741 |
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48,119 |
|
7,045 |
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TOTAL ASSETS |
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|
810,109 |
|
941,551 |
|
137,845 |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES |
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Bills payable |
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|
— |
|
10,000 |
|
1,464 |
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Accounts payable |
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|
7,361 |
|
17,100 |
|
2,504 |
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Advance from customers |
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|
15,261 |
|
2,781 |
|
407 |
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Accrued liabilities |
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|
8,014 |
|
3,001 |
|
439 |
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Income tax and other taxes payable |
|
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|
12,368 |
|
1,192 |
|
175 |
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Other payables |
|
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|
25,485 |
|
26,933 |
|
3,943 |
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Current portion of related party capital lease obligation |
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|
9,977 |
|
— |
|
— |
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Related party payable |
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|
18,316 |
|
168,396 |
|
24,654 |
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|
|
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|
96,782 |
|
229,403 |
|
33,586 |
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LIABILITIES ASSOCIATED WITH ASSETS CLASSIFIED |
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|
— |
|
107,174 |
|
15,690 |
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TOTAL CURRENT LIABILITIES |
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|
96,782 |
|
336,577 |
|
49,276 |
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NON CURRENT LIABILITIES |
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Related party capital lease obligation, net of current portion |
|
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|
10,780 |
|
— |
|
— |
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Long term loan |
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|
— |
|
100,000 |
|
14,640 |
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Other payables |
|
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|
10,087 |
|
82,612 |
|
12,095 |
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TOTAL NON-CURRENT LIABILITIES |
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|
20,867 |
|
182,612 |
|
26,735 |
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TOTAL LIABILITIES |
|
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|
117,649 |
|
519,189 |
|
76,011 |
|
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EQUITY |
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China Natural Resources, Inc. equity: |
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Preferred shares, no par: |
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Authorized - 10,000,000 shares; |
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— |
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— |
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— |
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Common shares, no par: |
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Authorized - 200,000,000 shares; |
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Issued and outstanding – 19,623,416 and 21,123,416 shares |
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|
312,081 |
|
312,081 |
|
45,689 |
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Reserves |
|
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|
7,331 |
|
7,331 |
|
1,073 |
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Additional paid-in capital |
|
|
|
228,752 |
|
288,159 |
|
42,187 |
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Excess of purchase price over net asset value |
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|
(7,149 |
) |
(313,139 |
) |
(45,844 |
) |
|
Retained earnings |
|
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|
173,087 |
|
134,507 |
|
19,692 |
|
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Other comprehensive loss |
|
|
|
(35,561 |
) |
(35,123 |
) |
(5,142 |
) |
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TOTAL CHINA NATURAL RESOURCES, INC. EQUITY |
|
|
|
678,541 |
|
393,816 |
|
57,655 |
|
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NON-CONTROLLING INTERESTS |
|
|
|
13,919 |
|
28,546 |
|
4,179 |
|
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TOTAL LIABILITIES AND EQUITY |
|
|
|
810,109 |
|
941,551 |
|
137,845 |
|
2
Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2009 interim results "the first half of 2009 posted a challenge to the operation of China Natural Resources. The global financial crisis caused the PRC economy to slow down sharply. Base metal prices fell in general as compared to the first half of 2008 amid slowing industrial production. However, China is expected to recover at a faster pace than other countries, and our mining operations are poised to benefit from the mainland's growth prospects and supportive policies. The China economy grew 7.9% year on year in the second quarter which suggests that the China economy is expanding and steel demand from downstream customers is recovering. We expect ore prices to rise in 2010 as demand for steel recovers and a rebound in industrial production growth. We remain committed to our strategy in expanding our coal and base metal resources in the PRC.”
For the convenience of the reader, amounts in Renminbi (“RMB”) have been translated into United States dollars (“US$”) at the applicable rate of US$1.00 = RMB6.8305 as quoted by Bloomberg Finance L.P. as of June 30, 2009. The Renminbi is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.
The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) have been prepared in accordance with generally accepted accounting principles in the United States but omit certain financial statements and note disclosure that would be included in full financial statements prepared in accordance with US GAAP. The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) are derived from, and should be read in conjunction with, the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2009 and 2008, which was filed with the Securities and Exchange Commission on December 2, 2009 under cover of Form 6-K. The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2009.
About China Natural Resources, Inc.
China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People's Republic of China, is currently engaged in (a) the acquisition and exploitation of mining rights, including the exploration, mineral extraction, processing and sale of iron, zinc and other nonferrous metals, extracted or produced at mines primarily located in Anhui Province in the PRC, and (b) the acquisition, exploration, development and production of coal resources in Guizhou province in the PRC.
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.
3