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Qiao Xing Universal Resources, Inc. (XING) Reports First Quarter 2010 Financial Results

HUIZHOU, China — Qiao Xing Universal Resources, Inc. (Nasdaq: XING) (“the Company” or “XING”), an emerging Chinese resources company headquartered in Huizhou, Guangdong Province, today announced its unaudited results for the three months ended March 31, 2010.

    First Quarter Highlights
    -- The Company reported net income of RMB73.0 million (US$10.7 million),
       or RMB0.81 (US$0.12) per basic share, compared to a net loss of RMB21.5
       million or RMB0.69 per basic share in the first quarter of 2009.

    -- Net sales were RMB195.4 million (US$28.6 million) compared to RMB460.8
       million in the first quarter of 2009.

    -- Gross profit was RMB27.4 million (US$4.0 million) compared to RMB82.3
       million in the first quarter of 2009. Gross margin was 14.1% compared
       to 17.9% in the first quarter of 2009.

    Financial Review of Operations for the Molybdenum Mine Business
    -- Consolidated revenue from the mining business for the first quarter of
       2010 totaled RMB58.0 million (US$8.5 million). Gross profit was RMB26.5
       million (US$3.9 million), resulting in gross margin of 45.7%. Net
       income totaled RMB17.9 million (US$2.6 million) in the first quarter of
       2010, a decrease of 47.3% from the fourth quarter of 2009, primarily
       due to seasonal factors related to the long Chinese New Year holiday
       in February 2010, when most mining businesses in North China shut down

    -- Molybdenum concentrate production in the first quarter of 2010 was
       620.3 tons, equivalent to 298.1 tons (0.66 million pounds) of
       molybdenum metal.

    -- Average cost of sales per ton of molybdenum metal produced in the first
       quarter of 2010 was RMB105,647 (US$15,478), or RMB47.91 (US$7.02) per
       pound. Average cash cost of sales per ton of molybdenum metal produced
       in the first quarter of 2010 was RMB66,004 (US$9,670), or RMB29.93
       (US$4.38) per pound  (The Company produces molybdenum concentrate and
       does not engage in smelting operations, so the cash cost does not
       include the cost of smelting.)

    -- Capital expenditures for the mining business in the first quarter of
       2010 totaled RMB33.6 million (US$4.9 million). These capital
       expenditures were all used for the construction of the mine.

Financial Conditions

As of March 31, 2010, XING and its subsidiary held $554.4 million in cash and cash equivalents and $515.9 million in working capital. Shareholders’ equity was $643.3 million as of March 31, 2010.

Upcoming Events

The Company is close to coming up with a proposal on sorting out its relationship with its subsidiary Qiao Xing Mobile Communication Co., Ltd. (NYSE: QXM) and expects to announce the proposal once it is approved by the Board of Directors.

The Company will release its earnings results for the second quarter and six months ended June 30, 2010 by September 15. The Company expects that earnings from its mining business in the second quarter will be better than the first quarter.

                             FINANCIAL TABLES FOLLOW

               Qiao Xing Universal Resources Inc. and its Subsidiaries
                   Condensed Consolidated Profit and Loss Account
                          For three months ended March 31

                                               2009              2010
                                              RMB'000     RMB'000     US$'000

     Net sales                                460,756     195,427      28,631
     Cost of goods sold                      (378,498)   (167,978)    (24,609)
           Gross profit                        82,258      27,449       4,021
        Total operating expenses              (42,037)    (42,373)     (6,208)
           Income from operation               40,221     (14,924)     (2,186)
        Net non-operating income (loss)       (38,280)     90,520      13,261
           Income before income tax             1,941      75,596      11,075
     Provision for income tax                 (12,665)     (7,993)     (1,171)
           Net income from continuing
            operations, net of tax            (10,724)     67,603       9,904
     Discontinued operations, net of tax       (7,984)         --          --
           Net income (loss) for the
            period                            (18,708)     67,603       9,904
     Net loss (income) attributable to the
      noncontrolling interest                  (2,800)      5,374         787
           Net income (loss) after
            attribution of the
            noncontrolling interest           (21,508)     72,977      10,691
     To participatory convertible notes            --      (1,605)       (235)
     To common stock                          (21,508)     71,372      10,456
     Basic earnings (loss) per common
           Before extraordinary gain            (0.69)       0.81        0.12
           Extraordinary gain                      --          --          --
           After extraordinary gain             (0.69)       0.81        0.12
     Weighted average number of shares
           Basic                           30,948,836  87,725,193  87,725,193

               Qiao Xing Universal Resources Inc. and its Subsidiaries
                        Condensed Consolidated Balance Sheet

                                           December 31,        March 31,
                                               2009              2010
                                             RMB'000      RMB'000     US$'000
        Cash and cash equivalents           3,709,503    3,784,205    554,397
        Restricted cash                       251,720      204,090     29,900
        Bills receivable                           --       24,000      3,516
        Accounts receivable, net              123,082      208,801     30,590
        Inventories                            98,012      156,174     22,880
        Prepaid expenses                      184,339      165,191     24,201
        Other current assets                   37,025       39,061      5,723
        Due from related parties                   25        1,136        166
        Deferred income taxes                  15,942       13,089      1,918
        Deferred debt issuance costs, net          --           --         --
        Assets held for sale                  163,000          548         80
        Due from discontinued operations      200,000      200,000     29,301
          TOTAL CURRENT ASSETS              4,782,648    4,796,294    702,671
        Property, machinery and
         equipment, net                       170,485      226,460     33,177
        Proven and probable reserves          712,121      705,059    103,293
        Construction-in-progress               86,591       37,231      5,454
        Investment at cost                      5,000        5,000        733
        Goodwill                               82,058       82,058     12,022
        Value beyond proven and probable
         reserves                              67,295       67,295      9,859
        Other acquired intangible assets,
         net                                    4,433        3,325        487
        Deferred income taxes -
         noncurrent                                --        2,272        333
          TOTAL NON-CURRENT ASSETS          1,127,983    1,128,698    165,358
          TOTAL ASSETS                      5,910,631    5,924,993    868,029
        Short term bank borrowings            884,708      924,430    135,432
        Accounts payable                       60,750       70,358     10,308
        Other payables                         57,238        8,953      1,312
        Accrued liabilities                    40,472       42,053      6,161
        Deposits received                       1,310        1,310        192
        Deferred revenues                      16,370       47,986      7,030
        Due to related parties                  5,118           --         --
        Taxation payable                       15,016       14,421      2,113
        Convertible notes                     233,716      139,604     20,452
        Embedded derivatives liabilities       63,096       20,698      3,032
        Assets retirement obligation            4,013        5,212        764
          TOTAL CURRENT LIABILITIES         1,381,807    1,275,026    186,795
        Shareholders loans                      6,732        6,732        986
        Warrants liabilities                  148,921       76,637     11,228
        Deferred tax liabilities              175,281      175,435     25,702
          TOTAL NON-CURRENT LIABILITIES       330,934      258,804     37,916
          TOTAL LIABILITIES                 1,712,741    1,533,830    224,711

     XING equity
        Common stock, par value RMB0.008
         (equivalent of US$0.001);
         authorised 200,000,000 shares as
         of December 31, 2009 and March
         31, 2010; outstanding and fully
         paid - 82,327,993 shares as of
         December 31, 2009 and
         90,294,134 shares as of March
         31, 2010                                602           657         96
        Additional paid-in capital         2,404,998     2,528,186    370,387
        Cumulative translation
         adjustments                        (160,352)      869,713    127,416
        Retained earnings                    796,736      (160,236)   (23,475)
           TOTAL XING EQUITY               3,041,984     3,238,321    474,424
     NONCONTROLLING INTEREST               1,156,086     1,152,843    168,895
           TOTAL EQUITY                    4,198,070     4,391,163    643,318
      EQUITY                               5,910,631     5,924,993    868,029

About Qiao Xing Universal Resources, Inc.

Qiao Xing Universal Resources, Inc. is an emerging Chinese resources company headquartered in Huizhou, Guangdong Province, China. The Company was previously one of the leading players of telecommunication terminal products in China, but made the strategic decision to diversify into the resources industry in 2007. In April 2009, the Company acquired the 100% equity interest in China Luxuriance Jade Company, Ltd (“CLJC”). CLJC, through its wholly owned Chinese subsidiaries, owns the rights to receive the expected residual returns from Chifeng Haozhou Mining Co., Ltd. (“Haozhou Mining”), a large copper- molybdenum poly-metallic mining company in Inner Mongolia, China. Since then, the Company has further refined its strategy to become a pure resources company and is actively seeking additional acquisition targets in the resources industry.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed. You should not place undue reliance on these forward-looking statements.

Forward-looking statements include all statements other than statements of historical facts, such as statements regarding anticipated mining production volumes, unit net costs of mining production, mining sales volumes, ore grades, molybdenum and other commodity prices, mine development and capital expenditures, mine production and development plans, availability of power, water, labor and equipment, environmental reclamation and closure costs and plans, environmental liabilities and expenditures, litigation liabilities and expenses, dividend payments, estimates of proven and probable reserves and other mineralized material, political, economic and social conditions in the areas of the Company’s operations and exploration efforts and results. Readers are cautioned that forward-looking statements are not guarantees of future performance and actual results may differ materially from those projected, anticipated or assumed in the forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from those anticipated in the forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. Qiao Xing Universal Resources, Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of August 23, 2010.

Monday, August 23rd, 2010 Uncategorized
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