Message #2 From:
NewsBot Date: April 1, 2008 03:40:11 PM
China Bio Energy Reports Fiscal 2007 Financial Results
-- Full Year Revenue Increases 60% to $87.1 Million
-- Full Year Net Income Increases 61% to $8.6 Million
XIAN, China, April 1, 2008 /Xinhua-PRNewswire-FirstCall/ -- China Bio
Energy Holdings (OTC Bulletin Board: CBEH), (CBEH or the 'Company'), an energy
company engaged in the wholesale distribution and processing of heavy oil and
finished oil products and the development, production and distribution of bio-
diesel fuel, today announced consolidated financial results for the fiscal
year ended December 31, 2007.
Fiscal 2007 Results
Net sales for 2007 were approximately $87.1 million, a 60% increase as
compared to net sales in 2006 of approximately $54.4 million. The net sales
increase was a result of the Company's territorial expansion into five new
provinces in China through the opening of two new representative offices. In
addition, the Company started production of the new biodiesel production line
in October 2007, which resulted in a $4.4 million increase in biodiesel sales.
Gross profit was approximately $10.5 million for 2007, an increase of 58%
as compared to approximately $5.8 million for 2006. Gross margin as a
percentage of sales increased from 11% in 2006 to 12 % in 2007. The slight
increase in gross margin was mainly due to greater production of biodiesel and
sales volume of oil products in 2007.
Operating expenses, consisting of selling, general and administrative
expenses, were approximately $2.1 million for 2007 as compared to $0.4 million
for 2006, an increase of approximately $1.8 million or 498%. General and
administrative expenses increased $1.3 million from 2006, of which $1.1
million was associated with the Company's reverse merger and financing in 2007.
The major expenses related to the reverse merger and financing included U.S.
and Chinese legal counsel expenses, auditing expenses, consulting expenses,
and due diligence expenses.
Net income in 2007 was $8.6 million as compared to $5.3 million in 2006,
an increase of $3.2 million or 61%. This increase was due to the benefit of
the economies of scale resulting from the growth in revenue and corresponding
efficiencies in manufacturing operations and the extension in industry chain.
Earnings per diluted share decreased to $0.21 in 2007 from $0.22 in 2006, a
decrease of roughly 5%. The decrease was primarily the result of a $3.4
million deemed dividend to preferred shareholders related to warrants and
conversion rights attached to the Company's preferred shares. The management
of CBEH believes that the sales revenue and net income will continue to grow
well as the increases of the output of biodiesel and oil products business.
Excluding the deemed dividend to preferred shareholders, earnings per share
actually increased 55% to $0.34 per share.
'We are pleased with our results for 2007,' stated Gao Xincheng, Chief
Executive Officer of China Bio Energy. 'All segments of our business
experienced significant growth and we believe that we are well positioned to
continue growing. With the launch of our new bio diesel production facility
in October of 2007 we expect bio diesel fuel revenue to continue to increase
in 2008. As we did in 2007 we plan to continue to strengthen our distribution
channel for our petroleum products business and expect that business to
continue to grow as well.'
About China Bio Energy Holdings
CBEH is a distributor of petroleum related products and a manufacturer and
distributor of biodiesel fuel. CBEH sells a variety of related products
including, gasoline (used primarily in automobiles), diesel fuel (commercial
vehicles, agricultural machines, etc.), heavy oil and slurry (ship boilers,
heating furnaces, metallurgical furnaces and other industrial furnaces),
residual oil (utilized to manufacture petroleum coke, residual lubricating oil
and asphalt or as a feedstock for cracking), and naphtha (used to manufacture
ethane, propane, benzene, toluene and xylene). Sales of oil products in 2007
currently accounts for approximately 94% of CBEH's total revenues.
Bio-diesel refers to a clean burning alternative fuel produced from
domestic, renewable resources. Bio-diesel is made through a chemical process
whereby glycerin is separated from fat or vegetable oil. Bio-diesel contains
no petroleum, but it can be blended at any level with petroleum diesel to
create a bio-diesel blend and can be used in compression-ignition (diesel)
engines with little or no modifications. Bio-diesel is the ideal substitute
of petro-diesel and it has many benefits, including excellent environmental
performance, superior ignition, compatibility with existing diesel engines,
better lubrication to extend the life time of engines, and renewability.
Sales of bio-diesel fuel in 2007 account for approximately 6% of the Company's
total revenues. The percent of bio-diesel in the Company's total revenues will
increase greatly as the output of biodiesel increases.
