NEW YORK, June 4, 2012 /PRNewswire/ -- Gushan Environmental
Energy Limited ("Gushan" or the "Company"; NYSE: GU), a
manufacturer of copper products and a producer of biodiesel in
China, today announced its
unaudited consolidated financial results for the first quarter of
2012.
Highlights for the First Quarter of
2012(Note 1)
- Total revenues increased by 7.6% year-to-year and decreased by
33.3% quarter-on-quarter to RMB266.5
million (US$42.3
million).
- Gross profit amounted to RMB12.7
million (US$2.0 million),
compared to a gross profit of RMB4.4
million for the first quarter of 2011 and a gross profit of
RMB30.8 million for the fourth
quarter of 2011.
- Loss from operations amounted to RMB3.0
million (US$0.5 million),
compared to a loss from operations of RMB14.5 million for the first quarter of 2011 and
a loss from operations of RMB671.1
million for the fourth quarter of 2011.
- Net loss attributable to the Company amounted to RMB2.1 million (US$0.3
million), compared to a net loss of RMB17.5 million for the first quarter of 2011 and
a net loss of RMB683.1 million for
the fourth quarter of 2011.
- Sales volume of copper products increased by 38.7% year-to-year
and decreased by 25.2% quarter-on-quarter to 5,132 tons.
- Average selling price of copper products decreased by 13.5%
year-to-year and increased by1.8% quarter-on-quarter to
RMB51,540 (US$8,184.2) per ton.
- Sales volume of biodiesel decreased by 97.2% year-to-year and
increased by 54.9% quarter-on-quarter to 127 tons. (Note
2)
- Average selling price of biodiesel increased by 19.6%
year-to-year and decreased by 4.9% quarter-on-quarter to
RMB6,421 (US$1,019.6) per ton. (Note2)
- Cash balance amounted to RMB51.6
million (US$8.2 million) as of
March 31, 2012.
Note 1: Translation from RMB into US$ at
RMB6.2975 to US$1.00,
see "Currency Convenience Translation" below.
Note 2: Sales volume of biodiesel includes biodiesel sold as
a refined oil product to the fuel market and biodiesel sold as
fatty acid methyl ester, an intermediate product to the chemical
industry. Average selling price of biodiesel represents total
average selling price of biodiesel sold as a refined oil product to
the fuel market and biodiesel sold as an intermediate product to
the chemical industry.
Financial Results for the First Quarter
of 2012
Revenues
The Company's revenues amounted to RMB266.5 million (US$42.3
million) for the first quarter of 2012, representing an
increase of 7.6% from RMB247.8
million for the first quarter of 2011 and a decrease of
33.3% from RMB399.6 million for the
fourth quarter of 2011. The increase on a year-to-year basis was
mainly due to the consolidation of Xiangbei's results beginning in
August 2011.
The Company's revenues from its copper products business totaled
RMB265.2 million (US$42.1 million) for the first quarter of 2011,
representing an increase of 19.36% from RMB222.2 million for the first quarter of 2011
and a decrease of 33.0% from RMB395.8
million for the fourth quarter of 2011. The sales volume of
copper products was 5,132 tons for the first quarter of 2012,
representing an increase of 38.7% from 3,701 tons for the first
quarter of 2011 and a decrease of 25.2% from 6,860 tons for the
fourth quarter of 2011. The average selling price of copper
products was RMB51,540 (US$8,184.2) per ton for the first quarter of
2012, representing a decreased of 13.5% from RMB59,558 per ton for the first quarter of 2011
and an increase of 1.8% from RMB50,615 per ton for the fourth quarter of 2011.
The increase in revenues from the Company's copper products
business on a quarter-on-quarter basis was mainly due seasonality,
as demand for copper products in China is generally higher in the forth quarter
of the year due to the Chinese New
Year holiday in the first quarter of the year, during which
some of the Company's copper products customers recess their
operations for as long as three weeks.
The Company's revenues from its biodiesel business totaled
RMB1.3 million (US$0.2 million) for the first quarter of 2012,
representing a decrease of 94.8% from RMB25.6 million for the first quarter of 2011 and
a decrease of 64.9% from RMB3.8
million for the fourth quarter of 2011. The sales volume of
biodiesel was 127 tons for the first quarter of 2012, as compared
to 4,532 tons for the first quarter of 2011 and 82 tons for the
fourth quarter of 2011. The average selling price of biodiesel was
RMB6,421 (US$1,019.6) per ton for the first quarter of
2012, representing an increase of 19.5% from RMB5,371 per ton for the first quarter of 2011
and a decrease of 4.9% from RMB6,754
per ton for the fourth quarter of 2011. The decrease in revenue
from the biodiesel business was attributable to the continued
suspension of substantially all of the Company's biodiesel
production, due primarily to the continued shortage of raw
materials and reduced demand due to a slowing PRC economy. Since
the third quarter of 2012, only the Company's Sichuan biodiesel production facility has
remained in operation. The Company does not expect to resume
production of biodiesel and biodiesel by-products on a large-scale
basis in the near future.
Cost of Revenues
Cost of revenues for the first quarter of 2012 totaled
RMB253.8 million (US$40.3 million), representing an increase of
4.3% from RMB243.4 million for the
first quarter of 2011 and a decrease of 31.2% from RMB368.8 million for the fourth quarter of 2011.
The increase on a year-to-year basis was mainly due to the
consolidation of Xiangbei's results beginning in August 2011. The decrease on a quarter-on-quarter
basis was mainly due to the decrease in sales of copper products
due to seasonality, as demand for copper products in China is generally higher in the forth quarter
of the year due to the Chinese New
Year holiday in the first quarter of the year, during which
some of the Company's copper products customers recess their
operations for as long as three weeks.
The cost of revenues of the Company's copper products business
totaled RMB252.1 million
(US$40.0 million) for the first
quarter of 2012, representing an increase of 19.0% from
RMB211.8 million for the first
quarter of 2010 and a decrease of 28.0% from RMB350.3 million for the fourth quarter of 2011.
The unit cost of raw materials for the copper business was
RMB47,623 (US$7,562.2) per ton for the first quarter of
2012, representing a decreased of 15.2% from RMB56,173 per ton for the first quarter of 2011
and an increase of 11.1% from RMB42,872 per ton for the fourth quarter of
2011.
The cost of revenues of the Company's biodiesel business totaled
RMB1.7 million (US$0.3 million) for the first quarter of 2012,
representing a decrease of 94.6% from RMB31.6 million for the first quarter of 2011 and
a decrease of 90.8% from RMB18.5
million for the fourth quarter of 2011. The decline in the
cost of revenues of the Company's biodiesel business was due to the
continued suspension of substantially all of the Company's
biodiesel production. The unit cost of raw materials for the
biodiesel business was RMB4,658
(US$739.7) per ton for the first
quarter of 2012, representing an increase of 13.6% from
RMB4,100 per ton for the first
quarter of 2011 and an increase of 0.2% from RMB4,647 per ton for the fourth quarter of
2011.
Gross Profit
The Company's gross profit for the first quarter of 2012 totaled
RMB12.7 million (US$2.0 million), compared to a gross profit of
RMB4.4 million for the first quarter
of 2011 and a gross profit of RMB30.8
million for the fourth quarter of 2011.
The Company's gross profit for the first quarter of 2012 was
composed of a gross profit of RMB13.1
million (US$2.1 million) from
its copper products business, representing a gross profit margin of
4.9%, which was partially offset by a gross loss of RMB0.4 million (less than US$0.1 million) from its biodiesel business,
representing a gross loss margin of 28.1%.
The Company's gross profit for the first quarter of 2011 was
composed of a gross profit of RMB10.4
million from its copper products business, representing a
gross profit margin of 4.7%, which was partially offset by a gross
loss of RMB6.0 million from its
biodiesel business, representing a gross loss margin of 23.7%.
The Company's gross profit for the fourth quarter of 2011 was
composed of a gross profit of RMB45.5
million from its copper products business, representing a
gross profit margin of 11.5%, which was partially offset by a gross
loss of RMB14.7 million from its
biodiesel business, representing a gross loss margin of 388.3%.
The deterioration of the copper products business's gross profit
margin on a quarter-on-quarter basis was mainly caused by a
narrowing of the spread between the average selling price of copper
products, which increased by 1.8%, and the average unit cost of raw
materials, which increased by 11.1%, and by the Company's use of a
RMB10.2 million provision for copper
product inventory write-downs during the fourth quarter of
2011. The Company made this provision due to a decrease in
the average selling price of copper products during October
2011.
The gross profit margin of the Company's copper products
business on a year-to-year basis was relatively stable. On a
year-to-year basis, the average selling price of copper products
increased by 13.5% and the average unit cost of raw materials
increased by 15.2%.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the first
quarter of 2012 totaled RMB18.6
million (US$3.0 million), as
compared to RMB16.4 million for the
first quarter of 2011 and RMB29.9
million for the fourth quarter of 2011.
The increase on a year-to-year basis was mainly due to an
increase in professional fees and an increase of staff costs.
Professional fees increased on a year-to-year basis mainly due to
the fees incurred in the first quarter of 2012 in connection with
the non-binding proposal letter from Mr. Jianqiu Yu, Chairman
and Principal Executive Officer of Gushan, to acquire all of the
outstanding ordinary shares of the Company not currently owned,
legally or beneficially, by Mr. Jianqiu Yu. Staff costs
increased on a year-to-year basis was mainly due to the
consolidation of Xiangbei's results beginning in August 2011.
The decrease in selling, general and administrative expenses on
a sequential quarterly basis was mainly due to a decrease in staff
costs and share-based compensation. Staff costs were lower during
the first quarter of 2012 than during the fourth quarter of 2011 as
a result of the impact of year-end bonuses, totaling RMB3.2 million, paid to all levels of the
Company's employees in the fourth quarter of 2011. The decrease in
share-based compensation was mainly caused by the recognition of
RMB7.7 million during the fourth
quarter of 2012 related to a fully-vested option granted on
October 31, 2011 to the Company's
chairman to purchase up to 1,013 ordinary shares of Engen
Investments Limited ("Engen"), which is 75% owned by the Company
and is the holding company of the Company's recycled copper
products business.
Other Operating Expenses
Other operating expenses for the first quarter of 2012 were nil,
as compared to RMB8.9 million for the
first quarter of 2011 and RMB40.8
million for the fourth quarter of 2011.
During the fourth quarter of 2011, other operating expenses
mainly consisted of depreciation of buildings and machinery, other
amortization and salaries paid to factory workers of suspended
biodiesel plants, totaling RMB9.7
million, an impairment loss of RMB28.2 million on a VAT recoverable and an
impairment loss of RMB2.9 million on
land use rights. During the first quarter of 2011, other operating
expenses mainly consisted of depreciation of buildings and
machinery, other amortization and salaries paid to factory workers
of suspended biodiesel plants, totaling RMB8.9 million. During 2011, all of the factory
workers of the suspended biodiesel plants were either laid off or
transferred to the Company's Sichuan biodiesel plant and the property,
plant and equipment of such suspended plants were fully impaired,
as a result, the Company did not incur any other expenses related
thereto during the first quarter of 2012.
Other Operating Income
Other operating income for the first quarter of 2012 amounted to
RMB3.3 million (US$0.5 million), as compared to nil for the first
quarter of 2011 and RMB7.6 million
for the fourth quarter of 2011. Other operating income for the
first quarter of 2012 and the fourth quarter of 2011 mainly
represented VAT refunds relating to the copper products business
received by subsidiaries of the Company.
Impairment loss on property, plant and equipment
Impairment loss on property, plant and equipment for the first
quarter of 2012 was nil, as compared to RMB603.3 million for the fourth quarter of
2011.
During the fourth quarter of 2011, the Company an impairment
loss of RMB603.3 million on certain
property, plant and equipment as a result of its view that the
possibility is remote that it will resume the production of
biodiesel and biodiesel by-products on a large scale basis in the
near future. As a result, such property, plant and equipment were
fully impaired. The Company did not recognize an impairment
loss in the first quarter of 2011.
Impairment loss of goodwill
The Company recognized an impairment loss of RMB41.4 million on goodwill for the fourth
quarter of 2011 as a result of its determination that the carrying
value of the copper products business exceeded its fair value and
that the implied fair value of goodwill of the copper products
business was nil. As the Company reviews goodwill for impairment
annually, no impairment loss on goodwill was recorded for the first
quarter of 2012 or the first quarter of 2011.
Change in Fair Value of
Contingent Consideration
Liabilities
The Company recognized an increase in fair value of contingent
consideration liabilities of RMB0.4
million (US$0.1 million) for
the first quarter of 2012, as compared to a decrease of
RMB6.6 million for the first quarter
of 2011 and a decrease of RMB6.0
million for the fourth quarter of 2011.
The contingent consideration liabilities consist of obligations to
issue equity securities of the Company and Engen under earn-out
arrangements the Company entered into in connection with its
acquisitions of the subsidiaries through which it operates its
copper products business. The subsequent change in the fair value
of these equity securities at each reporting date is recognized in
the Company's statement of operations.
The increase in fair value of contingent consideration
liabilities for the first quarter of 2012 was mainly due to an
increase in the market price of the Company's ADSs and the shorter
period remaining for discounting these liabilities.
The decrease in fair value of contingent consideration
liabilities for the first quarter of 2011 and the fourth quarter of
2011 were mainly due to decreases in the market price of the
Company's ADSs, changes in discount rates in calculating the fair
value of these liabilities and decreases in the valuation of Engen
as a result of downward adjustments of the Company's expectation
about the financial prospects of its recycled copper products
business.
Other Income (Expenses)
Other income (expenses) primarily consists of interest income,
interest expenses, foreign currency exchange gain (loss), net and
other income, net. Other income, net included, among others,
government grant income of RMB11.2
million (US$1.8 million) for
the first quarter of 2012 and RMB11.6
million for the fourth quarter of 2011.
Income Tax Expense
Income tax expense primarily consisted of corporate income tax
("CIT"), a provision for dividend withholding tax and other
overseas withholding tax.
CIT for the first quarter of 2012 amounted to RMB4.0 million (US$0.6
million), as compared to RMB0.5
million for the first quarter of 2011 and RMB14.7 million for the fourth quarter of
2011.
According to the CIT law, which came into effect from
January 1, 2008, and relevant
regulations promulgated thereunder, PRC-resident enterprises are
levied withholding tax at a rate of 10% on dividends to their
non-PRC-resident corporate investors for earnings accumulated
beginning on January 1, 2008.
Undistributed earnings generated prior to January 1, 2008 are
exempt from such withholding tax. Under the Arrangement between the
Mainland of China and Hong Kong
Special Administration Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on
Income (the "Mainland China/HKSAR DTA") and Guoshuihan [2009] No.
601 on "How to understand and recognize the "Beneficial Owner"
in Double Taxation Agreements" ("Circular 601"), a qualified
Hong Kong tax resident which is
the "beneficial owner" and holds 25% or more of the equity interest
in a PRC resident enterprise is entitled to a reduced withholding
tax rate of 5%. Pursuant to Circular 601, a beneficial owner under
a tax treaty is not purely determined by its place of legal
registration but also by other factors which depend on specific
facts and circumstances, and significant judgment may be
involved.
Although the Company intends to apply for the reduced dividend
withholding tax rate of 5% in the future when dividends for
earnings accumulated from January 1,
2008 by its PRC operating subsidiaries are wired out of
China, the Company made a 10%
provision on such undistributed earnings for such dividend
withholding tax. If the local SATs approve a reduced dividend
withholding tax rate of 5% when such dividends are actually wired
out of China, any excess provision
will be reversed in subsequent financial statements.
In respect of its recycled copper products business, the Company
made a provision for dividend withholding tax of RMB1.2 million (US$0.2
million) for the first quarter of 2012, RMB0.6 million for the first quarter of 2011 and
RMB3.2 million for the fourth quarter
of 2011.
In respect of its biodiesel business, no provision for dividend
withholding tax was made or reduced for the first quarter of 2012
as the provision previously made had been fully reversed by the end
of 2011 and all subsidiaries of biodiesel business still made
losses in the first quarter of 2012. The Company reduced the
provision for dividend withholding tax by RMB0.6 million for the first quarter of 2011 and
RMB4.9 million for the fourth quarter
of 2011. The decreases were due to the losses incurred by the
biodiesel business.
Other overseas withholding tax amounted to RMB0.3 million (less than US$0.1 million), RMB0.3
million and RMB0.3 million for
the first quarter of 2012, the first quarter of 2011 and the fourth
quarter of 2010, respectively.
Net Loss Attributable to the
Company
Net loss attributable to the Company amounted to RMB2.1 million (US$0.3
million) for the first quarter of 2012, as compared to a net
loss of RMB17.5 million for the first
quarter of 2011 and a net loss of RMB683.1
million for the fourth quarter of 2011.
Recent Events
Continued Listing Standards Notice from the NYSE
As previously disclosed, on May 1, 2012, the Company
received a letter from the NYSE notifying it that the Company was
not in compliance with one of the NYSE's standards for continued
listing of its ADSs on the exchange. Specifically, the NYSE
indicated that it considers the Company to be "below criteria"
because, as of December 31, 20111, the Company's average
global market capitalization over a consecutive 30 trading-day
period was less than USD50 million
and, at the same time, the Company's total stockholders' equity was
less than USD50 million. On
April 27, 2012, the Company reported that as of
December 31, 2011, the Company's total shareholders' equity
attributable to the Company was approximately USD36.2 million. As of December 31, 2011,
the Company's average global market capitalization over a
consecutive 30 trading-day period was approximately USD27.5 million.
Under NYSE continued listing rules, the Company has 90 days from
the receipt of the letter to submit a plan advising the NYSE of
definitive action the Company has taken, or is taking, that would
bring the Company into conformity with the applicable standards
within 18 months of receipt of the letter. If the NYSE staff
determines that the Company has not made a reasonable demonstration
of its ability to come into conformity with the applicable
standards within 18 months, the NYSE staff will promptly initiate
suspension and delisting procedures. Otherwise, if the NYSE staff
accepts the plan, the Company will be subject to semi-annual review
by the NYSE staff for compliance with the plan until either the
Company is able to demonstrate that it has returned to compliance
for a period of two consecutive quarters or until the expiration of
the 18 month period. The NYSE staff will promptly initiate
suspension and delisting procedures if the Company fails to meet
the continued listing standards by the end of the 18-month
period.
Business Outlook for Fiscal Year 2012
The Company's copper products business continued to contribute
positively to the Company's overall financial performance during
the first quarter of 2012 and this trend is expected to continue
although the slowing of China's
economy is expected to have a negative impact on this business.
Given the uncertainty of the overall macro economic environment,
the Company is cautiously continuing to explore the possibility of
acquiring more businesses in the copper products industry to
complement its existing businesses and strengthen its overall
copper products business portfolio.
During the first quarter of 2012, demand for diesel in
China continued to soften which
resulted in a decrease in biodiesel selling prices, while shortages
of raw materials for the Company's biodiesel business continued.
The Company will continue to closely monitor the operating
environment for its biodiesel business to determine whether it can
resume large scale production of biodiesel on a positive cash flow
basis.
Unaudited Financial Statements
The unaudited condensed consolidated statements of operations,
balance sheets and cash flow statements accompanying this
announcement have been prepared by management using Generally
Accepted Accounting Principles in the
United States of America ("U.S. GAAP"). These unaudited
financial statements are not intended to fully comply with U.S.
GAAP because they do not present all of the disclosures required by
U.S. GAAP. The December 31, 2011 balance sheet was derived
from audited consolidated financial statements of the Company.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars in this earnings
release, made solely for the reader's convenience, is based on the
H.10 statistical release of the Federal Reserve Board as of
March 31, 2012, which was
RMB6.2975 to US$1.00. No representation is intended to imply
that the Renminbi amounts could have been, or could be, converted,
realized or settled into U.S. dollars at such rate, or at any other
rate. The percentages stated in this earnings release are
calculated based on Renminbi.
About Gushan Environmental Energy Limited
Gushan operates a copper products business in China that manufactures copper rods, copper
wires, copper granules and copper plates primarily from recycled
copper. Currently, Gushan's copper products business has two
production facilities, with an aggregate daily production capacity
of approximately 210 tons of recycled copper products. Gushan also
produces biodiesel, a renewable, clean-burning and biodegradable
fuel and a raw material used to produce chemical products,
primarily from used cooking oil, and by-products from biodiesel
production, including glycerine and plant asphalt. Gushan sells
biodiesel directly to users, such as marine vessel operators and
chemical factories, as well as to petroleum wholesalers and
individual retail gas stations. The Company has seven production
facilities, located in the Sichuan, Hebei, Fujian
and Hunan provinces and in
Beijing, Shanghai and Chongqing, with a combined annual production
capacity of 490,000 tons. Currently, only Gushan's Sichuan production facility is in
operation.
Safe Harbor Statement
This announcement contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by words such as "will," "may," "expect,"
"anticipate," "aim," "target," "intend," "plan," "believe,"
"estimate," "potential," "continue," and other similar statements.
Statements other than statements of historical facts in this
announcement are forward-looking statements, including but not
limited to, the Company's expectations regarding the expansion of
its production capacities, its future business development, and its
beliefs regarding its production output. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about the Company and the industry. Important risks and
uncertainties that could cause the Company's actual results to be
materially different from expectations include but are not limited
to the effect of any applicable government policy, law or
regulation, of natural disasters, and of intensifying competition
in the biodiesel and alternative energy industries, the
availability of suitable raw materials to the Company, and the
risks set forth in the Company's filings with the U.S. Securities
and Exchange Commission ("SEC"), including on
Form 20-F. The Company undertakes no obligation to
update forward-looking statements, except as may be required by
law. Although the Company believes that the expectations expressed
in these forward-looking statements are reasonable, it cannot
assure you that its expectations will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
- FINANCIAL TABLES FOLLOW -
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Amounts expressed in thousands, except per share
data, per ADS data and number of shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
March 31, 2011
|
|
|
December 31, 2011
|
|
|
March
31, 2012
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
Revenues
|
|
247,768
|
|
|
399,624
|
|
|
266,520
|
|
|
42,322
|
|
Cost of
revenues
|
|
(243,405)
|
|
|
(368,798)
|
|
|
(253,825)
|
|
|
(40,306)
|
|
Gross
profit
|
|
4,363
|
|
|
30,826
|
|
|
12,695
|
|
|
2,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development
|
|
(159)
|
|
|
(119)
|
|
|
—
|
|
|
—
|
|
Selling,
general and administrative
|
|
(16,437)
|
|
|
(29,939)
|
|
|
(18,593)
|
|
|
(2,953)
|
|
Other
operating expenses
|
|
(8,854)
|
|
|
(40,773)
|
|
|
—
|
|
|
—
|
|
Impairment
loss of property, plant and equipment
|
|
—
|
|
|
(603,266)
|
|
|
—
|
|
|
—
|
|
Impairment
loss of goodwill
|
|
—
|
|
|
(41,440)
|
|
|
—
|
|
|
—
|
|
Profit
(loss) on disposal of property, plant and equipment
|
|
—
|
|
|
(13)
|
|
|
5
|
|
|
1
|
|
Change in
fair value of contingent consideration liabilities
|
|
6,561
|
|
|
6,031
|
|
|
(398)
|
|
|
(63)
|
|
Total
operating expenses
|
|
(18,889)
|
|
|
(709,519)
|
|
|
(18,986)
|
|
|
(3,015)
|
|
Other
operating income
|
|
—
|
|
|
7,633
|
|
|
3,272
|
|
|
520
|
|
Loss
from operations
|
|
(14,526)
|
|
|
(671,060)
|
|
|
(3,019)
|
|
|
(479)
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
141
|
|
|
47
|
|
|
94
|
|
|
15
|
|
Interest
expense
|
|
(1,409)
|
|
|
(2,141)
|
|
|
(2,198)
|
|
|
(349)
|
|
Foreign
currency exchange gain (loss), net
|
|
(54)
|
|
|
510
|
|
|
243
|
|
|
38
|
|
Other
income, net
|
|
473
|
|
|
11,612
|
|
|
11,027
|
|
|
1,751
|
|
Profit
(loss) before income tax
|
|
(15,375)
|
|
|
(661,032)
|
|
|
6,147
|
|
|
976
|
|
Income tax
expense
|
|
(775)
|
|
|
(13,279)
|
|
|
(5,548)
|
|
|
(881)
|
|
Net
profit (loss)
|
|
(16,150)
|
|
|
(674,311)
|
|
|
599
|
|
|
95
|
|
Less: Net
income attributable to non-controlling interests
|
|
(1,332)
|
|
|
(8,829)
|
|
|
(2,691)
|
|
|
(427)
|
|
Net
loss attributable to the Company
|
|
(17,482)
|
|
|
(683,140)
|
|
|
(2,092)
|
|
|
(332)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per ordinary share
|
|
(0.11)
|
|
|
(4.05)
|
|
|
(0.01)
|
|
|
—
|
|
Basic and
diluted loss per ADS
|
|
(1.08)
|
|
|
(40.50)
|
|
|
(0.12)
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares outstanding – Basic and
diluted
|
|
162,686,743
|
|
|
168,686,743
|
|
|
168,686,743
|
|
|
168,686,743
|
|
Weighted
average number of ADS outstanding – Basic and diluted
|
|
16,268,674
|
|
|
16,868,674
|
|
|
16,868,674
|
|
|
16,868,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense included
in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
79
|
|
|
60
|
|
|
—
|
|
|
—
|
|
Research
and development expenses
|
|
16
|
|
|
4
|
|
|
—
|
|
|
—
|
|
Selling,
general and administrative expenses
|
|
3,093
|
|
|
9,556
|
|
|
1,468
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
|
UNAUDITED SEGMENT INFORMATION
|
(Amounts expressed in thousands, except percentage
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
March 31, 2011
|
|
|
December 31, 2011
|
|
|
March
31, 2012
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
|
|
24,340
|
|
|
559
|
|
|
818
|
|
|
130
|
|
|
|
Biodiesel
by-products and raw materials
|
|
1,220
|
|
|
3,231
|
|
|
511
|
|
|
81
|
|
Total biodiesel
products
|
|
25,560
|
|
|
3,790
|
|
|
1,329
|
|
|
211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
products business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
products
|
|
220,394
|
|
|
347,209
|
|
|
264,524
|
|
|
42,005
|
|
|
Copper raw
materials and scrap
|
|
1,814
|
|
|
48,625
|
|
|
667
|
|
|
106
|
|
Total
copper products
|
|
222,208
|
|
|
395,834
|
|
|
265,191
|
|
|
42,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
247,768
|
|
|
399,624
|
|
|
266,520
|
|
|
42,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
(31,608)
|
|
|
(18,507)
|
|
|
(1,703)
|
|
|
(270)
|
|
Copper
products business
|
|
(211,797)
|
|
|
(350,291)
|
|
|
(252,122)
|
|
|
(40,036)
|
|
|
|
(243,405)
|
|
|
(368,798)
|
|
|
(253,825)
|
|
|
(40,306)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
(6,048)
|
|
|
(14,717)
|
|
|
(374)
|
|
|
(59)
|
|
Copper
products business
|
|
10,411
|
|
|
45,543
|
|
|
13,069
|
|
|
2,075
|
|
|
|
4,363
|
|
|
30,826
|
|
|
12,695
|
|
|
2,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit (loss) margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
-23.7%
|
|
|
-388.3%
|
|
|
-28.1%
|
|
|
-28.1%
|
|
Copper
products business
|
|
4.7%
|
|
|
11.5%
|
|
|
4.9%
|
|
|
4.9%
|
|
|
|
1.8%
|
|
|
7.7%
|
|
|
4.8%
|
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
March
31, 2012
|
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
65,519
|
|
|
51,603
|
|
|
8,194
|
|
Accounts
and bills receivable
|
|
|
226,704
|
|
|
114,758
|
|
|
18,223
|
|
Inventories
|
|
|
155,008
|
|
|
158,915
|
|
|
25,235
|
|
Prepaid
expenses and other current assets
|
|
|
65,545
|
|
|
106,891
|
|
|
16,974
|
|
Amounts
due from related parties
|
|
|
4,466
|
|
|
4,755
|
|
|
755
|
|
Income tax
receivable
|
|
|
674
|
|
|
674
|
|
|
107
|
|
Deferred
tax assets
|
|
|
2,019
|
|
|
1,714
|
|
|
272
|
|
Total
current assets
|
|
|
519,935
|
|
|
439,310
|
|
|
69,760
|
|
Property,
plant and equipment, net
|
|
|
96,929
|
|
|
114,650
|
|
|
18,206
|
|
Land use
rights
|
|
|
86,527
|
|
|
86,115
|
|
|
13,674
|
|
Deferred
tax assets
|
|
|
3,294
|
|
|
3,019
|
|
|
479
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
706,685
|
|
|
643,094
|
|
|
102,119
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short term
bank loans
|
|
|
110,000
|
|
|
110,000
|
|
|
17,467
|
|
Accounts
payable
|
|
|
98,347
|
|
|
91,511
|
|
|
14,531
|
|
Accounts
payable for property, plant and equipment
|
|
|
65,228
|
|
|
65,132
|
|
|
10,343
|
|
Accrued
expenses and other payables
|
|
|
60,501
|
|
|
64,305
|
|
|
10,211
|
|
Amounts
due to related parties
|
|
|
66,243
|
|
|
—
|
|
|
—
|
|
Income tax
payable
|
|
|
11,614
|
|
|
14,990
|
|
|
2,380
|
|
Total
current liabilities
|
|
|
411,933
|
|
|
345,938
|
|
|
54,932
|
|
Deferred
tax liabilities
|
|
|
11,285
|
|
|
12,572
|
|
|
1,996
|
|
Income tax
payable
|
|
|
10,547
|
|
|
10,547
|
|
|
1,675
|
|
Contingent
consideration liabilities, excluding current portion
|
|
|
10,261
|
|
|
10,562
|
|
|
1,677
|
|
Deferred
rebate income, excluding current portion
|
|
|
11,040
|
|
|
10,119
|
|
|
1,607
|
|
Total
liabilities
|
|
|
455,066
|
|
|
389,738
|
|
|
61,887
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
|
2
|
|
|
2
|
|
|
—
|
|
Additional
paid-in capital
|
|
|
1,541,838
|
|
|
1,543,306
|
|
|
245,067
|
|
Treasury
stock
|
|
|
(32,972)
|
|
|
(32,972)
|
|
|
(5,236)
|
|
Accumulated other comprehensive loss
|
|
|
(63,569)
|
|
|
(63,899)
|
|
|
(10,146)
|
|
Accumulated deficit
|
|
|
(1,217,439)
|
|
|
(1,219,531)
|
|
|
(193,653)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
equity attributable to the Company
|
|
|
227,860
|
|
|
226,906
|
|
|
36,032
|
|
Non-controlling interests
|
|
|
23,759
|
|
|
26,450
|
|
|
4,200
|
|
Total
shareholders' equity
|
|
|
251,619
|
|
|
253,356
|
|
|
40,232
|
|
Total
liabilities and shareholders' equity
|
|
|
706,685
|
|
|
643,094
|
|
|
102,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
|
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
(Amounts expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
March 31, 2011
|
|
|
December 31, 2011
|
|
|
March
31, 2012
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit
(loss)
|
|
(16,150)
|
|
|
(674,311)
|
|
|
599
|
|
|
95
|
|
Adjustments to reconcile net loss to net cash used
in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
based compensation
|
|
3,188
|
|
|
9,620
|
|
|
1,468
|
|
|
233
|
|
Depreciation
|
|
10,804
|
|
|
18,761
|
|
|
2,344
|
|
|
372
|
|
Land use
right expense
|
|
387
|
|
|
415
|
|
|
409
|
|
|
65
|
|
Profit
(loss) on disposal of property, plant and
equipment
|
|
—
|
|
|
13
|
|
|
(5)
|
|
|
(1)
|
|
Impairment
loss of property, plant and equipment
|
|
—
|
|
|
603,266
|
|
|
—
|
|
|
—
|
|
Impairment
loss of goodwill
|
|
—
|
|
|
41,440
|
|
|
—
|
|
|
—
|
|
Impairment
loss of land use rights
|
|
—
|
|
|
2,925
|
|
|
—
|
|
|
—
|
|
Impairment
loss of VAT recoverable
|
|
—
|
|
|
28,220
|
|
|
—
|
|
|
—
|
|
Change in
fair value of contingent consideration liabilities
|
|
(6,561)
|
|
|
(6,031)
|
|
|
398
|
|
|
63
|
|
Foreign
currency exchange (gain) loss, net
|
|
54
|
|
|
(510)
|
|
|
(243)
|
|
|
(39)
|
|
Deferred
tax expense (benefit)
|
|
254
|
|
|
(839)
|
|
|
1,867
|
|
|
296
|
|
Inventory
write-downs (reversal of write-downs)
|
|
(152)
|
|
|
1,096
|
|
|
2,662
|
|
|
423
|
|
Change
in assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
and bills receivable
|
|
(9,020)
|
|
|
(73,659)
|
|
|
111,946
|
|
|
17,776
|
|
Inventories
|
|
50,334
|
|
|
(30,868)
|
|
|
(6,569)
|
|
|
(1,043)
|
|
Prepaid
expenses and other current assets
|
|
(24,259)
|
|
|
(36,249)
|
|
|
(41,346)
|
|
|
(6,565)
|
|
Accounts
payable
|
|
(59,390)
|
|
|
73,067
|
|
|
(6,836)
|
|
|
(1,086)
|
|
Accrued
expenses and other payables
|
|
(13,155)
|
|
|
8,333
|
|
|
3,985
|
|
|
633
|
|
Income
taxes payable
|
|
(3,984)
|
|
|
10,398
|
|
|
3,376
|
|
|
536
|
|
Other
non-current liabilities
|
|
(959)
|
|
|
(925)
|
|
|
(922)
|
|
|
(146)
|
|
Other
assets
|
|
2,018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
cash provided by (used in) operating activities
|
|
(66,591)
|
|
|
(25,838)
|
|
|
73,133
|
|
|
11,612
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of property, plant and equipment
|
|
(20,645)
|
|
|
(2,831)
|
|
|
(20,161)
|
|
|
(3,201)
|
|
Proceeds
from disposal of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
5
|
|
|
1
|
|
Pledged
deposit for copper future contracts
|
|
(10,036)
|
|
|
9
|
|
|
—
|
|
|
—
|
|
Net
cash used in investing activities
|
|
(30,681)
|
|
|
(2,822)
|
|
|
(20,156)
|
|
|
(3,200)
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment
of bank loans
|
|
—
|
|
|
(30,000)
|
|
|
—
|
|
|
—
|
|
Proceeds
from new bank loans
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
Repayments
of advance from related parties
|
|
(34,709)
|
|
|
(16,660)
|
|
|
(66,519)
|
|
|
(10,563)
|
|
Proceeds
of advance from related parties
|
|
46,214
|
|
|
22,916
|
|
|
—
|
|
|
—
|
|
Addition
of advance to related parties
|
|
—
|
|
|
—
|
|
|
(289)
|
|
|
(46)
|
|
Acquisition of additional 8% equity interest in a
subsidiary
|
|
(42,701)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
cash provided by (used in) financing activities
|
|
(31,196)
|
|
|
6,256
|
|
|
(66,808)
|
|
|
(10,609)
|
|
Effect
of foreign exchange rate changes on cash
|
|
(1,812)
|
|
|
(154)
|
|
|
(85)
|
|
|
(13)
|
|
Decrease in cash
|
|
(130,280)
|
|
|
(22,558)
|
|
|
(13,916)
|
|
|
(2,210)
|
|
Cash at
beginning of period
|
|
272,822
|
|
|
88,077
|
|
|
65,519
|
|
|
10,404
|
|
Cash at
end of period
|
|
142,542
|
|
|
65,519
|
|
|
51,603
|
|
|
8,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Gushan Environmental Energy Limited