HONG KONG, June 29 /PRNewswire-FirstCall/ -- 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(Amounts in thousands, except share and per share data)
Year ended December 31,
2006 2007 2008 2008
RMB RMB RMB US$
NET SALES
Related parties - - 379,114 55,526
Others 145,389 125,963 466,970 68,394
------- ------- ------- -------
145,389 125,963 846,084 123,920
------- ------- ------- -------
COST OF SALES
Related parties - - (363,938) (53,303)
Others (36,787) (38,541) (426,920) (62,528)
------- ------- ------- -------
(36,787) (38,541) (790,858) (115,831)
------- ------- ------- -------
GROSS PROFIT 108,602 87,422 55,226 8,089
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES,
including share-based
compensation expense of nil in
2006, RMB38,998
(US$5,712)in 2007, and
RMB26,016 (US$3,810)
in 2008 (14,170) (52,499) (78,712) (11,530)
------- ------- ------- -------
INCOME (LOSS) FROM
OPERATIONS 94,432 34,923 (23,486) (3,441)
------- ------- ------- -------
OTHER INCOME (EXPENSE)
Interest income 904 4,520 4,265 625
Interest expense,
related party - - (1,835) (269)
Loss attributable to investment
in unconsolidated investees - (2,145) (9,691) (1,419)
Net gain on derivative assets - - 25,834 3,784
Gain on sale of investment
in subsidiary - - 78,877 11,553
Other 4,929 (512) 10,465 1,532
------- ------- ------- -------
5,833 1,863 107,915 15,806
------- ------- ------- -------
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 100,265 36,786 84,429 12,365
INCOME TAX EXPENSE (15,157) (12,051) (8,402) (1,231)
------- ------- ------- -------
INCOME FROM CONTINUING
OPERATIONS 85,108 24,735 76,027 11,134
------- ------- ------- -------
DISCONTINUED OPERATIONS
Loss from discontinued
advertising and
HARC operations,
net of taxes of nil (659) - - -
Loss on disposal of
discontinued operations,
net of taxes of nil (11,901) - - -
------- ------- ------- -------
LOSS FROM DISCONTINUED
OPERATIONS (12,560) - - -
------- ------- ------- -------
NET INCOME 72,548 24,735 76,027 11,134
======= ======= ======= =======
NET INCOME (LOSS) PER SHARE:
Basic
Income from continuing
operations 7.46 1.86 3.94 0.58
Loss from discontinued
operations (1.10) - - -
---- ---- ---- ----
Net income per share 6.36 1.86 3.94 0.58
==== ==== ==== ====
NET INCOME (LOSS) PER SHARE:
Diluted
Income from continuing
operations 6.17 1.43 3.41 0.50
Loss from discontinued
operations (0.91) - - -
---- ---- ---- ----
Net income per share 5.26 1.43 3.41 0.50
==== ==== ==== ====
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
Basic 11,402,372 13,290,471 19,276,019 19,276,019
========== ========== ========== ==========
Diluted 13,798,731 17,347,024 22,278,600 22,278,600
========== ========== ========== ==========
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND 2008
(Amounts in thousands, except share data)
ASSETS
December 31,
2007 2008 2008
RMB RMB US$
CURRENT ASSETS
Cash 483,689 120,888 17,706
Trade receivables:
Related parties - 70,830 10,374
Others 1,525 4,157 609
Bills receivable 13,000 1,460 214
Inventories 4,633 66,245 9,702
Note receivable - 96,166 14,085
Deferred tax assets - 4,425 648
Other assets 10,967 25,061 3,670
------ ------ -----
TOTAL CURRENT ASSETS 513,814 389,232 57,008
Property and equipment, net 37,772 242,463 35,512
Deposits for business
acquisitions and other - 119,741 17,537
Investment in unconsolidated
investees 30,495 22,210 3,253
Advances to unconsolidated
investee, net - 39,290 5,754
------ ------ -----
TOTAL ASSETS 582,081 812,936 119,064
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
2007 2008 2008
RMB RMB US$
CURRENT LIABILITIES
Accounts payable 991 7,361 1,078
Other payables 24,355 25,484 3,732
Advances from customers 2,169 15,261 2,235
Accrued liabilities 3,367 8,014 1,174
Related party payables 2,221 18,316 2,683
Income tax and other
taxes payable 5,593 11,341 1,661
Current portion of related
party capital lease obligation - 9,977 1,461
----- ------ -----
TOTAL CURRENT LIABILITIES 38,696 95,754 14,024
------ ------ ------
Related party capital lease
obligation, net of current
portion - 10,780 1,579
Other payables 8,312 10,087 1,477
8,312 20,867 3,056
----- ------ -----
TOTAL LIABILITIES 47,008 116,621 17,080
------ ------- ------
MINORITY INTEREST - 13,919 2,039
------ ------ ------
SHAREHOLDERS' EQUITY
Preferred shares, no par;
Authorized - 10,000,000 shares;
issued and outstanding -none - - -
Common shares, no par:
Authorized - 200,000,000 shares;
issued and outstanding
-17,323,416 and 19,623,416
shares at December 31, 2007 and
2008, respectively 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 - (7,149) (1,047)
Other comprehensive loss (12,961) (35,561) (5,208)
------ ------ -----
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.
SOURCE China Natural Resources, Inc.
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