Changfeng Energy Inc.

Changfeng Energy Inc.

April 14, 2009 08:30 ET

Changfeng Reports Record Year End Financial Results, Provides Business Updates

TORONTO, ONTARIO--(Marketwire - April 14, 2009) - Changfeng Energy Inc. ("Changfeng") (TSX VENTURE:CFY), a China based natural gas distributor, today reported revenue of $13,014,236 for the year ended December 31, 2008 compared to $9,240,497 for the same period in 2007 representing a 40.8% increase.

Net income for 2008 was $918,291 or $0.014 per share (based on 63,479,000 shares) compared to $918,028 or $0.031 per share (based on 29,234,000 shares) in 2007. The Company had $186,312 income tax expense in 2008 versus $610,600 income tax recovery in 2007.

Gross profit margin for 2008 was 60.0% versus 59.0% in 2007.

Changfeng's EBITDA increased by 35.8% for fiscal 2008 to $2,692,652 compared to $1,982,546 in the same period in 2007.

For the three-month period ended December 31, 2008, Changfeng had a record quarterly revenue of $4,184,556 compared to $2,949,829 in the same period in 2007 representing a 41.9% increase. Gross margin for the quarter was 64.8% in 2008 compared to 59.6% in 2007. The higher gross margin was due to the increase in higher margin piped gas sales in the revenue mix during the quarter.

The Company's cash balance at December 31, 2008 was $5,477,208, compared to $2,597,876 at December 31, 2007.

During 2008, Changfeng connected 13,295 new residential customers compared to 7,746 in 2007, a 71.6% increase. Total residential customers at the end of 2008 were 37,801 compared to 24,506 at the end of 2007. In the same year, the Company connected 94 new commercial customers compared to 69 in 2007, a 36.2% increase. Total commercial customers at the end of 2008 increased to 375 from 281 at the end of 2007.

Mr. Huajun Lin, Chairman and CEO of Changfeng stated "We are very pleased with our progress in 2008. Sanya City remains a hot spot for travelers as an average of 96.18 percent of hotel rooms in the city were booked in the 'Golden Week' (Chinese New Year) in 2009. New hotels and condominiums are being built in the City, including the world renowned resort operators such as the Mandarin Oriental Sanya Resort, and the Kempinski Sanya Resort. Both the aforementioned operators are our customers. We continue to experience high booking requests for connections from new customers and we believe that natural gas demand in Sanya City will continue its strong growth into 2009. We are currently working with the City authorities and our gas supplier to finalize additional gas supply for our Yalong Bay and Haitang Bay expansions.

The announced CNG station project in Changsha City, Capital of Hunan Province, is our first step to expand our natural gas distribution business into Mainland China. With the support from China National Petroleum Corporation, the largest gas supplier in China, we are confident that we will have significant growth in this industry in the future."

Changfeng has secured additional natural gas supplies of 11 MM M3 per annum for its first group of CNG stations in Changsha City. "As an independent gas distributor in China, securing gas supply is a key factor to our success. With this additional gas supply contract in place we will be able to start our CNG vehicle filling station project soon." Said Mr. Lin.

Changfeng continues to work on new business opportunities in mainland China and will release further details as it progresses.

About Changfeng Energy Inc.

Changfeng is engaged in the design and construction of natural gas distribution networks and distribution of natural gas to commercial and residential customers in the greater Sanya City region of Hainan Province, China. The Company is headquartered in Toronto, Ontario and its shares trade on the TSX Venture Exchange.

This press release contains forward looking statements based on current expectations. These forward looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward looking statements. Risks and uncertainties about Changfeng's business are more fully discussed in the Company's disclosure materials, including its information circular and MD&A, filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars except for noted otherwise.

Contact Information

  • Changfeng Energy Inc.
    Mike Liu
    416-362-2393 (FAX)
    Changfeng Energy Inc.
    Graham Warren
    Chief Financial Officer
    416-362-2393 (FAX)