Changfeng Energy Inc.

Changfeng Energy Inc.

March 31, 2010 14:25 ET

Changfeng Reports Record Year End Financial Results

TORONTO, ONTARIO--(Marketwire - March 31, 2010) - Changfeng Energy Inc. ("Changfeng") (TSX VENTURE:CFY), a China based natural gas distributor, today reported revenue of $17,876,478 for the year ended December 31, 2009 compared to $13,014,236 for the same period in 2008 representing a 37% increase. 

Net income for 2009 was $1,122,714 or $0.017 per share (based on 66,025,000 weighted average shares) compared to $918,291 or $0.014 per share (based on 63,479,372 weighted average shares) in 2008. The Company had a $990,252 income tax expense in 2009 versus $186,312 in 2008. The increase was primarily due to the income generated in Changfeng's China based subsidiaries.

Gross profit margin for 2009 remained the same strong 60%. 

Changfeng's EBITDA increased by 35% for fiscal 2009 to $3,644,676 compared to $2,692,652 in the same period in 2008.

For the three-month period ended December 31, 2009, Changfeng had a record quarterly revenue of $5,696,254 compared to $4,184,556 in the same period in 2008 representing a 35% increase. Gross margin for the quarter was 54.3% in 2009 compared to 64.8% in 2008. The lower gross margin was due to the purchase of additional gas in excess of our supply contract at a higher rate.

The Company's cash balance at December 31, 2009 was $3,782,250, compared to $5,477,208 at December 31, 2008.

During 2009, Changfeng connected 12,654 new residential customers compared to 13,295 in 2008. Total residential customers at the end of 2009 were 50,455 compared to 37,801 at the end of 2008 a 33% increase. In the same year, the Company connected 65 new commercial customers compared to 94 in 2008. Total commercial customers at the end of 2009 increased to 440 from 375 at the end of 2008, a 17% increase.

Mr. Huajun Lin, Chairman and CEO of Changfeng stated "We are very pleased with our progress in 2009. Sanya City remains a hot spot with increasing Central Government mandates and support for rapid expansion and with our new CNG business and the resultant relationships we expect significant new projects in 2010. 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 2010. We are currently working with Sanya City authorities and our gas supplier to finalize additional gas supply."

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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Changfeng Energy Inc.
    Graham Warren
    Chief Financial Officer
    Changfeng Energy Inc.
    Ann Lin
    Corporate Secretary