Grand Power Logistics Group Inc.
TSX VENTURE : GPW

Grand Power Logistics Group Inc.

May 31, 2012 09:30 ET

Grand Power Logistics Reports Financial Results for Q1 2012

CALGARY, ALBERTA and HONG KONG, CHINA--(Marketwire - May 31, 2012) - Grand Power Logistics Group Inc. ("Grand Power" or the "Corporation") (TSX VENTURE:GPW), a leading international logistics provider based in Hong Kong, today announced its consolidated financial results for the quarter ended March 31, 2012. All amounts are expressed in the US dollar (US$) except where noted.

Selected Q1 2012 Financial Highlights
(in thousands except per share or % data)March 31, 2012 March 31, 2011 Change
Revenue$14,379 $12,019 +19.64%
Gross profits$1,067 $826 +29.18%
Gross margins7.42%6.87%+8.0%
Net (loss) income (owners of Corporation)$22.0 ($282)+$304
Net (loss) income for the period$14.8 ($303)+$317.8
Earnings (loss) per share$0.000 ($0.004)+$0.004
Mar. 31, 2012 Dec. 31, 2011 Change
Total assets$26,467 $23,652 +11.90%
Working capital$3,649 $3,696 -1.27%
Total liabilities$16,347 $13,473 +21.33%
Shareholders' Equity (owners of Corporation)$9,958 $10,010 -9.55%

"The company experienced a significant growth in revenue in the first quarter of 2012 compared to the first quarter of 2011. The growth was experienced in both the co-loading business and the direct sales business. The growth in revenue was primarily attributed to a stronger marketing effort as the company expanded its oversea agent network recently. We are very satisfied that the company has generated a net profit of $14,817 in this quarter in comparison to a loss of $303,639 for the first quarter in 2011," said Mr. Ricky Chiu, President and CEO of Grand Power.

Q1 2012 Financial Results

Sales revenue for the three months ended March 31, 2012 increased by $2,359,456 (19.6%) to $14,378,617 from $12,019,161 in 2011. The increase in sales revenue for the quarter reflected the growth of direct sales business and the increase of air freight business initiated by the Corporation's recently expanded oversea agent network in the first quarter of 2012.

Gross profit for the three months ended March 31, 2012 increased by 29.1% to $1,066,995 compared to $826,305 in 2011, and gross profit margin increased to 7.42% compared to 6.87% for 2011. The increase in gross profit in the first quarter of 2012 compared to that in 2011 is primarily due to an increase in revenue and higher margin from new seasonal direct sales business.

The net profit for the three months ended March 31, 2012 was $14,817 compared to a net loss of $303,639 in 2011. The net profit attributable to the owners of the Corporation for this period was $22,064 compared to a net loss of $282,087 in 2011. Operating expenses for the three months ended March 31, 2012 decreased by 8.2% to $1,102,087 compared to $1,200,222 in 2011.

The Corporation generated positive cash flow from its operations for the quarter ended March 31, 2012 of $994,040 compared to a positive cash flow of $4,623,496 in 2011.

Tonnage shipped increased by 882 tonnes (15.52%) to 6,564 tonnes for the three months ended March 31, 2012 compared to 5,682 tonnes in 2011. The increase was primarily due to the growth of direct sales business and the increase of air freight business initiated by the Corporation's recently expanded oversea agent network.

For the three months ended March 31, 2012, the Corporation generated $12,041,347 (83.7%) of its revenue from its traditional co-loading air freight business, $1,522,747 (10.6%) of revenue from its direct sales air freight business and $814,523 (5.7%) of revenue from its ocean freight business. During the corresponding period of 2011, the Corporation generated $10,085,216 (83.9%) of its revenue from its traditional co-loading air freight business, $937,997 (7.8%) of revenue from its direct sales air freight business and $995,949 (8.3%) of revenue from its ocean freight business.

For the three months ended March 31, 2012, Hong Kong is still the Corporation's largest operating centre, generating $9,304,528 (64.7%) of the Corporation's total revenue whereas China and other regions accounted for $4,655,558 (32.4%) and $418,532 (2.9%), respectively, of revenue for the three months ended March 31, 2012. For the corresponding period in 2011, Hong Kong, China and other regions accounted for $9,046,363 (75.3%), $2,267,164 (18.9%), and $705,634 (5.9%), respectively, of the Corporation's total revenue.

Outlook

"During 2011, we had increased the size of its sales team and oversea agent network. As a result, we have experienced very positive results from these efforts in the first quarter of 2012. We will continue to build on the ground work that we have established and look forward to further improvement from these initiatives in the coming quarters," said Ricky Chiu, President and CEO of Grand Power.

About Grand Power Logistics Group Inc.

Grand Power operates principally through its wholly owned Hong Kong based subsidiary, Grand Power Express International Limited (GP Express), and provides air-freight forwarding and sea-freight services, customs brokerage, logistics, warehousing and distribution, as well as other value added services. GP Express has established operations in various regions, particularly in the Greater Pearl River Delta (GPRD), China's largest economic region. GP Express' Subsidiaries or Branch Offices in this region are located in Macau, Shenzhen and Guangzhou. GP Express also operates in other regions through Subsidiaries and Branch Offices or Supporting Offices in Shanghai, Beijing, Tianjin and Xiamen. For more information, please visit http://www.grandpowerlogistics.com.

Forward-looking Information

Statements included in this press release that are not historical facts may be considered "forward looking statements." All estimates and statements that describe the Company's objectives, goals or future plans are forward looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.

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.

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