Hanwei Energy Services Corp.
TSX : HE

Hanwei Energy Services Corp.

August 31, 2011 16:30 ET

Hanwei Energy Services Reports First Quarter Fiscal 2012 Financial and Operational Results

FRP Pipe Orders Continue to Grow

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2011) - Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company") today reported its financial results for the quarter ended June 30, 2011 (the "Reporting Period"). All amounts are in Canadian Dollars unless otherwise noted.

Financial Highlights

For the three months ended June 30, 2011:

  • Revenue was $4.3 million, an increase of 31% over the comparable period in 2010. The increase was driven by continued improvements in both domestic and international markets for the Fiberglass Reinforced Plastic ("FRP") pipe business.
  • Net loss reduced to $1.4 million as compared to a loss of $5.0 million for the comparable period in 2010. The reduction in net loss is primarily due to a significant reduction in G&A expenses achieved through the elimination of costs associated with the wind power business, and the Company's continued focus on cost control.
  • Basic and diluted loss per share of $0.02 for the three months ended June 30, 2011 (compared to basic and diluted loss per share of $0.08 for the same period of 2010).

Major Corporate Developments

Update on FRP Pipe Orders

As of the date of this press release, the Company has confirmed FRP pipe orders of approximately $14.0 million (in addition to the $4.9 million of FRP pipe sales recognized during the three months ended June 30, 2011). These orders are expected to be produced and shipped during the balance of fiscal 2012 (the year ending March 31, 2012) and includes approximately $10.8 million to China customers and approximately $3.2 million to Kazakhstan customers.

Sale of Wind Power Business Inventory

The Company announced on June 14, 2011 that it has signed an agreement with a Chinese customer for the sale of the majority of the Company's current wind power equipment inventory for a total amount up to RMB120 million ($18 million) and had received an initial non-refundable amount of RMB20 million ($3.0 million). Pursuant to the agreement a detailed inventory valuation is in the final stages of being completed after which a second payment of RMB10 million (approximately $1.5 million) is expected to be received. The remaining amount of RMB90 million is expected to be paid to Hanwei as inventory is shipped to the Customer.

Graham Kwan, Executive Vice President and Rick Huang, Chief Financial Officer of Hanwei will host a conference call to discuss its operational and financial results for the quarter ended June 30, 2011. Management invites analysts and investors to participate on the conference call:

Date: Thursday, September 1st, 2011
Time: 11:00 a.m., Eastern Time
Dial in number: 1-877- 545-1407 or 1-719-325-4929
Taped Replay: 1-877-870-5176 or 1-858-384-5517 (available for 14 days)
Taped Replay Pass Code: 4069665
Live Webcast Link: http://viavid.net/dce.aspx?sid=00008C4D

About Hanwei Energy Services Corp.

Hanwei Energy Services Corp. is the leading Chinese manufacturer of high pressure, fiberglass reinforced plastic ("FRP") pipe products and associated technologies and services for the international oil and gas infrastructure industries. Hanwei serves major energy customers in the Chinese and global energy markets.

FORWARD-LOOKING INFORMATION

Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company's Annual Information Form dated June 20, 2011 and Management Discussion and Analysis for the period ending March 31, 2011 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company's expectations as of the date of this press release.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.

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

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