Hanwei Energy Services Corp.
TSX : HE

Hanwei Energy Services Corp.

November 15, 2011 08:00 ET

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

FRP pipe sales increase 41% to $11.4 million for the quarter

EBITDA from continuing operations improves by $2.3 million in the quarter and $2.2 million for the six month period

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 15, 2011) - Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company"), today reported its financial results for the quarter ended September 30, 2011 (the "Reporting Period"). All amounts are in Canadian Dollars unless otherwise noted.

For the three months ended September 30, 2011:

  • Revenues from continuing operations, the Company's core FRP pipe business, increased 41% to $11.4 million compared to $8.1 million in the same three-month period of the prior year. Growth in pipe sales was due to increased demand in the China and Kazakhstan markets.
  • Positive EBITDA from continuing operations was $0.9 million (or 8% of revenues) versus negative EBITDA from continuing operations of $1.4 million in the same three-month period of the prior year.
  • The Company had a loss from continuing operations of $0.3 million as compared to a loss from continuing operations of $1.7 million for the same period of the prior year. Loss per share from continuing operations was $0.00 for the second quarter of fiscal 2012 versus a loss of $0.02 per share from continuing operations in the same period of the prior year.
  • As at September 30, 2011, the Company's wind power business has been classified as discontinued operations.

For the six months ended September 30, 2011:

  • Revenues from continuing operations increased 43% to $16.3 million as compared to revenues of $11.4 million in the same six-month period of the prior year.
  • Positive EBITDA from continuing operations was $0.3 million (or 2% of revenues) versus negative EBITDA from continuing operations of $1.9 million in the same six-month period of the prior year.
  • The Company had a loss from continuing operations of $1.6 million, or $0.02 per share, for the six months ended September 30, 2011 as compared to a loss from continuing operations of $3.0 million, or $0.04 per share for the same period of the prior year.

In addition to the $16.3 million of FRP pipe sales recognized during the six months ended September 30, 2011 the Company has confirmed FRP pipe orders of approximately $8.3 million as of October 31, 2011. These further orders are expected to be produced and shipped during the balance of fiscal 2012.

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 September 30, 2011. Management invites analysts and investors to participate on the conference call:

Date: Wednesday, November 16, 2011
Time: 11:00 a.m., Eastern Time
Dial in number: 1-888-778-9067 or 1-913-981-5518
Taped Replay: 1-877-870-5176 or 1-858-384-5517 (available for 14 days)
Taped Replay Pass Code: 4598448
Live Webcast Link: http://viavid.net/dce.aspx?sid=00008F79

About Hanwei Energy Services Corp.

Hanwei Energy Services Corp. is a leading 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.

www.hanweienergy.com

The term EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations does not have a standardized meaning prescribed by IFRS and may not be comparable to other similarly titled measures used by other companies. Readers should refer to the Company's Management Discussion and Analysis for the period ending September 30, 2011 available on SEDAR at www.sedar.com in regards to the reconciliation between net earnings from operations as determined in accordance with IFRS and EBITDA from continuing operations.

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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