SOURCE: New Oriental Energy & Chemical Corp.

New Oriental Energy & Chemical Corp.

November 22, 2010 17:36 ET

New Oriental Energy & Chemical Corp. Reports Second Quarter Results

XINYANG, CHINA--(Marketwire - November 22, 2010) - New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) (the "Company"), a China-based specialty chemical and emerging coal-based alternative fuel manufacturer, today announced results of operations for its second quarter and six months ended September 30, 2010.

In this year's second quarter, the Company reported a net loss of $(704,191), on revenues in the period of $3,187,574. This compared with a net loss of $(3,173,415) on revenues of $7,553,115 in the same period in the prior fiscal year.

In the first six months of the current fiscal year, revenues of $17,000,693 were 6.67% higher than revenues of $15,937,433 in the first half last year. The net loss in the first six months this year was $(3,316,871), a decrease of $3,008,058, or 47.56%, from the net loss of $(6,324,929) in the six months ended September 30, 2009.

Gross profit in the three months ended September 30, 2010 increased by $3,467,903 or 176.12% to $1,498,853 compared with the prior year period, mainly due to increased selling prices and a decrease in production cost year over year. The Company noted that it closed its factory for an extended period from July through mid-October to undergo a comprehensive examination of its production equipment.

Urea sales in the 2010 second quarter declined 48.03% to $3,173,217 year over year, however, gross margins increased to 47.16%, which reflected the lower production cost and higher sales prices. There were no DME or methanol sales in the period as such sales would have produced negative gross profits.

Mr. Chen S. Qiang, CEO and Chairman of the Company commented, "This has been a very difficult period for us, but we continue to be optimistic about seeing continuing improving conditions in the second half of the year. In recent weeks, we also have taken many steps, as reported, to strengthen the Company's financial condition."

SEE ATTACHED TABLE

New Oriental Energy & Chemical Corp.

New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) is an emerging coal-based alternative fuels and specialty chemical manufacturer based in Henan Province, in the PRC. The Company's core products are urea and other coal-based chemicals primarily utilized as fertilizers. Future growth is anticipated from its focus on expanding production of coal-based alternative fuels, in particular, methanol, as an additive to gasoline and dimethyl ether (DME), which has been a cheaper, more environmentally friendly alternative to LPG for home heating and cooking, and diesel fuel for cars and buses. All of the Company's sales are made through a network of distribution partners in the PRC. Additional information on the Company is available on its website at www.neworientalenergy.com.

Safe Harbor Statement

This press release may contain forward-looking statements concerning New Oriental Energy & Chemical Corp. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology or product techniques, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. New Oriental Energy & Chemical Corp. undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

 
 
NEW ORIENTAL ENERGY & CHEMICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(UNAUDITED)
    Three Months Ended
September 30,
  Six Months Ended
September 30,
    2010   2009   2010   2009
                 
REVENUES $ 3,187,574 $ 7,553,115 $ 17,000,693 $ 15,937,433
                 
COST OF GOODS SOLD   (1,688,721)   (9,522,165)   (16,567,459)   (19,494,540)
                 
GROSS PROFIT (LOSS)   1,498,853   (1,969,050)   433,234   (3,557,107)
                 
General and administrative   1,821,007   478,077   2,469,372   1,206,715
                 
Selling and distribution   10,988   260,196   253,588   547,716
                 
Research and development   9,112   15,045   27,460   42,673
                 
LOSS FROM OPERATIONS   (342,254)   (2,722,368)   (2,317,186)   (5,354,211)
                 
OTHER INCOME (EXPENSES)                
                 
Interest expense, net   (430,593)   (426,547)   (1,310,718)   (887,699)
                 
Other income (expenses), net   (459)   6,263   8,988   2,754
                 
Change in fair value of derivatives   69,115   -   302,045   -
                 
LOSS BEFORE INCOME TAXES   (704,191)   (3,142,652)   (3,316,871)   (6,239,156)
                 
INCOME TAX EXPENSE   -   (30,763)   -   (85,773)
                 
NET LOSS   (704,191)   (3,173,415)   (3,316,871)   (6,324,929)
                 
OTHER COMPREHENSIVE INCOME                
                 
Foreign currency translation gain   43,290   17,756   49,398   7,743
                 
OTHER COMPREHENSIVE INCOME   43,290   17,756   49,398   7,743
                 
COMPREHENSIVE LOSS $ (660,901) $ (3,155,659) $ (3,267,473) $ (6,317,186)
                 
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED   14,664,149   12,640,000   14,108,315   12,640,000
                 
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.05) $ (0.25) $ (0.24) $ (0.50)

Contact Information

  • Contacts:
    Li Donglai
    Chief Financial Officer
    New Oriental Energy & Chemical Corp.
    Xicheng Industrial Zone of Luoshan, Xinyang
    Henan Province, The People's Republic of China
    Tel: (011-86) 139-3764-6299