China Natural Gas announces first quarter 2012 financial results

China Natural Gas announces first quarter 2012 financial results

China Natural Gas, Inc. (“China Natural Gas” or the “Company”) (PINK: CHNG), a leading provider of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an, China, today announced its financial results for the first quarter ended March 31, 2012.
First Quarter 2012 Results.
Revenue in the first quarter of 2012 increased by 33.9% to $32.28 million from $24.11 million in the first quarter of 2011, driven by our LNG production facility in Jingbian County, Shaanxi Province started operations , and the increase in the number of residential and commercial pipeline customers from 115,787 to 117,270 over the period. Sales revenue of natural gas grew by 44.5% year-over-year to $29.40 million, from $20.35 million in the first quarter of 2011. Gasoline revenue in the first quarter of 2012 decreased by 36.8% to $0.83 million, from $1.31 million in the same period of the prior year, mainly because 3 gasoline stations were closed during the second quarter and fourth quarter of 2011. Installation and automobile conversion services revenue decreased by 16.4% year-over-year to $2.05 million, from $2.45 million a year ago. In the first quarter of 2012, sales of natural gas, gasoline, and installation and automobile conversion services contributed 91.1%, 2.6%, and 6.3% of total revenue, respectively.
Gross profit in the first quarter of 2012 increased 16.9% to $11.36 million from $9.72 million in the same period of the prior year. Gross margin in the first quarter of 2012 was 35.2%, compared to 40.3% a year ago. Gross margin decreased primarily due to the current lower gross margin level of our LNG business, as compared to the gross margins of those business lines making greatest contribution to revenue.
Operating income in the first quarter of 2012 was $3.70 million, an increase of 14.6% year-over-year from $3.23 million, primarily attributable to the realization of revenue and gross profit of LNG, which started in July 2011..
Income tax expense was $0.79 million at an effective tax rate of 28.9%, as compared to $0.96 million at an effective tax rate of 27.8% in the first quarter of 2011. The decrease was primarily due to lower income before income tax for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011. The effective income tax rate increased from 27.8% to 28.9% over this period, primarily attributable to foreign currency exchange loss related to the Abax Senior Notes, which was not subject to income tax because we had incurred a net operating loss for income tax purpose for the three months ended March 31, 2012.
Net income in the first quarter of 2012 decreased by 21.6% to $1.95 million, or $0.10 per diluted share, from $2.49 million, or $ 0.12 per diluted share, in the first quarter of 2011.
As of March 31, 2012, the Company had $7.01 million of cash and cash equivalents on hand, compared to $9.62 million of cash and cash equivalents as of December 31, 2011. The decrease was primarily attributable to the construction of the LNG plant and other projects, and the repayment of the loans from Shanghai Pudong Development Bank and of the principal of the Abax Senior Notes.
Net cash provided by operating activities was $7.42 million for the first quarter of 2012, as compared to net cash provided by operations of $2.46 million for the first quarter of 2011. The increase was primarily due to the decrease in prepaid expense and other current assets, and increase in unearned revenue, and adjustments for non-cash expense items, including depreciation and amortization expenses, offset mainly by the increase in advances to suppliers and in other receivables.
About China Natural Gas, Inc. .
China Natural Gas (http://www.naturalgaschina.com ) transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in China’s Shaanxi and Henan Provinces. The Company owns approximately 120 km of high-pressure pipelines and operates 25 CNG fueling stations in Shaanxi Province, 12 CNG fuelling stations in Henan Province and 1 CNG fueling station in Hubei Province. China Natural Gas’ five primary business lines include: (1) distribution and sales of CNG through Company-owned CNG fueling stations serving hybrid (natural gas/gasoline) powered vehicles; (2) installation, distribution and sales of piped natural gas to residential and commercial customers through Company-owned pipelines; (3) production and sales of LNG through our LNG production facility in Jingbian County, Shaanxi Province; (4) distribution and sales of gasoline through Company-owned CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; and (5) conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at its automobile conversion workshops.
SAFE HARBOR: FORWARD-LOOKING STATEMENTS.
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. For example, statements about the future plans and goals of the JV with CNPC and its prospects are forward looking and subject to risks. China Natural Gas, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company’s filings with the U.S. Securities and Exchange Commission, including its registration statements on Forms S-1 and S-3, in each case as amended. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
SOURCE China Natural Gas, Inc.
ISSUERS OF NEWS RELEASES AND NOT OILANDGASPRESS.COM ARE SOLELY RESPONSIBLE FOR THE ACCURACY OF THE CONTENT.
Public relations, press release distribution service, investor relations, SEC filing, regulatory news,upstream, downstream,corporate announcements,technology developments and political news
www.oilandgaspress.com – The ‘one stop shop’ for global Oil and gas press releases!!!
>Oil and Gas Press

#FOLLOW US ON INSTAGRAM