News

CHNR released interim results of operations for the three and six months ended June 30, 2009

CONTACT

Edward Wong, Chief Financial Officer

011-852-2810-7205 or cfo@chnr.net


 

FOR IMMEDIATE RELEASE


 

CHINA NATURAL RESOURCES RELEASES

INTERIM RESULTS OF OPERATIONS


 

HONG KONG, December 2, 2009 – CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released unaudited interim financial statements for the three and six months ended June 30, 2009 as follows:


 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND 
COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(Amounts in thousands, except share and per share data)


 

                         

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2008

 

2009

 

2009

 

2008

 

2009

 

2009

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

29,722

 

12,999

 

1,903

 

38,268

 

17,563

 

2,571

 

COST OF SALES

(12,141

)

(12,371

)

(1,811

)

(16,023

)

(16,268

)

(2,381

)

GROSS PROFIT

17,581

 

628

 

92

 

22,245

 

1,295

 

190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES,
including share-based compensation expense of 
RMB13,008 (US$1,904) for the six months ended June 30, 2009
(2008: RMB13,008) and RMB6,504 (US$952) 
for the three months ended June 30, 2009 (2008: RMB6,504)

(9,157

)

(12,870

)

(1,884

)

(21,658

)

(26,409

)

(3,867

)

OPERATING INCOME (LOSS) FROM CONTINUING 
OPERATIONS

8,424

 

(12,242

)

(1,792

)

587

 

(25,114

)

(3,677

)

INTEREST INCOME

372

 

65

 

9

 

1,121

 

421

 

61

 

OTHER INCOME, NET

67

 

 

 

48

 

529

 

78

 

LOSS ATTRIBUTABLE TO INVESTMENT 
IN UNCONSOLIDATED INVESTEE

(2,306

)

(2,960

)

(433

)

(4,437

)

(5,665

)

(829

)

INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES

6,557

 

(15,137

)

(2,216

)

(2,681

)

(29,829

)

(4,367

)

INCOME TAXES

(4,304

)

(714

)

(105

)

(4,941

)

(1,266

)

(185

)

INCOME (LOSS) FROM CONTINUING OPERATIONS

2,253

 

(15,851

)

(2,321

)

(7,622

)

(31,095

)

(4,552

)

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM DISCONTINUED 
OPERATIONS

20,207

 

5

 

1

 

24,451

 

(15,052

)

(2,204

)

NET INCOME (LOSS)

22,460

 

(15,846

)

(2,320

)

16,829

 

(46,147

)

(6,756

)

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to CHNR Shareholders

(3,504

)

(60

)

(9

)

(15,753

)

438

 

64

 

Attributable to non-controlling interests

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

18,956

 

(15,906

)

(2,329

)

1,076

 

(45,709

)

(6,692

)

Less comprehensive loss attributable to non-controlling interests

 

833

 

122

 

 

7,567

 

1,108

 

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO 
CHNR SHAREHOLDERS

18,956

 

(15,073

)

(2,207

)

1,076

 

(38,142

)

(5,584

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

 

CHNR Shareholders

22,460

 

(15,013

)

(2,198

)

16,829

 

(38,580

)

(5,648

)

Non-controlling interests

 

(833

)

(122

)

 

(7,567

)

(1,108

)

 

22,460

 

(15,846

)

(2,320

)

16,829

 

(46,147

)

(6,756

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO 
CHNR SHAREHOLDERS:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

2,253

 

(15,016

)

(2,198

)

(7,622

)

(29,549

)

(4,326

)

Discontinued operations

20,207

 

3

 

 

24,451

 

(9,031

)

(1,322

)

 

22,460

 

(15,013

)

(2,198

)

16,829

 

(38,580

)

(5,648

)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

0.12

 

(0.71

)

(0.10

)

(0.40

)

(1.42

)

(0.21

)

Income (loss) from discontinued operations

1.05

 

 

 

1.29

 

(0.43

)

(0.06

)

Net income (loss) per share

1.17

 

(0.71

)

(0.10

)

0.89

 

(1.85

)

(0.27

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

0.10

 

(0.71

)

(0.10

)

(0.34

)

(1.42

)

(0.21

)

Income (loss) from discontinued operations

0.88

 

 

 

1.10

 

(0.43

)

(0.06

)

Net income (loss) per share

0.98

 

(0.71

)

(0.10

)

0.76

 

(1.85

)

(0.27

)

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF 
SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basic

19,323,416

 

21,123,416

 

21,123,416

 

18,982,757

 

20,883,085

 

20,883,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

22,926,151

 

21,123,416

 

21,123,416

 

22,235,670

 

20,883,085

 

20,883,085

 


 


 


CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2009 AND DECEMBER 31, 2008

(Amounts in thousands, except share and per share data)


 

                   

 

 

 

 

December 31,

2008

 

June 30,

2009

 

June 30,

2009

 

 

 

 

 

 

 

 

 

 

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

ASSETS

     

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Cash

 

 

 

120,888

 

158,504

 

23,205

 

Trade receivables:

 

 

 

 

 

 

 

 

 

Related parties

 

 

 

70,830

 

 

 

Others

 

 

 

4,157

 

1,755

 

257

 

Bills receivable

 

 

 

1,460

 

 

 

Note receivable

 

 

 

96,166

 

 

 

Inventories

 

 

 

66,245

 

5,614

 

822

 

Deferred tax assets

 

 

 

5,470

 

966

 

141

 

Other assets

 

 

 

25,061

 

42,670

 

6,247

 

 

 

 

 

390,277

 

209,509

 

30,672

 

ASSETS CLASSIFIED AS HELD FOR SALE

 

 

 

 

442,543

 

64,790

 

TOTAL CURRENT ASSETS

 

 

 

390,277

 

652,052

 

95,462

 

INVESTMENT IN UNCONSOLIDATED INVESTEES

 

 

 

22,210

 

17,489

 

2,560

 

ADVANCES TO UNCONSOLIDATED INVESTEES, NET

 

 

 

39,290

 

38,346

 

5,614

 

PROPERTY AND EQUIPMENT, NET

 

 

 

238,591

 

185,545

 

27,164

 

DEPOSITS FOR BUSINESS ACQUISITIONS AND OTHER

 

 

 

119,741

 

48,119

 

7,045

 

TOTAL ASSETS

 

 

 

810,109

 

941,551

 

137,845

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

Bills payable

 

 

 

 

10,000

 

1,464

 

Accounts payable

 

 

 

7,361

 

17,100

 

2,504

 

Advance from customers

 

 

 

15,261

 

2,781

 

407

 

Accrued liabilities

 

 

 

8,014

 

3,001

 

439

 

Income tax and other taxes payable

 

 

 

12,368

 

1,192

 

175

 

Other payables

 

 

 

25,485

 

26,933

 

3,943

 

Current portion of related party capital lease obligation

 

 

 

9,977

 

 

 

Related party payable

 

 

 

18,316

 

168,396

 

24,654

 

 

 

 

 

96,782

 

229,403

 

33,586

 

LIABILITIES ASSOCIATED WITH ASSETS CLASSIFIED 
AS HELD FOR SALE

 

 

 

 

107,174

 

15,690

 

TOTAL CURRENT LIABILITIES

 

 

 

96,782

 

336,577

 

49,276

 

NON CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

Related party capital lease obligation, net of current portion

 

 

 

10,780

 

 

 

Long term loan

 

 

 

 

100,000

 

14,640

 

Other payables

 

 

 

10,087

 

82,612

 

12,095

 

TOTAL NON-CURRENT LIABILITIES

 

 

 

20,867

 

182,612

 

26,735

 

TOTAL LIABILITIES

 

 

 

117,649

 

519,189

 

76,011

 

EQUITY

 

 

 

 

 

 

 

 

 

China Natural Resources, Inc. equity:

 

 

 

 

 

 

 

 

 

Preferred shares, no par:

 

 

 

 

 

 

 

 

 

Authorized - 10,000,000 shares;

 

 

 

 

 

 

Common shares, no par:

 

 

 

 

 

 

 

 

 

Authorized - 200,000,000 shares;

 

 

 

 

 

 

 

 

 

Issued and outstanding – 19,623,416 and 21,123,416 shares 
at December 31, 2008 and June 30, 2009, respectively

 

 

 

312,081

 

312,081

 

45,689

 

Reserves

 

 

 

7,331

 

7,331

 

1,073

 

Additional paid-in capital

 

 

 

228,752

 

288,159

 

42,187

 

Excess of purchase price over net asset value

 

 

 

(7,149

)

(313,139

)

(45,844

)

Retained earnings

 

 

 

173,087

 

134,507

 

19,692

 

Other comprehensive loss

 

 

 

(35,561

)

(35,123

)

(5,142

)

TOTAL CHINA NATURAL RESOURCES, INC. EQUITY

 

 

 

678,541

 

393,816

 

57,655

 

NON-CONTROLLING INTERESTS

 

 

 

13,919

 

28,546

 

4,179

 

TOTAL LIABILITIES AND EQUITY

 

 

 

810,109

 

941,551

 

137,845

 


 


 

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Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2009 interim results "the first half of 2009 posted a challenge to the operation of China Natural Resources.  The global financial crisis caused the PRC economy to slow down sharply.  Base metal prices fell in general as compared to the first half of 2008 amid slowing industrial production.  However, China is expected to recover at a faster pace than other countries, and our mining operations are poised to benefit from the mainland's growth prospects and supportive policies.  The China economy grew 7.9% year on year in the second quarter which suggests that the China economy is expanding and steel demand from downstream customers is recovering.  We expect ore prices to rise in 2010 as demand for steel recovers and a rebound in industrial production growth.  We remain committed to our strategy in expanding our coal and base metal resources in the PRC.”

 

For the convenience of the reader, amounts in Renminbi (“RMB”) have been translated into United States dollars (“US$”) at the applicable rate of US$1.00 = RMB6.8305 as quoted by Bloomberg Finance L.P. as of June 30, 2009.  The Renminbi is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.

 

The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) have been prepared in accordance with generally accepted accounting principles in the United States but omit certain financial statements and note disclosure that would be included in full financial statements prepared in accordance with US GAAP.  The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) are derived from, and should be read in conjunction with, the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2009 and 2008, which was filed with the Securities and Exchange Commission on December 2, 2009 under cover of Form 6-K.  The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2009.


About China Natural Resources, Inc.

China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People's Republic of China, is currently engaged in (a) the acquisition and exploitation of mining rights, including the exploration, mineral extraction, processing and sale of iron, zinc and other nonferrous metals, extracted or produced at mines primarily located in Anhui Province in the PRC, and (b) the acquisition, exploration, development and production of coal resources in Guizhou province in the PRC.


This press release includes forward-looking statements within the meaning of federal securities laws.  These forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements.  Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People’s Republic of China, risks and hazards associated with the Company’s mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company’s reliance on third-party contractors and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Although the Company’s management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate.


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