Welcome!

News Feed Item

Hanwei Energy Services Reports Third Quarter Fiscal 2014 Financial and Operational Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 02/11/14 -- Hanwei Energy Services Corp. (TSX: HE) ("Hanwei" or the "Company"), today reported its financial results for the quarter ended December 31, 2013 (the "Reporting Period"). All amounts are in Canadian Dollars unless otherwise noted.

Financial Summary

For the three months ended December 31, 2013:


--  Revenues were $3.4 million, representing a decrease of 61% as compared
    to revenues of $8.6 million for the same period of the prior year. This
    decrease was primarily due to a reduction in demand from the Company's
    major Chinese and Kazakhstan customers and increased competition from
    other suppliers.

--  EBITDA from continuing operations for the three months ended December
    31, 2013 was negative $367,000 as compared to EBITDA from continuing
    operations of $654,000 for the same period of the prior year,
    representing a decline of 156%. The decline in EBITDA was primarily
    driven by the decline in revenues.

For the nine months ended December 31, 2013:


--  Revenues were $11.0 million, representing a decline of 50% as compared
    to revenues of $21.8 million for the same period of the prior year. This
    decrease was primarily due to a reduction in demand from the Company's
    major Chinese and Kazakhstan customers and increased competition from
    other suppliers.

--  EBITDA from continuing operations for the nine months ended December 31,
    2013 was negative $659,000 as compared to EBITDA from continuing
    operations of $2.7 million for the same period of the prior year. The
    decline in EBITDA was primarily driven by the decline in sales.

The Company had basic and diluted loss per share of $0.01 and nil for the three and nine months ended December 31, 2013 as compared to basic and diluted earnings per share of nil for the three months ended December 31, 2012 and $0.01 for the nine months ended December 31, 2012.

As of January 31, 2014, FRP pipe sales orders yet to be completed and shipped were approximately $6.2 million (the majority of which are expected to be completed within the fiscal year ended March 31, 2014).

Cash balance was $4.7 million as at December 31, 2013, representing an increase of $2.3 million from a cash balance of $2.4 million as of September 30, 2013.

Update on Corporate Strategy

Hanwei's core business remains in its FRP pipe manufacturing. The Company holds longstanding relationships with the leading Chinese oil & gas producers that include CNPC, PetroChina and Sinopec (and which have yielded repeat orders over the last ten years). The Company has also been previously successful in its sales efforts in Kazakhstan, a market in which it entered in 2009. Internationally the Company has undertaken a number of initiatives to expand out its sales in other markets and while initial orders have been received principally in the Middle East the sales results of entering new international markets have not yet materialized.

While the Company continues its efforts to drive sales it has seen a softening in its two principal markets of China and Kazakhstan with year over year sales reducing. This has primarily been due to less FRP products being ordered by end users in these markets as well as increased competition from other manufacturers. The Company will continue its sales and marketing efforts in the international markets but it is yet unknown if future sales results in these markets will be achieved and can restore or grow revenue.

Due to the downturn in the China and Kazakhstan FRP markets the Company is therefore actively investigating other corporate development opportunities focussed on restoring revenue including licensing of Hanwei's FRP manufacturing technologies, new sales and distribution arrangements, and other initiatives.

Update on Major Cash Receivables


--  Outstanding Wind Receivable: During the three-month period ended
    December 31, 2013, the Company received a payment of $0.9 million (RMB5
    million) as part of the outstanding accounts receivable due from its
    wind farm customers. The full amount of these receivables was previously
    allowed for and the Company's wind power business has been discontinued.
    As of the date of this MD&A approximately $32.7 million (RMB194.2
    million) has been collected with a balance of $5.1 million (RMB29.0
    million) outstanding. The Company is continuing its efforts to collect
    the balance of this outstanding amount.

--  Tianjin Plant Divestment: As previously reported the Company reached an
    agreement on May 27, 2013, to sell all of the equity interest in its
    wholly owned subsidiary Hanwei Green to a private Chinese company for an
    amount of $11.4 million (RMB65 million). The major asset of Hanwei Green
    is a manufacturing plant located in Tianjin, China which was constructed
    for wind blade production. The majority of the regulatory documentation
    and jurisdictional approvals required for the ownership transfer were
    completed as of (February 10, 2014). Under the current Agreement the
    Company is due to receive payments of $1.9 million (RMB11.0 million)
    upon completion of the ownership transfer documents and $3.3 million
    (RMB19.0 million) (due before December 31, 2013 under the current
    Agreement terms). Contemporaneously with the receipt of this payment the
    ownership transfer shall take effect and subject to a final payment of
    $6.1 million (RMB35.0 million) due May 27, 2014 (within twelve months
    after the agreement was signed on May 27, 2013). With the delay in
    receiving the necessary jurisdictional approvals the Company is in
    discussions with the buyer as to revisions to the timing of these
    payments that may result in a delayed payment schedule.

--  Wind Inventory Sale: During the year ended March 31, 2012, the Company
    executed a contract for sale of the majority of its wind power equipment
    inventory to a Chinese customer for agreed items totaling $15.7 million
    (RMB93.6 million). To date $12.6 million (RMB75.3 million) of this
    amount has been received by the Company. The balance to be paid is
    approximately $3.3 million (RMB18.3 million) which is expected to be
    received by the end of the Company's fiscal year ending March 31, 2014.

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 December 31, 2013. Management invites analysts and investors to participate on the conference call:



Date:               Wednesday, February 12, 2014

Time:               1:00 a.m., Eastern Time (10:00 am Pacific Time)

Dial in number:     1-888-539-3612 or 1-719-325-2464

A replay of the conference call will be available on the Company's website www.hanweienergy.com.

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

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.

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 18, 2013 and Management Discussion and Analysis for the year ended March 31, 2013 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.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle.
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, will posit that disruption is inevitable for c...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...