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
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...