Andatee China Marine Fuel Services Corporation, a leading independent operator engaged in the production, storage, distribution, wholesale purchase and sale of blended marine fuel oil for cargo and fishing vessels in Northern China, has announced a 333.8% rise in net income for the fiscal year ended December 31, 2009, following a sales volumes increase of 88.7%.
Net income for the full year 2009 was $6.4 million, or $1.11 per share, compared to $1.5 million, or $0.25 per share, in 2008. The net income margin for 2009 was approximately 5.4% compared to approximately 2.3% in 2008.
Revenues for the fiscal year 2009 were $124.28 million, an increase of $45.09 million, or approximately 57%, compared to $79.19 million in 2008. This increase was said to be a result of higher volumes sold due to the expansion of the company's sales network and recovery of demand from downstream industry. Following the 2008 acquisition of facilities located in
Shandong Shidao and
Zhejiang Nanlian, Andatee said it experienced a steady sales increase in these two markets.
Total sales volume for fiscal year 2009 was up 88.7% to 240,000 tons, compared to 127,000 tons in fiscal 2008. Sales volume of 4# marine fuel, mainly used by fishing boats, generated by the selling efforts of
Xinfa, increased by 21,500 tons, from 6,100 tons sold for the year of 2008 to over 27,600 tons in 2009, and in
Nanlian, the sales volume of 2# marine fuel, mainly used by fishing boats, was over 19,000 tons.
The company expanded and completed the construction of facilities in
Donggang, resulting in over 20,000 tons of #3 marine fuel to fishing boats of local customers, and contributing to the total increase in sales volume for the year 2009.
In 2009, #2 marine fuel represented 7.1% of sales, #3 marine fuel represented 9.5% of sales and #4 marine fuel represented 63.2% of sales, 180CST represented 13.1% of sales and 120CST represented 7.1% of sales. In 2008, #3 marine fuel represented 14.6% of sales, #4 marine fuel represented 71.0% of sales, 180CST represented 12.5% of our sales and 120CST represented 1.9% of sales.
2009 Sales by product and geographical areas:
Marine Fuel Oil Products
|
Product | Tonnes (in thousands) | % |
| 2# | 17.18 | 7.14% |
| 3# | 22.81 | 9.48% |
| 4# | 151.93 | 63.17% |
| 180CST | 31.47 | 13.08% |
| 120CST | 17.12 | 7.12% |
|
Areas
|
Area | Tonnes (in thousands) | % |
| Dalian | 91.03 | 37.85% |
| Shandong | 109.48 | 45.52% |
| Donggang | 20.16 | 8.38% |
| Zhejiang | 19.85 | 8.25% |
The gross profit margin was 11.3% for the full year 2009, compared to 5.3% in 2008. The increase in the company's gross profit margin was said to be primarily due to an increase in the sale of higher margin products, a change in customer mix and the decrease of raw material purchasing price. Sales to retail customers, which generally contribute to a higher gross margin, increased from 38% of total sales in 2008 to 43% of sales in 2009 as the result of Andatee's expansion and acquisition of retail distribution facilities.
Selling, general and administrative expenses were approximately $4.6 million in 2009 compared to $2.3 million in 2008. The increase was primarily due to increased promotional and advertising activities related to the expansion of the company's sales network, as well as increased expenses related to Andatee's initial public offering and other expenses applicable to becoming a public company.
As a result, income from operations in 2009 was $9.5 million, representing 408.8% increase from $1.9 million last year. Operating margin was 7.6% in 2009 compared to 2.4% in 2008.
Commenting on the results,
Fengbin An, Chairman and CEO of Andatee Marine China Fuel Services Corporation, said "We are pleased with the solid business results we delivered in the fourth quarter and for the full year 2009. This performance is the result of the strong execution of our business strategy as our efforts to expand our sales network into Shandong, Zhejiang and Donggang yielded positive results. As we look to the future, we remain focused on providing the highest quality fuel at competitive prices to build a loyal customer base and to strengthen our brand. Additionally, we expect to continue our expansion into other regions with a focus on the retail market as we move to attain our goal of becoming the leading one-stop-shop marine service depot in China.
"In addition, we are proud to announce our successful initial public offering on Nasdaq Global Market raising net proceeds of approximately $17.74 million," Fengbin An added.
Fourth Quarter 2009 Results
For the fourth quarter 2009, net income was $1.7 million, or $0.28 per diluted share, compared to $(836,838) million during the same period in 2008. Gross profit was $3.9 million, compared to $(1.1) million during the last quarter of 2008.
Total revenues were approximately $39 million, up 173% from $14.3 million in the fourth quarter of 2008.
Operating profit was approximately $6 million in the final quarter of 2009, compared to $(241,936) during the same period in 2008.
Future outlook
Commenting on the future business outlook, Andatee said "China's economy is still showing a strong growth trend and recovery from the 2008 recession, resulting in an increased demand for fuel. The eastern Liaoning Province of Northeast China, where Andatee operates, continues to see increasing demand for marine fuel products to support the fishing and cargo activities in this highly populous region. Going forward, the Company has established a solid plan to expand its footprint to capture the market share in Jiangsu, Fujian, Guangdong and Guangxi province. Additionally, the company is also well positioned to diversify its product offering to include providing marine port services to its retail customers."
Mr. An commented: "We expect growth for the fiscal year 2010 to remain strong due to the expected further strong growth in the Chinese economy, particularly the Northeast developing region and Eastern seaports. We maintain focused on a business strategy of increasing storage for our products, including potential acquisition targets to expand our reach along the Eastern coast. We continue to maintain focus on capitalizing on the opportunities to meet the growing demand for marine fuel in the region."
