Total Revenues up 30%, Net Income up 104% over Q2 2007 We are actual admiring to address able after-effects for the aboriginal time as a about traded company
Shenzhen, China -- Zhaoheng Hydropower (OTC Bulletin Board: ZHYP) ("Zhaoheng Hydropower" or the "Company"), a baton in baby to average sized hydropower bearing in Midwest China, today appear its unaudited banking after-effects for the additional division concluded June 30, 2008.
Second Quarter Financial and Operating Highlights
* Revenues were $3.34 million, an access of 30% from $2.36 actor in the additional division of 2007
* Gross accumulation was $2.59 million, an access of 26% from $1.91 actor in the additional division of 2007
* Net assets was $ 2.2 million, an access of 104% from $1.08 actor in the additional division of 2007
"We are actual admiring to address able after-effects for the aboriginal time as a about traded company," commented Mr. Xu Guosheng, Chairman and Chief Executive Officer of Zhaoheng Hydropower. "Our investments are paying off as we saw a able access in revenues compared to the aforementioned division endure year. Revenues were primarily apprenticed by an added installed accommodation from accretion and new construction, an access in electricity tariffs, and an advance in operational capability and efficiency. We abide to abide absolute on the approaching angle of our business as we apprehend awkward oil prices to abide top and account addition activity companies. We will aswell account as the Chinese government persists on alleviative hydropower as a antecedence in activity resources."
Second Quarter 2008 Financial Results
Revenue
Revenues were $3,342,642 million, an access of 30% from $2,363,423 in the three months concluded June 30, 2007. This advance was due primarily to an access in both electricity assessment and installed capacity.
The boilerplate electricity assessment for our Hunan accessories was RMB 0.2410/KWH in the additional division compared to RMB 0.2406/KWH for the three months concluded June 30, 2007. Two new breeding units with absolute installed accommodation of 50 MW were put into use in April 2008 and addition hydropower base was acquired in June 2008, bringing the absolute installed accommodation of the Company to 120MW by June 30, 2008.
Cost of Sales
Cost of sales was $755,592, or 20.9% of our net sales compared to $450,783, or 19.1% of our net sales in the three months concluded June 30, 2007. There was a 1.8% access in the amount of sales due to an access in installed accommodation from 65MW to 120MW. However our absolute achievement in the additional division did not access in admeasurement to the access in installed accommodation due to decreased condensate in the aforementioned period. Our amount of sales consists of anchored asset depreciation, accessories aliment cost, absolute activity costs, aerial and accompaniment taxes (not including value-added tax, amount absolute tax and accumulated assets tax).
Operating Expenses
Total operating expenses, which cover affairs and accurate expenses, decreased to $214,207 from $316,580 for the three months concluded June 30, 2007. The abatement in operating costs was mainly due to bargain activity amount through the circuit off of our accessory Hunan Jiuli Hydropower Construction Co, Ltd on April 30, 2008.
Interest Income
Starting from January 1, 2008, our subsidiaries Hunan Sanjiang Power Co., Ltd. and Hunan Zhaoheng Hydropower Co., Ltd. started charging absorption on the loans to our accompanying affair Shenzhen Zhaoheng Industrial Co., Ltd. We accomplished absorption assets of $963,845, compared with an absorption assets of $1,567 in the additional division of 2007. Interest ante answerable on these loans are 120% of the archetype amount set by People's Bank of China.
Interest Expense
Interest amount was $1,153,397 in the additional division compared to $180,632 in the additional division of 2007. This access was due to assets of absorption costs occurred during the architecture of a new hydropower bulb by our accessory Hunan Zhaoheng Hydropower Co., Ltd.
Net Income
Net assets added to about $2.2 actor in the additional division from about $1.08 actor in the aforementioned division one year ago. Net assets as a allotment of acquirement added 19.7% mainly as a aftereffect of bargain operating costs and added absorption income. Also, we accomplished investment assets of $131,773 in Zhaoheng (Shimen) Weile Tungsten Co., Ltd in the additional quarter.
First Half 2008 Financial Highlights
Revenue
Total acquirement was $4.63 actor in the aboriginal bisected of 2008, an access of 2.2% from $4.53 actor in the aforementioned aeon one year ago. The access was primarily due to an access in both electricity assessment and installed capacity. Two new breeding units with absolute installed accommodation of 50 MW were commenced in April 2008 and addition hydropower base was acquired in June 2008, bringing the absolute installed accommodation of the Company to 120MW by June 30, 2008.
Gross Profit
Gross accumulation was $3.41 actor in the aboriginal bisected of 2008, a abatement of 6.5% from $3.65 actor in the aforementioned aeon one year ago. The abatement was primarily due to the access in amount of sales from an access in installed accommodation from 65MW to 120MW in the aboriginal bisected of 2008.
Net Income
Net assets was $2.4 actor in the aboriginal bisected of 2008, an access of 26.7% from about $1.89 actor in the aforementioned aeon one year ago. Net assets as a allotment of acquirement added 9.9% mainly through bargain operating costs and added absorption income. Also, we accomplished investment assets of $131,773 in Zhaoheng (Shimen) Weile Tungsten Co., Ltd during the additional division compared to $0 for the three aforementioned aeon one year ago.
Recent Business Developments
* Commenced operations for Hunan Sanjiang larboard case for an installed accommodation of 50MW
* Acquisition of Jingrong Industrial Development Co., Ltd (Jingrong, Guizhou) in June 2008 and added absolute installed accommodation by 7.5MW
* Sold Jiuli Hydropower Construction Co. Ltd to Shenzhen Zhaoheng Industrial Co., Ltd.
About Zhaoheng Hydropower
Zhaoheng Hydropower Company, through its wholly-owned subsidiaries in acreage China, is a arch able baby and medium-sized hydropower base investment, development, and administration aggregation focused on hydropower stations with an installed accommodation amid 5-100 MW. Currently, the aggregation owns three accessories in China with a absolute installed accommodation of about 120 MW. Zhaoheng Hydropower treats the avalanche development of river basins as a antecedence and is committed to advance advanced the development of apple-pie and renewable activity industry in China. The Company listed on the OTCBB back May 14, 2008 and has offices in Hong Kong and Shenzhen, China
Forward-Looking and Cautionary Statements
This columnist absolution contains advanced statements. Forward-looking statements cover statements that may predict, forecast, indicate, or betoken approaching results, achievement or achievements, and may accommodate the words "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning," "expect," "believe," "will," "will likely," "should," "could," "would," "may" or words or expressions of agnate meaning. All advanced statements are accountable to accident and uncertainties that could could cause absolute after-effects to alter materially from those projected. Factors that could could cause such a aberration include, after limitation, vulnerability of our business to accepted bread-and-butter downturn, operating in the People's Republic of China about and the abeyant for changes in the laws of the People's Republic of China that affect our operations, our adeptness to access all all-important government certifications and/or licenses to conduct our business, the amount of acknowledging with accepted and approaching authoritative regulations and the appulse of any changes in the regulations on our operations, as able-bodied as added risks set alternating in the Company's filings with the Securities and Exchange Commission. The advanced statements absolute herein allege alone as of the date of this columnist release. The Company especially disclaims any obligation or adventure to absolution about any updates or revisions to any such account to reflect any change in the Company's expectations or any change in events, altitude or affairs on which any such account is based.
Contacts for investors and media
Lily Zhou, Director of Investor Relations
+852 2787.3355 in Hong Kong
Alan Peng, Corporate Secretary
+86-755-82070966 in Shenzhen, China
Kathy Li, Christensen Investor Relations
+1 212.618.1978 in New York
kli @ christensenir.com
Roger Hu, Christensen Investor Relations
+852 2232.3918 in Hong Kong
rhu @ christensenir.com
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