Yalian Steel Announces Third Quarter Financial and Operational Results
28 August 2010 - 6:30AM
PR Newswire (Canada)
VANCOUVER, Aug. 27 /CNW/ -- TSX-V:YL VANCOUVER, Aug. 27 /CNW/ -
Yalian Steel Corporation (TSX-V: YL) today announced its
consolidated financial and operating results for the three and nine
month periods ended June 30, 2010. The "Company" or "Yalian" refers
to Yalian Steel Corporation (formerly China Drill Corporation) and
its subsidiary, Yangzhou Yalian Steel Pipe Co. Ltd "Yangzhou
Yalian" which operates primarily within the People's Republic of
China ("PRC"). The Company completed its qualifying transaction and
began trading as a public company in December 2008. Yalian reports
its results in Canadian dollars, as reported here, unless otherwise
stated. For the three month period ended June 30, 2010, Yalian
reported revenues of $211,527; cost of sales of $316,100; expenses
of $680,262 and other loss of $276,707 (comprising a foreign
currency exchange loss of $300,754 and interest income of $24,047).
Net loss for the three month period was $1,061,542, or $0.01 per
share. After accounting for an unrealized foreign currency
translation gain of $2,514,778, the comprehensive income for the
period was $1,453,236. For the nine month period ended June 30,
2010, Yalian reported revenues of $524,609; cost of sales of
$673,261; expenses of $2,611,314 and other income of $169,487
(comprising government grants of $228,900, a foreign currency
exchange loss of $176,104 and interest income of $116,691).
Net loss for the nine month period was $2,590,479, or $0.03 per
share. After accounting for an unrealized foreign currency
translation loss of $28,405, the comprehensive loss for the period
was $2,618,884. As at June 30, 2010, cash and cash equivalents were
$12,028,033, inventory was $1,408,730, prepaid expenses were
$8,934,528, other amount receivable was $3,657,192, prepayments for
property plant and equipment totaled $6,234,222, property plant and
equipment was $54,460,418 and the Company's working capital
position was $15,335,439. The long-term loans, net of financing
costs, were $33,662,000 and deferred government grant was
$5,786,120. Accounts payable and accrued liabilities totaled
$1,955,216. Total shareholders' equity was $45,495,147.
Operational and Business Highlights During the three and nine month
periods ended June 30, 2010, Yalian achieved a number of
operational and business milestones including: In February 2010,
Yangzhou Yalian received approval from the American Petroleum
Institute for certification and license registration of "5L X-70
Grade" for its high grade steel large diameter pipe mill and is in
the process of applying for additional certification of X-80 grade
and higher. In March 2010, Yangzhou Yalian received an A1 Grade
production license from the State General Administration of the PRC
for Quality Supervision, Inspection and Quarantine. The "A1
Grade" is the highest production license available and permits
Yangzhou Yalian to manufacture LSAW pipes for all grades of steel
to be manufactured and sold within the PRC. By the end of March
2010, Yangzhou Yalian had received all of its required permits,
licenses and industry certifications necessary to commence
operations in China. For the quarter ended June 30, 2010, the
Company manufactured and delivered additional test orders and
continued to focus its efforts on the development and expansion of
its sales and marketing activities within China. The
Company's focus during the quarter has been to build strategic
alliances with major state owned oil & gas companies within the
PRC to develop and be accepted into key purchasing networks.
During the quarter, the Company qualified and was added to the
pre-approved natural gas vendor lists for Hubei and Jiangsu
provinces and is in the process of being qualified and added to the
natural gas vendor list for Guangdong province. The Company
also continues to build relationships with a number of major
international trading companies and is working to expand its
distribution network within the PRC and abroad. The Company
also completed the planning and engineering phase of its new
anticorrosion line and placed orders with various suppliers to
procure the necessary materials and equipment. The project is
expected to cost approximately $5,300,000 and is expected to be
completed in early calendar year 2011. Subsequent to June 30, 2010,
the Company voluntarily repaid the USD $2,000,000 ($2,121,200)
unsecured term loan. For more detailed information, please refer to
the Company's filings on SEDAR at www.sedar.com. About Yalian Steel
Corporation Yalian Steel Corporation is a British Columbia
corporation focused on the production of high quality
Longitudinally Submerged Arc Welded (LSAW) steel pipe to service
Asia's rapidly growing energy transportation infrastructure market.
The Company has recently completed construction of its initial
manufacturing facility in city of Yangzhou, in the Jiangsu province
of China. The Company's production line has a rated capacity of up
to 200,000 metric tons per year, depending on product and mix
specifications. The Yangzhou Yalian plant utilizes the JCOE (J-ing,
C-ing, O-ing, Expanding) process, an advanced method of LSAW pipe
production that involves the bending and shaping of X-70 and higher
grade steel. For further company information please access our
website: www.yaliansteel.com Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this press release. This press release
contains forward-looking statements based on current expectations.
These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially
from those reflected in these forward-looking statements. Risks and
uncertainties about Yalian's business are more fully discussed in
the Company's disclosure materials filed with the securities
regulatory authorities in Canada. All amounts are stated in
Canadian dollars unless noted otherwise. pYALIAN STEEL
CORPORATION/p pMurray G. Flanigan, Chief Financial Officerbr/Tel.
No.: (604) 696-6388/p
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