Lots of working capital and good indications of future sales....
Yalian Steel Announces Third Quarter Financial and Operational Results
TSX-V:YL
VANCOUVER, Aug. 27 /CNW/ - Yalian Steel Corporation (TSX-V: YL) todayannounced its consolidated financial and operating results for the threeand 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 apublic company in December 2008. Yalian reports its results in Canadiandollars, as reported here, unless otherwise stated.
For the three month period ended June 30, 2010, Yalian reported revenuesof $211,527; cost of sales of $316,100; expenses of $680,262 and otherloss of $276,707 (comprising a foreign currency exchange loss of$300,754 and interest income of $24,047). Net loss for the three monthperiod was $1,061,542, or
.01 per share. After accounting for anunrealized foreign currency translation gain of $2,514,778, thecomprehensive income for the period was $1,453,236.
For the nine month period ended June 30, 2010, Yalian reported revenuesof $524,609; cost of sales of $673,261; expenses of $2,611,314 and otherincome of $169,487 (comprising government grants of $228,900, a foreigncurrency exchange loss of $176,104 and interest income of $116,691).Net loss for the nine month period was $2,590,479, or
.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 amountreceivable was $3,657,192, prepayments for property plant and equipmenttotaled $6,234,222, property plant and equipment was $54,460,418 and theCompany's working capital position was $15,335,439. The long-term loans,net of financing costs, were $33,662,000 and deferred government grantwas $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, Yalianachieved a number of operational and business milestones including:
In February 2010, Yangzhou Yalian received approval from the AmericanPetroleum Institute for certification and license registration of "5LX-70 Grade" for its high grade steel large diameter pipe mill and is inthe process of applying for additional certification of X-80 grade andhigher.
In March 2010, Yangzhou Yalian received an A1 Grade production licensefrom the State General Administration of the PRC for QualitySupervision, Inspection and Quarantine. The "A1 Grade" is the highestproduction license available and permits Yangzhou Yalian to manufactureLSAW pipes for all grades of steel to be manufactured and sold withinthe PRC. By the end of March 2010, Yangzhou Yalian had received all ofits required permits, licenses and industry certifications necessary tocommence operations in China.
For the quarter ended June 30, 2010, the Company manufactured anddelivered additional test orders and continued to focus its efforts onthe development and expansion of its sales and marketing activitieswithin China. The Company's focus during the quarter has been to buildstrategic alliances with major state owned oil & gas companies withinthe PRC to develop and be accepted into key purchasing networks. Duringthe quarter, the Company qualified and was added to the pre-approvednatural gas vendor lists for Hubei and Jiangsu provinces and is in theprocess of being qualified and added to the natural gas vendor list forGuangdong province. The Company also continues to build relationshipswith a number of major international trading companies and is working toexpand its distribution network within the PRC and abroad. The Companyalso completed the planning and engineering phase of its newanticorrosion line and placed orders with various suppliers to procurethe necessary materials and equipment. The project is expected to costapproximately $5,300,000 and is expected to be completed in earlycalendar 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 onSEDAR at www.sedar.com.