Yalian Steel Corporation (TSX VENTURE: YL) today announced its
financial and operating results for the three and nine months ended
June 30, 2011. 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").
Yalian reports its results in Canadian dollars, as reported here,
unless otherwise stated.
For the three months ended June 30, 2011, Yalian reported
revenues of $10,715,000; cost of sales of $9,865,000; operating
expenses of $756,000 and other expenses (net of income) of
$385,000. Net loss for the three months ended June 30, 2011 was
$292,000, or $0.00 per share.
For the nine months ended June 30, 2011, Yalian reported
revenues of $23,630,000; cost of sales of $22,087,000; operating
expenses of $2,150,000 and other expenses (net of income) of
$640,000. Net loss for the nine months ended June 30, 2011 was
$1,247,000, or $0.01 per share.
As at June 30, 2011, cash and cash equivalents were $1,988,000,
restricted cash was $5,064,000 and the Company had a working
capital deficiency of $7,742,000. Total assets were $89,255,000,
short-term and long-term loans, net of financing costs, were
$33,420,000, and total shareholders' equity was $41,322,000.
As at June 30, 2011, the Company has short-term loans and
current portion of long-term loans due to mature within the next
twelve months in the amount of $24,484,000 (comprising RMB
130,000,000, USD $5,100,000 and $170,000). The Company is currently
making arrangements with banks to renew loans or obtain new short
term loans to repay these obligations. Management is confident of
securing additional loans or other financings which are required in
order to fund its working capital and refinancing needs, both in
the short and long term. However, there can be no assurance that
adequate loans or other financings can be secured.
Operational and Business Highlights
During the quarter ended June 30, 2011, the Company manufactured
and delivered a significantly higher number of sales orders (21,
compared to 15 for the second three-month period ended March 31,
2011 and 8 for the first three-month period ended December 31,
2010). In terms of volume, total sales orders manufactured and
delivered amounted to 11,434 metric tons for the three months ended
June 30, 2011, as compared to 9,243 for the second three-month
period ended March 31, 2011 and 4,130 metric tons for the first
three months ended December 31, 2010. As a result, the Company
reported a positive gross income from its sales.
Construction for the new anti-corrosion coating line is
progressing well, with the plant building now completed and the
installation of the production line scheduled to begin shortly.
Total cost of the project is estimated to be approximately
$8,000,000 and completion is expected to be September 2011.
During the quarter, the Company successfully completed the
certification process and thus was added to the Pre-Approved
Suppliers List of CNPC, a major Chinese oil company. This enables
the Company to bid for projects conducted by CNPC and its related
companies.
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.
This news release contains forward-looking information and
forward-looking statements (collectively "forward looking
statements"), within the meaning of applicable securities laws,
with respect to the ability of the Company to secure additional
loans and other financings, the completion of the anti-corrosion
line and the Company's ability to execute its business plan. Such
forward looking statements are based upon assumptions, and
estimates made by management in light of its experience, current
conditions and its expectations of future developments as well as
other factors which it believes to be reasonable and relevant.
These assumptions include those concerning the availability of
financing and no significant decline in existing general business
and economic conditions. Forward looking statements involve known
and unknown risks, uncertainties and other factors that may cause
our actual results to differ materially from those expressed or
implied in the forward looking statements and, accordingly, readers
should not place undue reliance on those statements. Risks and
uncertainties that may cause actual results to vary include, but
are not limited to, the Company's limited financial resources and
the availability of financing alternatives; changes in general
economic conditions or conditions in the financial market; that the
Company will be able to establish and/or maintain relationships
with key suppliers, customers and strategic partners; and that the
construction of the new anti-corrosion coating line will be
completed in a timely manner and on budget as well as other risks
and uncertainties which are more fully described in the Company's
Management's Discussion and Analysis for the 2010 fiscal year and
in other Company filings with securities and regulatory authorities
which are available at www.sedar.com. Should one or more risks and
uncertainties materialize or should any assumptions prove
incorrect, then actual results could vary materially from those
expressed or implied in the forward looking statements and
accordingly, readers should not place undue reliance on those
statements. Readers are cautioned that the foregoing lists of
risks, uncertainties, assumptions and other factors are not
exhaustive. The forward looking statements contained in this news
release are made as of the date hereof and the Company undertakes
no obligation to update publicly or revise any forward-looking
statements contained herein or in any other documents filed with
securities regulatory authorities, whether as a result of new
information, future events or otherwise, except in accordance with
applicable securities laws.
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.
Contacts: Yalian Steel Corporation Lan Shangguan Chief Financial
Officer (604) 696-6388 www.yaliansteel.com
Yalian Steel Corporation (TSXV:YL)
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