BEIJING, March 26 /PRNewswire-Asia-FirstCall/ -- Sinoenergy Corporation
(Nasdaq: SNEN) ("Sinoenergy" or the "Company"), developer and operator of
retail Compressed Natural Gas (CNG) filling stations in the People's Republic
of China, and a manufacturer of CNG transport truck trailer, CNG filling
station equipment and CNG fuel conversion kits for automobiles, today
announced a further over US$1 million loss for the second quarter ending March
31, making allowance for uncollectible land rental income of Qingdao Sinogas
General Machinery Co., Ltd. ("Sinogas"), the Company's subsidiary.
A portion of Sinoenergy's receivables from Mingcheng Real Estate (listed
under "Other Receivables"), will unlikely to be collected by March 31, 2009.
In compliance with US GAAP, the Company will accrue the RMB 7.5 million as bad
debt. This uncollected rental fee will significantly impact our financial
results for the second quarter ending March 31, 2009.
In addition to the estimated US$1 million loss projected for the second
quarter announced in the earnings press release on February 23, 2009, this
uncollected amount from Mingcheng will add another US$ 1.1 million loss to the
second quarter. The Company's total projected loss for the second quarter
ending March 31, 2009 is now estimated to be over US$ 2 million.
Background Information: On March 1, 2008, Sinogas, the Company's 75%
subsidiary, signed a lease agreement with Qingdao Mingcheng Real Estate Co.,
Ltd ("Mingcheng"), leasing its downtown Qingdao facility to Mingcheng for a
three year term at RMB 40 million per year. The agreement called for quarterly
payments of rent of RMB 10 million from the first calendar quarter of 2008 to
the last calendar quarter of 2010. The rental agreement was disclosed in the
8-K filing dated Mar 31, 2008. However, Mingcheng, to date, has only paid the
first installment of RMB 10 million rent for the first calendar quarter of
2008. Sinogas has not received payments for the second and third calendar
quarters of 2008. Based on continuous discussions with the lessee, the
Company believes it is highly unlikely that Qingdao Mingcheng will fulfill its
contractual obligations to Sinoenergy by March 31, 2009.
"Our facility lessee, Mingcheng, has been adversely affected by the
downturn in the real estate market in China. We are very disappointed with
Mingcheng's lack of progress on the rental payments. We understand that there
are serious problems with Mingcheng's operations and investments in the
current tough real estate market. The Company will be monitoring Mingcheng's
condition very closely in our efforts to recover overdue rental payments.
While this loss is not from Sinoenergy's operating businesses, the loss
nevertheless significantly impacts our net income". Bo Huang, CEO of
Sinoenergy said, "While we are striving to improve our operations, and hoping
for an upturn after the challenging second quarter, but as the Mingcheng case
illustrates, the Company is subject to domestic and even global economic
conditions that are beyond our control."
About Sinoenergy
Sinoenergy is a developer and operator of retail CNG stations as well as a
manufacturer of compressed natural gas (CNG) transport truck trailers, CNG
station equipment, and natural gas fuel conversion kits for automobiles, in
China. In addition to its CNG related products and services, the Company
designs and manufactures a wide variety of customized pressure containers for
use in the petroleum and chemical industries.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to,
future changes in the wholesale and retail price for CNG for vehicles in China;
changes in policy by the national, provincial and municipal government of the
PRC regarding CNG prices, the CNG vehicle industry, the construction and
operation of retail CNG filling stations and related issues; the Company's
ability to raise additional capital to finance the Company's activities; the
effectiveness, profitability, and the marketability of its products; the
future trading of the common stock of the Company; the ability of the Company
to operate as a public company; the period of time for which its current
liquidity will enable the Company to fund its operations; the Company's
ability to protect its proprietary information; general economic and business
conditions; the volatility of the Company's operating results and financial
condition; the Company's ability to attract or retain qualified senior
management personnel and research and development staff; and other risks
detailed in the Company's filings with the Securities and Exchange Commission.
These forward-looking statements involve known and unknown risks and
uncertainties and are based on current expectations, assumptions, estimates
and projections about the companies and the industry. The Company undertakes
no obligation to update forward-looking statements to reflect subsequent
occurring events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the expectations
expressed in these forward looking statements are reasonable, they cannot
assure you that their expectations will turn out to be correct, and investors
are cautioned that actual results may differ materially from the anticipated
results.
For more information, please contact:
Sinoenergy Corporation
Mr. Shiao Ming Sheng, CFO
Phone: +86-10-8492-8149
Email: sheng@sinoenergycorporation.com
Web: http://www.sinoenergycorporation.com
SOURCE Sinoenergy Corporation