Gulf Resources Inc【GURE】株式ニュース

Gulf Resources Announces Results for the Second Quarter and Six Months Ended June 30, 2022
Gulf Resources, Inc.
Mon, August 15, 2022 at 1:35 PM

SHOUGUANG, China, Aug. 15, 2022 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we,” or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced financial results for the six and three months ended June 30, 2022

Gulf Resources is pleased to report a second quarter with revenues up 41% and earnings per share of $0.37 despite the interruptions in production caused by COVID-19 circumstances, the overall weakness in the Chinese economy, the continuing fact that closures of bromine and crude salt factories No.2, No.8, and No.10 and the delay in opening the new chemical factory.

Bromine pricing has continued to be strong, the average selling price in the quarter was $7,740. As COVID abates and the Chinese economy begins to recover, the Company believes demand and pricing will continue to increase. Given the economics of our bromine business, this augers well for future profits. With the likelihood of one or more of our closed facilities maybe open and the future completion of our chemical factory, our company expects we will produce strong results in the remainder of 2022 and in future years.

Financial Highlights
For the three-month period ending June 30,2022

Revenues increased 41% to $15,711,714

Gross Profit increased 80% to $7,610,594

Income from operations was $5,109,163 compared to a loss of ($2,382,809)

Net income was $3,901,794 compared to a loss of ($2,703,220).

Earnings per share were $0.37 compared to a loss of $0.26.

For the six-month period ending June 30,2022

Net revenues increased 50% to $24,642,451

Gross profit increased 126% to $11,991,363

Income from operations was $5,044,076 compared to a loss of ($5,664,233)

Net income was $3,781,848 compared to a loss of ($5,205,344)

Earnings per share were $0.36 compared with a loss per share of ($0.50).

Balance Sheet

As of June 30, we had cash of $79,115,431.

Total assets were $298,613,109. Total liabilities were $23,036,454.

Shareholders’ Equity was $275,576,655.

Based on 10,471,924 shares issued and outstanding, book value for Shareholders’ Equity per share was $26.32*.

For the Three Months Ending June 30, 2022.

Bromine Segment
Bromine revenues increased 38% to $13,893,809. The primary contributor to the higher revenues was the increase in the selling price of bromine. During the quarter the average selling price was $7,740 compared to $5,556 in the same quarter of the previous year. There is always a lag in the average selling price compared to the market price as the Company fulfills orders based on when they are received.

During the quarter the Company sold 1,795 tonnes of bromine slightly below the 1,805 in the previous year. During the second quarter of 2022, in order to control COVID, the government made a series of unannounced inspections of our bromine and crude salt facilities, that caused the Company to shut and then reopen its facilities. During the second quarter of 2021, there was one full inspection. The Company believes the inspections in 2022 had a more significant impact on production than did the inspections in 2021.

The cost of revenues in bromine was $6,865,832 representing an increase of $1,312,339 from the same quarter of the previous year.

In this quarter, to comply with new government directives, the Company separated bromine and crude salt into two separate legal entities. With this separation, bromine assets increased to $172.1 million from $138.9 million, while crude salt assets shrank to $10 million from $32.8 million. This caused bromine to receive a higher allocation of expenses than in previous years.

Even with the higher allocation of costs, income from the bromine segment increased 98.5% to $5,325,541 from $2,682,233.

In the quarter, the Company spent $32,822,927mainly in bromine wells, aqueducts and the installation of high and low voltage lines for bromide Wells.

The Company continues to believe it will receive permission to open one of these factories in 2022 and perhaps try its best effort to get another in early 2023.

During the quarter, the Company incurred capital expenditures of $32,822,927 for its bromine segment, which mainly include the cost for bromine wells, aqueducts and the installation of high and low voltage lines for bromide Wells. The Company believes these expenditures may enable it to maintain or slightly increase its utilization in the bromine segment in future quarters.

On August 3,2022, Albemarle, one of the world’s largest producers of bromine stated a press release, “Tight market conditions continue to drive strong demand and favorable pricing” (https://investors.albemarle.com/news-releases/news-release-details/albemarle-reports-strong-second-quarter-sales-growth-raising). Gulf Resources believes the same conditions apply to its business in China.

Crude Salt
Crude salt revenues increased 62% to $1,817,904. There was a 10% increase in production in tonnes and a 47% increase in average selling price. The cost of net revenue decreased by 9% to $1,235,288, largely as a result of the reallocation of costs. Crude salt reported income from operations of $142,968 compared to a loss of $578,435.

Chemicals
Revenues in chemicals were $0. The net loss was ($475,201) vs. a net loss of ($741,312) in the same period of the previous year.

During the quarter, COVID restrictions as well as supply chain issues caused delays in receiving some of the previously ordered machinery and equipment including the waste water treatment and solid waste treatment equipment. The Company is working with its existing suppliers and may identify new suppliers so that it can complete construction of its factory based on the delivery.

To date, the Company has spent $45,584,344 on its new factory. It believes the total cost will approximate $69 million. The Company cannot currently project when construction will be completed and production will begin, but it does not believe the delays will impact the cost of the project or the long-term profitability. The Company will update investors as soon as the waste- water treatment and solid waste treatment equipment is delivered.

Natural Gas Segment
The natural gas segment had $0 revenues and a net loss of ($61,699) roughly equal to the loss in the previous year. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises are allowed to participate in the natural gas production. The Company plans to proceed with its applications for the natural gas and brine project approvals with related government departments until the governmental planning has been finalized.

Other Costs
Direct factory and overhead costs for closed factories were $1,927,297 vs. $1,394,717 in the same period of the previous year.

Corporate costs declined to $67,987 from $3,193,107. In the second quarter of 2021, the Company incurred $3,113,140 in charges for stock grants to management. There were no stock grants in the second quarter of 2022.

Profit & Loss
Net income was $3,901,794 compared to a loss of $2,703,220 in the same quarter of the previous year.

Net income per share was $0.37 compared to a loss of ($0.26).

Foreign Currency Translation Adjustment
For the quarter, the Company had a negative foreign translation adjustment of $16,393,444 versus a positive adjustment of $5,334,236 in the previous year. This adjustment was caused by an approximate 6.1% decline of the RMB vs. the USD. The adjustment impacts all balance sheet translations into U.S. dollars.

Six Months Ending June 30, 2022
Net revenues increased 50% to $24,642,451. Gross profits increased 126% to $11,991,363. General and administration expenses declined 60% to $2,799,590. A major factor impacting results in 2021 was the charge of $3,113,140 for stock grants. Income before taxes was $5,127,164 versus a loss of ($5,592,573). Net income was $3,781,848 vs. a loss of ($5,205,344). Earnings per share were $0.36 vs. a loss of ($0.50).

In Bromine, revenues increased 48% to $22,019,825. Net selling prices increased 39%. Costs increased 19% to $10,786,157. Income from operations increased 376% to $6,674,375 despite the higher allocation of costs as a result of separating salt from bromine. The loss from operations in crude salt was $378,953 vs. a loss of $1,588,020 in the same period of the previous year. Chemical products lost $988,483 and natural gas lost $88,438 as neither business had revenues in the six months.

Cash Flow
We generated $18,492,397 in cash flow from operations versus $7,025,775 in the previous year. We invested $33,217,987 in our bromine business mainly for bromine wells, aqueducts and the installation of high and low voltage lines for bromide Wells. The change in the value of the RMB to the USD caused a reduction in cash and cash equivalents of ($1,642,327) versus a credit of $1,912,746 in the previous year.

Balance Sheet
As of June 30,2022, we had cash of $79,115,431. Total assets were $298,613,109. Total liabilities were $23,036,454., Shareholders’ Equity was $275,576,655. Based on 10,471,924 shares issued and outstanding, book value for Shareholders’ Equity per share was $26.32* and cash per share was $7.56*.

Commentary
“We are very pleased to have reported earnings of $0.37 per share in the second quarter despite the disruptions caused by COVID-19,” Mr. Liu Xiaobin, the CEO of Gulf Resources stated.

“With our new wells and other bromine facilities, we should be able to increase production in the remainder of 2022,” Mr. Miao Naihui,, the Chief Operating Officer, added, Bromine prices continue be strong. Our average selling price in the quarter was $7,740.As COVID abates, we expect increases in demand. The combination of production and higher pricing should lead to improvements in profits from operation in the third quarter and beyond.”

“In addition,” Mr. Miao continued, “we are hopeful one factory will receive approval to reopen in the near future. Because we have already made a lot of work to the factory, we expect further capital expenditures will be mainly within the factory site.

“We are disappointed that COVID and supply chain disruptions have delayed the opening of our Chemical factory,” stated Mr. Liu, the CEO, “but once the waste water and solid waste treatment equipment is delivered, we will update our investors. Based on the market for pharmaceuticals and their by-products as well as the market for other chemicals using bromine, we believe our chemical factory will perform well.”

“We also expect,” Mr. Liu continued, “that we may be able to produce natural gas and bromine in Sichuan Province.”

“We appreciate the patience of our shareholders,” Mr. Liu concluded, “While we are not making projections, based on the current price of bromine, we the expect the remainder of the year will be profitable.”

(*These calculations are based on the number of shares issued and outstanding of 10,471,924 shares as of June 30, 2022)

Conference Call
Gulf Resources management will host a conference call on Monday, August 15, 2022 at 07:30 PM Eastern Time to discuss its second quarter 2022 results ended June 30, 2022.

Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company management team will be available for investor questions following the prepared remarks.

To participate in this live conference call, please dial Toll Free +1(877)545-0320 five to ten minutes prior to the scheduled conference call time. International callers should dial +1(973)-528-0002, and please reference to “Gulf Resources” or Participant Access Code: 360812 while dial in.

The webcasting is also available then, just simply click on the link below:
http://www.gulfresourcesinc.com/news-28.html

A replay of the conference call will be available two hours after the call's completion and expired by Monday, August 22, 2022. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 46362.

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), ShouguangYuxin Chemical Industry Co., Limited ("SYCI"), Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sell crude salt. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.

Gulf Resources Announces Fourth Quarter and Full Year 2021 Financial Results
April 12 2022 - 04:45PM
GlobeNewswire Inc.

Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we,” or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced financial results for the fourth quarter and full fiscal year 2021 ended December 31, 2021.
Highlights:

For the year ending 12/31/2021, revenues were $55,030,586 compared to $28,207,024, an increase of 95%.
Cost of Net Revenue was $27,132,372 compared to $19,415,034, an increase of 40%.
Gross profit was $27,898,214 compared to $8,791,990, an increase of 217%.
Gross margins were 50.7% Vs. 31.2% in the prior year.
Direct labor increased 31% to $10,718,605. General & Administrative expenses decreased by 7% to $9,525,235. Other operating expenses increased $2,358,154.
Profit before taxes improved $14,894,262 from a loss of $9,683,392 to a profit of $5,210,870.
Taxes increased $7,406,689 from a credit of $1,108,471 to a charge of $6,298,218.
The loss after taxes declined 89% to $924,718 from $8,420,044.
Three factors contributed to the net loss: a depreciation expenses of $4,303,266 for closed factories #2,#8, & #10, $2,723,189 for the cancellation of deferred tax assets, and $3,134,080 in compensation charges for shares issued to company management.

By Segment

Bromine

Revenues in bromine increased by 78% to $48,871,396. The increase was due to an increase in volume of 24% and an increase in pricing of 57%.
For 2021, the average selling price of bromine was RMB 42,644. The current price is RMB 55,600.
Costs in bromine increased by 43% to $22,848,348.
Gross profits increased by 182% to $26,023,048 from $9,233,996. Gross profits margins were 53% compared to 37%.
Net income in bromine increased by 727% to $13,364,649 from $1,616,542.
Crude Salt

Revenues in crude salt increased by 101% to $6,080,242. Volume increased 4%. Pricing increased 93.4%. Cost of net revenues increased by 27% to $4,284,024.
Gross profit increased to $1,796,218 from a net loss of ($442,006).
For the fiscal year, the crude salt segment lost $1,078,320 compared to a loss of $3,589,494 in the previous year.
Chemicals & Natural Gas

The Chemical products segment sustained a loss of $2,500,561 roughly in line with the loss of $2,745,297 in the previous year. The chemical business did not operate in 2021.
The natural gas segment sustained a loss of $167,139 in 2021. The natural gas segment did not operate in 2021.
Cash Flow

The Company generated $23,311,169 from operations compared to $9,305,627 in the previous year.
Capital expenditures were $30,093,140 compared to $21,719,369 in the previous year.
The table below reflects the capital expenditures by segment for the full year and for the 4th quarter. (Numbers for the 9 months are from the 10Q of Nov15. 2021).

Capital Expenditures
Bromine($) Crude Salt ($) Chemicals ($) Total($)
2021(A) 18,205,560 2,250,126 9,637,454 30,093,140
9Months(B) 188,529 - 8,371,623 8,560,152
Q4 2021(C) 18,017,031 2,250,126 1,265,831 21,532,988
(A) Information represents are audited by company auditor
(B) “The 9 months” represents the financial results for the nine months ended September 30, 2021 as disclosed in the 10-Q filed on November 15, 2021.
(C) C=A-B
In the fourth quarter, the Company spent approximately $20.3 million on its bromine and crude salt segments, drilling new wells and building new aqueducts.

Balance Sheet
For purposes of calculations, all per share numbers are based on 10,471,924 shares issued and outstanding as of December 31, 2021.

The Company ended the year with cash of $95,767,263. On a per share basis, this equates to $9.15*.
Net cash per share (current assets minus all liabilities) were $81,877,727 or $7.82 per share.
Working capital was $101,545,326 or $9.70* per share.
Shareholders’ equity was $286,639,217 or $27.37* per share.
Fourth Quarter

The results for the fourth quarter of 2021 are calculated by using the reported results for the full year in the 10-K and then subtracting the results filed in the 10-Q for the nine months ended September 30, 2021.

2021 2020 % Change
Net Revenue $20,869,666 $11,807,686 76.7 %
COGS $7,837,512 $6,720,763 16.6 %
Gross Margin $13,032,154 $5,086,923 156.2 %
GP % 62.4 % 43.1 %
Sales & Marketing $18,759 $13,797 36.0 %
Direct Labor & Factory O.H. $5,481,347 $1,284,175 326.8 %
G&A Expenses $1,374,466 $2,942,933 -53.3 %
Income before taxes $3,822,175 $880,195 334.2 %
Taxes $4,935,164 $603,280 718.1 %
Income -$1,112,989 $276,915
In the 4th quarter of 2021 compared to the same period of 2020,

Net revenue increased 76.7%
Gross margin increased 156.2%
Direct labor and factory overhead increased 326.8%
Income from operations increased 350%
Income before taxes increased 334.2%
Taxes increased 718.1%
The Company incurred a loss of $1,112,989 versus a profit in the previous year.
A number of below listed unique accounting factors impacted the fourth quarter.

Depreciation
As can be seen from the table below taken from the 10-K and the 10-Q for September 30, 2021. Depreciation in the fourth quarter was more than $4 million higher than the previous year’s quarter. The main contributory factor was that the depreciation for the three closed factories (#2,#8, and #10) to the fourth quarter.

Depreciation Cost
2021 2020
Full Year 2021 $20,543,425 $15,987,860
9 months $12,316,639 $11,907,702
Q4 $8,226,786 $4,080,158
Difference $4,146,628
Taxes
The second major contributing factor was the tax rate. In the first 9 months, the tax rate approximated the 25% statutory tax rate. In the fourth quarter, the Company took a charge of $2,723,189 for the offset of deferred tax assets.

Subsequent Events

On February 22, 2022, the Company announced that discussions with the government have convinced management that the electricity restrictions are being eased. Accordingly, the Company had contacted its suppliers and will have most of the remainder of the equipment produced and delivered.

2022 Outlook

Bromine & Crude Salt
The Company expects bromine prices to remain at current high levels or even increase. The Company is encouraged by the opportunity in zinc-bromine batteries for power and EVs.

The Company also expects to receive approval to open at least one and potentially more of its closed factories in 2022.

Chemicals
The Company has now ordered most of the equipment for its chemical factory. While some equipment may be delayed because of COVID issues in China, the Company believes installation should be completed near the end of the third quarter 2022. Commercial production may begin during 2023. The Company believes the delay could increase the cost of the project by about $5 million. However, it remains encouraged about the opportunity. The Company will continue to post photographs on its website showing the progress of construction.

Sichuan Project: Natural Gas and Brine:
The company is still waiting for the provincial government of Sichuan to finalize the land and resource planning for Sichuan Province. The company has no assurances on the timing of these plans. However, since the government of China has approved that privately owned enterprises are allowed to participate in the natural gas production and since there is great demand for natural gas in China, the company remains optimistic about this project.

2022 Q1
In the past several years, our facilities have been closed for a majority of the first quarter for environmental reasons and Chinese New Year. As a result, the first quarter always has a lower level of sales and profitability than other quarters. Because the price of bromine has remained high, the company expects Q1 revenues to be higher than those of the previous year. It also expects the loss to be significantly reduced. However, any estimates exclude any potential nonrecurring factors or write-offs.

“We are very encouraged about the continuing high price of bromine,” Mr. Liu Xiaobin, CEO of Gulf Resources stated. “As we noted in our press release, we are seeing new demand for bromine, such as the zinc/bromine batteries and supply remains highly constrained. At these levels, our bromine and crude salt business should be profitable. We also believe we will be able to open at least one of our factories this year.”

“Now that following the electricity restrictions are being eased,” Mr. Liu continued, “we are moving as fast as we can to finish construction and begin test and trial production in our new chemical factory. We expect this factory, which will primarily produce pharmaceutical intermediate products with higher margin. In addition, despite the delays, we remain confident that we will be able to produce natural gas and bromine in Sichuan. Natural gas pricing continues to hit record highs. Our exploration area has significant natural gas resources. This continues to be a potentially very exciting project.”

“Meanwhile,” Mr. Liu concluded, “our balance sheet remains strong and we have the capabilities of taking advantage of new opportunities as they arise.”

(*These calculations are based on the number of shares outstanding of 10,471,924 shares as of December 31, 2021)

Conference Call
Gulf Resources management will host a conference call on Wednesday, April 13, 2022 at 08:30 AM ET to discuss financial results for fourth quarter and full year 2021.

Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company management team will be available for investor questions following the prepared remarks.

To participate in this live conference call, please dial Toll Free +1 (888) 506-0062 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (973) 528-0011, and please reference to “Gulf Resources” or Participant Access Code: 497161 while dial in.

The webcasting is also available then, just simply click on the link below:
http://www.gulfresourcesinc.com/news-28.html

A replay of the conference call will be available two hours after the call's completion and expired by Wednesday, April 20, 2022. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 45205.

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through three wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), ShouguangYuxin Chemical Industry Co., Limited ("SYCI"), and Daying County Haoyuan Chemical Company Limited (“DCHC”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.