NEW YORK, Nov. 14, 2006 (PRIMEZONE) -- China Natural Gas, Inc. (OTCBB:CHNG), http://www.naturalgaschina.com, a company engaging in the transmission and distribution of natural gas in China to a diverse base of commercial, industrial, wholesale and residential customers, announced financial results for the third quarter and nine months ended September 30, 2006.
Revenue for the third quarter totaled $6.5 million, an increase of 367%, compared to $1.4 million for the third quarter in 2005. The Company reported net income of $2.2 million, an increase of 455%, compared to $396,643 for the third quarter in 2004.
Earnings per share totaled $0.09 for the quarter compared to $0.02 for the same period in 2005, representing a 350% increase. For the 9 months ended September 30 2006, the Company reported earnings per share of $0.15, an increase of 200% compared to $0.05 for the comparable period in 2005.
Mr. Qinan Ji, Chairman and CEO of China Natural Gas commented, "We are pleased to report strong 3rd quarter results. Our efforts to execute our business plan are unfolding and are clearly evident in this quarter's numbers. We believe the combined resources of our management team as well as the increase in the demand for our alternative energy initiatives will continue to enhance the growth of this company. We are optimistic that we will have a total of 21 retail natural gas filling stations by year end."
Recent Highlights:
-- The company has a total of 17 retail natural as filling stations as of November 2006
-- The board of directors has appointed Zhiqiang Wang as a director and vice chairman. Mr. Wang is the former Director of Energy Industry Regulations and Vice Mayor of Xi'an, China's largest western city.
-- The company entered into a natural gas supply agreement with PetroChina Company Ltd. (NYSE: PTR), China's largest oil and gas company. PetroChina will supply the Company with an annual capacity of 150 million cubic meters of natural gas for the Company's Liquefied Natural Gas (LNG) project.
-- 13,000 new residential and commercial customers were signed during the nine months ended September 30, 2006
About China Natural Gas, Inc.
China Natural Gas, Inc. ("CHNG"), a Delaware company, is the first China-based U.S. public natural gas services provider that owns and operates a 120-kilometer-long compressed natural gas pipeline in China's Xi'an area, a fast-growing Chinese city supported by a population of approximately 8 million, and is the "gateway" to the broad Western regions of China. CHNG has three profitable business segments: end user delivery of natural gas services to residential, commercial and industrial customers; wholesale natural gas to retail natural gas filling stations; and retail natural gas at company-owned natural gas filling stations. The city of Xi'an has approximately 20,000 taxis, 3,000 buses and 2,000 special purpose vehicles that are powered by compressed natural gas.
Safe Harbor Statement
Certain forward-looking statements made on this press release are made pursuant to the "safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Potential risks and uncertainties include, but are not limited to the risks described in the company filings with the Securities and Exchange Commission.
CHINA NATURAL GAS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2006
(Unaudited)
ASSETS
----------
CURRENT ASSETS:
Cash & cash equivalents $ 5,031,991
Accounts receivable 316,829
Other receivable 1,831,998
Inventory 298,135
Advances 3,121,797
Prepaid expense 165,628
--------------
Total current assets 10,766,378
PROPERTY AND EQUIPMENT, net 12,162,205
CONTRACTS IN PROGRESS 418,530
CONSTRUCTION IN PROGRESS 2,267,926
--------------
TOTAL ASSETS $ 25,615,039
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable & accrued expense $ 383,617
Other payables 1,310,839
Unearned revenue 518,687
--------------
Total current liabilities 2,213,143
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 per share;
authorized 5,000,000 shares; none
issued --
Common stock, $0.0001 per share;
authorized 30,000,000 shares;
issued and outstanding 24,210,183 2,421
Additional paid-in capital 18,223,911
Cumulative translation adjustment 520,604
Statutory reserve 707,776
Retained earnings 3,947,184
--------------
Total stockholders' equity 23,401,896
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 25,615,039
==============
CHINA NATURAL GAS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
For the For the
Three Month Periods Ended Nine Month Periods Ended
September 30, September 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenue
Natural gas
revenue $5,210,834 $ 406,365 $8,580,236 $1,065,017
Construction /
installation
revenue 1,303,457 986,243 3,445,452 1,649,025
---------- ---------- ---------- ----------
Total revenue 6,514,291 1,392,608 12,025,688 2,714,042
Cost of revenue
Natural gas cost 2,752,594 315,116 4,862,202 830,527
Construction /
installation cost 526,292 345,382 1,368,825 584,772
---------- ---------- ---------- ----------
3,278,886 660,498 6,231,027 1,415,299
---------- ---------- ---------- ----------
Gross profit 3,235,405 732,110 5,794,661 1,298,743
Operating expenses
Selling expenses 366,616 129,353 923,960 299,352
General and
administrative
expenses 270,031 77,097 693,141 132,991
---------- ---------- ---------- ----------
Total operating
expenses 636,647 206,450 1,617,101 432,343
---------- ---------- ---------- ----------
Income from
operations 2,598,758 525,660 4,177,560 866,400
Non-operating income
(expense):
Interest income 2,485 307 7,262 894
Other income
(expense) (4,231) 700 (10,182) (468)
---------- ---------- ---------- ----------
Total non-operating
income (expense) (1,746) 1,007 (2,920) 426
---------- ---------- ---------- ----------
Income before income
tax 2,597,012 526,667 4,174,640 866,826
Income tax 393,226 130,024 633,005 130,024
---------- ---------- ---------- ----------
Net income 2,203,786 396,643 3,541,635 736,802
Other comprehensive
income
Foreign currency
translation gain 258,640 -- 291,857 --
---------- ---------- ---------- ----------
Comprehensive
Income $2,462,426 $ 396,643 $3,833,492 $ 736,802
========== ========== ========== ==========
Weighted average
shares outstanding
Basic 23,931,197 16,000,000 23,759,285 15,975,368
========== ========== ========== ==========
Duiluted 23,931,197 16,000,000 23,759,285 15,975,368
========== ========== ========== ==========
Earnings per share
Basic $ 0.09 $ 0.02 $ 0.15 $ 0.05
========== ========== ========== ==========
Diluted $ 0.09 $ 0.02 $ 0.15 $ 0.05
========== ========== ========== ==========