Asia Bio-Chem Group Corp. Announces Second Quarter 2010 Financial Results and
Changtu Plant Upgrade

TSX Venture: ABC

TORONTO, Aug. 13 /CNW/ Asia Bio-Chem Group Corp. (TSXV: ABC) ("Asia Bio-Chem" or the "Company") today announced its interim financial statements for the three month period ending June 30, 2010.

Interim Financial Results

    
    Highlights

       -  During the Second quarter of 2010 the Company achieved 144%
          increase in revenues to $56.9 million and a 170% increase in gross
          profit to $9.6 million compared with the corresponding period of
          2009.

       -  The average production capacity at the Daqing plant during the
          second quarter was 79% bringing the Company's combined capacity
          utilization to 84% during the quarter.

       -  The addition of the Daqing plant coupled with continued improvement
          in product pricing contributed to a 279% increase in EBITDA before
          stock based compensation during the second quarter of 2010 compared
          with the same period in 2009. Net income increased $4.0 million in
          the second quarter of 2010 to $4.5 million compared with the same
          period in 2009.

       -  As at June 30, 2010, the Company had $7.3 million in cash and $52.4
          million in government and bank debt.

       -  The Company also announces that commencing in August it will begin
          the first phase of work on the Changtu Bio Chemical Industrial Park
          project in cooperation with the Changtu county government. The
          initial phase of this project will involve the upgrade and
          relocation of the Changtu facility to improve efficiencies and
          accommodate new customer requirements.
    

"We are pleased to report that our new Daqing facility is running smoothly and contributing to earnings" stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem. "With Daqing up and running, we will use this opportunity to upgrade the Changtu facility to improve cost efficiency through a reduction in energy comsumption and discharge. These improvements will position our company to win business with the largest players in the global market."

With the improved capacity from the Daqing plant, second quarter revenues increased over the first quarter of fiscal 2010 by $16.8 million or 43%. Second quarter gross profit also increased by $2.8 million or 42% compared with the first quarter.

As a percentage of sales, gross margin was 17% during the quarter which was consistent with the first quarter even with a 17% increase in average corn costs experienced during the second quarter.

    
    SUMMARY FINANCIAL STATEMENTS
    in thousands of Canadian dollars
    except per share and percentage data      Three Months Ended
                                           ----------------------------------
                                              June 30,    June 30,
                                                 2010        2009   % Change
                                           ----------- ----------------------
    Sales                                      56,883      23,299     144.1%
    Gross profit                                9,595       3,558     169.6%
    Gross margin (% of Sales)                   16.9%       15.3%
    Operating expenses                          4,272       2,957      44.5%
    Income from operations                      5,323         601     785.7%
    Other income (expense)                       (749)       (107)
    Income taxes                                  115          65
    Net income                                  4,459         430     937.0%
    EBITDA                                      7,003       1,088     543.7%
    EBITDA before stock-based compensation      7,608       2,007     279.1%
    Earnings per share
      Basic                                      0.06        0.01
      Diluted                                    0.06        0.01
    Weighted average number of shares
      Basic                                76,840,529  76,777,025
      Diluted                              78,606,454  76,777,025

    Balance Sheet Highlights                    As at       As at
                                              6/30/10    12/31/09

    Cash                                        7,299      14,119
    Working Capital                             7,686       1,685
    Total assets                              154,930     142,282
    Current Ratio                              1.15:1      1.04:1
    

With the contribution from Daqing together with strong product prices, the Company achieved EBITDA before stock based compensation of $7.6 million during the second quarter, the highest in the Company's history and 40% improvement over the first quarter.

During the first six months of 2010, the Company's cash position declined to $7.3 million as at June 30, 2010 primarily due to increased working capital requirements including higher deposits on corn purchases.

Daqing Update

Production at Daqing has improved during the second quarter with the average corn processing capacity utilization reaching 79% during the quarter.

As stated, in previous announcements, the Company is expanding its loading system at the Daqing plant to accommodate bi-modal container cars. This expansion is expected to increase throughput at the dock and therefore allow the plant to run at a higher capacity. In addition, this expansion will improve the rail-to-ship transfer and therefore allow quicker delivery to our customers. The Company expects to complete this project before the end of October.

Based on the above initiatives, management expects to achieve continued improvements in capacity utilization at its Daqing plant over the coming months.

Changtu Corn Bio Chemical Project

Beginning in the third quarter of this year the Company will begin work on the Changtu Corn Bio Chemical Industrial Park which has been established in cooperation with the Changtu county government. Upon completion, the project will include a total of 900,000 tonnes of corn processing representing 600,000 tonnes of net new corn processing capacity .

The first phase ("Phase 1") of this project will include an upgrade of our Changtu plant in the area of evaporation, dewatering and packaging. These upgrades will improve efficiencies by reducing steam, electricity and water usage. Also by undertaking these upgrades the Company will satisfy the latest standards of the international food and beverage industry and allow the Company to qualify for larger contracts. Phase 1 of the project will also include the relocation of the Changtu facility to a new 190,000 square meter parcel of land which will be granted to the Company by the government. The county has made significant investments into the new location which is 7.5 km from the existing Changtu plant. The existing Changtu facility will remain the property of the company and serve as a storage facility to allow the Company to manage more of its own grain supply for the new project.

The Phase 1 (upgrade and relocation) will cost the company approximately RMB 80 million ($12 million) which will be funded by cash flow and bank debt. Phase 1 of the project will begin on August 15, 2010 and is expected to be completed by mid November 2010, after which, the company will resume production from the new location. The relocation process is expected to result in a 90 day reduction in capacity during the third and fourth quarter. To supplement the Daqing capacity, the Company is building inventory ahead of the relocation period.

Conference Call

Asia Bio-Chem will be hosting a conference call to discuss the third quarter results at 10 am Monday, August 16, 2009. The details are as follows:

    
    Dial in number:       1-888-231-8191 or 647-427-7450

    Conference ID and
    Replay passes code:   92366763

    Taped Replay:         1-800.642.1687 or 416.849.0833
                          (available until August 30th, 2010)
    

About Asia Bio-Chem Group Corp.

Asia Bio-Chem Group, through its wholly-owned subsidiaries in the Peoples Republic of China ("PRC") is in the business of manufacturing cornstarch and related byproducts. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 900,000 tonnes of corn. The Company products include cornstarch, corn germ, gluten and fiber which are sold into the domestic Chinese market.

This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects,", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

    
    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS
    RELEASE.
    

SOURCE Asia Bio-Chem Group Corp.

For further information: For further information: For Corporate Information: Asia Bio-Chem Group Corp., Suite 2105 - 130, Adelaide Street West, Toronto, Ontario, M5H 3P5, Attention: Robert Wilson, Tel: 416-603-7500

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Asia Bio-Chem Group Corp.

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