VANCOUVER, May 28 /CNW/ - Yalian Steel Corporation (TSX-V: YL) ("Yalian" or the "Company") today announced its financial and operating results for the three and six month periods ended March 31, 2010. Yalian (formerly China Drill Corporation) was incorporated in June 2007, completed its qualifying transaction and began trading as a public company in December 2008. Yalian reports its results in Canadian dollars, as reported here, unless otherwise stated.
For the three month period ended March 31, 2010, Yalian reported revenues of $309,663; cost of sales of $352,270; expenses of $863,330 and other income of $143,306 (comprising a foreign currency exchange gain of $92,491 and interest income of $50,815). Net loss for the three month period was $762,631, or $0.01 per share. After accounting for an unrealized foreign currency translation loss of $1,421,147, the comprehensive loss for the period was $2,183,778.
For the six month period ended March 31, 2010, Yalian reported revenues of $312,103; cost of sales of $355,046; expenses of $1,933,460 and other income of $447,735 (comprising government grants of $230,250, a foreign currency exchange gain of $124,606 and interest income of $92,879). Net loss for the six month period was $1,528,668, or $0.02 per share. After accounting for an unrealized foreign currency translation loss of $2,543,454, the comprehensive loss for the period was $4,072,122.
As at March 31, 2010, cash and cash equivalents were $13,895,048, inventory was $358,897, prepaid expenses were $8,794,248, the amount receivable was $2,614,782, prepayments for property plant and equipment totaled $158,083, property plant and equipment was $58,403,782 and the Company's working capital position was $10,873,465. The long-term loans with the Agricultural Bank of China and Bank of China (Canada), net of financing costs, were $25,571,259 and deferred government grant was $5,505,040. Accounts payable and accrued liabilities totaled $9,260,676. Total shareholders' equity was $43,956,609.
Operational and Business Highlights
During the three and six month periods ended March 31, 2010, Yalian achieved a number of operational and business milestones including:
On February 22, 2010, the Company announced that its 100% wholly owned subsidiary, Yangzhou Yalian Steel Pipe Co., Ltd ("Yangzhou Yalian") received approval from the American Petroleum Institute for certification and license registration of "5L X-70 Grade" for its high grade steel large diameter pipe mill and is in the process of applying for additional certification of X-80 grade and higher.
On March 24, 2010, Yangzhou Yalian received an A1 Grade production license from the State General Administration of the PRC for Quality Supervision, Inspection and Quarantine. The "A1 Grade" is the highest production license available and permits Yangzhou Yalian to manufacture LSAW pipes for all grades of steel to be manufactured and sold within the PRC.
As at March 31, 2010, all necessary permits, licenses and industry certifications had been received by Yangzhou Yalian allowing the Company to begin commercial operations. In addition, the Company had received and installed all of its plant equipment and was approximately 90% complete in its final installation, testing and commissioning procedures. The Company also completed the planning and design phase of a new anti-corrosion line to be built before the end of fiscal 2010 at an expected cost of $5,300,000.
Subsequent to the end of this quarter, the Company announced the planned and expected resignation of its Acting CEO, Mr. Edward (Bud) M. Siegel Jr., in accordance with Mr. Siegel's employment contract. The Company announced that it was in the process of recruiting a permanent CEO to replace Mr. Siegel and that the Company's Vice President, Operations, Ms. Xia Xu, would be temporarily assuming the CEO's duties pending the appointment of a new CEO.
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 first production line has a capacity of up to 200,000 metric tons per year. 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.
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.
This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Yalian's business are more fully discussed in the Company's disclosure materials filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars unless noted otherwise.
SOURCE YALIAN STEEL CORPORATION
For further information: For further information: YALIAN STEEL CORPORATION, Murray G. Flanigan, Chief Financial Officer, Tel. No.: (604) 696-6388; For further company information please access our website: www.yaliansteel.com