Chemical products manufacturer Gulf Resources Inc. today announced its financial results for the first quarter of 2009, posting increases in sales revenue and an update to shareholders on its business outlook for the future.
For the three months ended March 31, 2009, Gulf Resources reported a 7.3 percent increase in net revenue at $23.6 million, up from $22.0 million the year prior. Net income for the first quarter was $8.9 million, up 5 percent from $8.4 million the same period of 2008.
Xiaobin Liu, CEO of Gulf Resources, said the companyâ€™s move toward eco-friendly products attributed to its revenues increase.
â€œOur sales revenue increased moderately year-over-year due to the introduction of environmentally friendly chemicals and sales of crude salt, exceeding revenue and net income guidance issued in March 2009,â€ Liu stated in the press release. â€œThe first quarter of the year is usually more modest in terms of sales as our production facilities operate at a lower rate compared to the fourth quarter because of the Chinese New Year holiday. In this quarter, our bromine sales decreased 20.8% year-over-year mainly due to conservative purchase orders from downstream chemical manufacturers as well as lower selling prices of bromine products compared to first quarter of 2008. However, the decrease was offset by increased contribution of our environmentally friendly chemical products and crude salt products that resulted in a higher gross profit margin this quarter compared to the fourth quarter of 2008.â€
The company also informed shareholders of its upcoming plans and business outlook. It announced it will invest roughly $20 million for fiscal 2009 to boost bromine production capacity and to expand and upgrade its existing chemical production lines.
â€œAs prices for chemical products utilizing bromine rebounded in March 2009, we have seen our customers increase their bromine orders, resulting in slightly higher bromine prices,â€ Liu stated. â€œWe expect gross margin for our bromine products to remain flat for the next few months as input costs follow bromine prices. However, we expect to see an increase in overall gross margin over the upcoming quarters as we continue developing our higher margin environmentally friendly oil and gas exploration chemical product business and increasing production of crude salt.â€
For fiscal 2009, Gulf Resources forecasts revenues of about $98 million to $103 million, net income between $27 million and $29 million, and diluted EPS of 22 cents to 24 cents.