China Clean Energy Inc. operates through its subsidiaries to produce biodiesel and environmentally friendly specialty-chemical products made from renewable resources in China. The company today reported its financial results for the fourth quarter and fiscal year ended December 31, 2009, posting solid growth and increased demand for its products.
Revenue for the fourth quarter was $4.9 million, up 18.5 percent from the fourth quarter of 2008. The company attributes the increase primarily to the 53.2% year-over-year increase in sales volume of specialty- chemical products.
Gross profit in the fourth quarter of 2009 was $896,933, up 52.4 percent from the comparable quarter of 2008. China Clean Energy said the increase was mostly driven by the 18.5 percent growth in revenue paired with management’s ability to control the growth in cost of sales to only 12.9 percent compared to the fourth quarter of 2008.
Operating expense in the fourth quarter of 2009 was $646,739, down 17.2 percent from $781,275 in the fourth quarter of 2008 due to the lower professional service expenses. Operating income for the quarter was $250,194, compared to an operating loss of $192,566 in the comparable period of 2008.
Net income for the fourth quarter of 2009 was $627,538, or $0.02 per fully-diluted share, compared to a loss of $554,111, or $0.02 per share, in the fourth quarter of 2008.
“We are pleased to report strong fourth quarter revenue growth and margin expansion reflecting an improvement in demand for our products in the back end of the year,” Tai-ming Ou, China Clean Energy’s chairman and CEO stated in the press release. “In addition, our Jiangyin plant started operation on a commercial basis in January 2010, expanding our specialty chemical capacity by 30,000 tons and our biodiesel capacity by 40,000 tons per year respectively. We hope to gradually ramp-up our new capacity during the year and expect to achieve solid organic growth in 2010.”
The company also reported full-year results, posting net revenues for the year at $15.9 million, down 12.3 percent from $18.2 million in 2008.
Gross profit for the full year 2009 was $2.9 million, down 23.8 percent from $3.9 million in 2008.
Operating income for the full year 2009 was $0.9 million, down 22.9 percent from $1.1 million in 2008.
In 2009 the Company recorded a net loss of $0.3 million, or $0.01 per diluted share, compared to the net income of $0.6 million, or $0.02 per diluted share in 2008. Net loss in 2009 includes a $964,391 non-cash charge for warrant liability revaluation and a $404,582 stock-based compensation expense.
China Clean Energy gave expectations for 2010, noting that its new plant in Jiangyin is expected to achieve a ramp- up to full capacity by the end of the year 2010 and 50 percent capacity by the end of second quarter of 2010.
Qu said the company anticipates a ramp in demand and that the Jiangyin plant will allow the company to meet demand with quality products.
“We expect to see more demand from our existing customers. The Jiangyin plant enables us to provide three times more specialty chemicals and four times more biodiesel and with better quality. With the smoothly running operation in our new plant, we are confident to exceed our recently released revenue guidance for the first quarter of 2010 of RMB50 million (approximately $7.3 million), representing an increase of approximately 150% over the comparable period in 2009. The expected sales volume in the first quarter is approximately 4,000 tons for biodiesel and 5,000 tons for specialty chemicals, separately,” Qu stated.