The company reported a 41 percent increase in revenue to $63.3 million, up from $44.9 million for the same period of 2008. RINO attributes the increase to product demand and a significant increase in wastewater treatment and anti-oxidation systems and coating sales.
“The third quarter continued our momentum as we executed on our growth plan while making further improvements in all of our key financial metrics,” Zou Dejun, president and CEO of RINO stated in the press release. “This was the first quarter we saw meaningful uptake by customers for our anti-oxidation systems. During the quarter we performed work on a total of 12 FGD desulphurization systems, five wastewater treatment systems and installed seven anti-oxidation systems for a total of 23 customers. We are excited about our DXT desulphurization system which we believe will enable us to cement our position as the leader in this particular FGD application, while providing a strong conduit for growth during the next few years as adoption accelerates.
He continued, “In addition, our backlog as of September 30, 2009, was approximately $52.7 million, which represents six desulphurization, four wastewater treatment and six anti-oxidation projects. We believe our collective growth initiatives will continue to provide incremental and robust top-line and bottom line growth and we currently expect to surpass our previous revenue estimate of $176.5 million for 2009.”
The Company recognized $33.3 million in desulphurization revenues, down 11.8 percent from the third quarter of 2008; $15.1 million in wastewater treatment system sales, up 241.9 percent from the third quarter of 2008; and $13.8 million in anti-oxidation equipment and coatings, more than eight times the sales compared to the same year ago period. Additionally, the company recorded $1.1 million in machining service revenues.
The company reported gross profit at $26.1 million in the third quarter of 2009, a 27.1 percent increase from $20.6 million for the same period in 2008, representing gross margins of approximately 41.3 percent and 45.8 percent, respectively.
Dejun said the company is benefiting from federal desulphurization requirements, which are also supported by the Chinese Ministry of Industry and Information Technology.
“Our business continues to be driven by a number of factors centered around government mandates stipulating that iron and steel manufacturers be equipped with desulphurization systems. The Chinese Ministry of Industry and Information Technology showed its commitment to support this initiative by publishing a formal plan on July 31, 2009, which prioritizes steel FGD installations, sets specific desulphurization guidelines and targets, while offering priority funding by both the central and local governments and further support for domestic based technology,” Dejun stated.
Dejun concluded by noting that the company anticipates continued growth in the upcoming year based on the mandates.
“This is the single most important regulatory event since our Company was formed and clears a path toward doubling the number of sinters to be equipped with FGD systems annually through 2011. We expect that growth from our FGD system installations, in addition to the large Sludge Treatment System for the Dalian Government, will drive further growth during 2010,” he stated.