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Gulf Resources, Inc. (GURE)
Q1 2013 Results Earnings Call
May 10, 2013 8:00 AM ET
Helen Xu - CEO Assistant
Xiaobin Liu - Chief Executive Officer
Min Li - Chief Financial Officer
Peter Cyrus - Analyst
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Thank you. Ms. Xu, you may begin your conference.
Okay. Thank you, Operator. Good morning, ladies and gentlemen and good evening to those of you, who are joining us from China. And we would like to welcome all of you to Gulf Resources First Quarter 2013 Earnings Conference Call. My name is Helen, the assistant of the company CEO. Our CEO and the CFO of the company, Mr. Xiaobin Liu and Mr. Min Li, who will join this call today.
I will be offering translation for the management’s comment for the company’s operating results. I would like to remind you that for our listener’s attending this call, managements’ remark will contain forward-looking statements, which are subject to risks and uncertainties. The management may make additional forward-looking statement before the company claims the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Actual results may differ from those discussed today depending upon a number of risk factors, including, but not limited to, the general economic and business condition in China. Future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from the existing and new competitors for the bromine and other oilfield, agricultural and flame production chemicals and the change in technology, the ability to make future bromine asset purchases and various other factors beyond the company’s control.
All forward looking statements are expressly qualified in their entirety by these precautionary statements and the risks factors detailed in the company’s reports filed with the SEC. Accordingly, our company believes the expectations reflected in these forward-looking statements are reasonable and there can be no assurance of such will prove to be correct.
In addition, any reference to the company’s future performance represents the company’s estimate as of today the 10th of May, 2013. Gulf Resources assume no obligations to update these projections in the future as market conditions change. For those of you unable to listen to the entire call at this time, a replay will be available for 14 days at the company’s website. The call is also accessible through webcast and the link is accessible through our website. Please look at our press release issued earlier for details.
It is now my pleasure to turn this call to Mr. Liu, the company’s CEO, who is going to provide some initial remarks and then I will do the translation.
First of all, thank you for participating in our first quarter 2013 earnings conference call. Due to the lower demand of bromine as influenced by the continuing macroeconomic tightening policy imposed by the PRC government, the average selling price of bromine decreased from $3,569 per tonne for the first quarter in 2012 to $3,053 per tonne for the same period this year.
We reported lower operating performance in this quarter in comparison to the same period of last year as we were unable to offset the decreasing revenue of bromine segment by those increasing from crude salt and chemical products segments. Cold weather condition in winter and the long holiday for Chinese festival also had some impact on this tighter bromine segments operation.
As we can see that selling price of bromine has increased from $2,954 per tonne to $3,053 per tonne as compared to the fourth quarter of 2012. We believe that the indication increase in demand of bromine from the downstream industrial customers. Therefore we are confident that we can achieve that earnings target set forth in the financial guidance announced in January this year.
Thank you, Mr. Liu. I’m going to continue with presenting the company’s results for the first quarter of 2013 on the behalf of the company’s CEO, Mr. Liu. The slowdown of the economy growth in China have affected the chemical industry, and caused the selling price of bromine to be lower than the same period of last year, due to the weak market demand and with the main factor that caused the company to report a lower performance in the first quarter of this year in comparisons to the last year’s same period.
The average selling price of bromine had decreased from $3,560 per metric ton for the first quarter in 2012 to $3,063 per metric ton for this quarter, representing a decrease of nearly 14 percentage.
However the sales volume of bromine increased from $3,770 ton for the three months period ended March 31, 2012 to $3,843 ton for the same period in 2013, an increase of 2% due to increase in the number of our bromine production plant in recent year.
The average selling price of crude salt increased from $30 -- approximately $38 per ton for three months period ended March 31, 2012 to approximately $39.52 per ton for the same period in 2013, a increase of 4% and sales volume of crude salt also increased by nearly 4% from $59,836 tons for the three months period ended March 31, 2012 to $62,007 tons for the same period in 2013.