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Gulf Resources, Inc. (GURE)
Q2 2013 Earnings Call
August 12, 2013 08:00 am ET
Xiaobin Liu – Chief Executive Officer
Min Li – Chief Financial Officer
Helen Xu – Investor Relations
Dave Shannon – Analyst
John Rawls – Analyst
[Peter Sarik] – Analyst
» Gulf Resources' CEO Discusses Q3 2012 Results - Earnings Call Transcript
» BioAmber's CEO Discusses Q2 2013 Results - Earnings Call Transcript
Okay, thank you Operator. Good morning ladies and gentlemen, and good evening to those of you who are joining us from China. I’d dearly like to welcome all of you to Gulf Resources Q2 2013 Earnings Conference Call. My name is Helen, the sister of the company’s CEO. Our CEO and the CFO of the company, Mr. Xiaobin Liu and Mr. Min Li will also join this call today.
I will be offering translation for the management’s comments for the company’s operating results. I’d like to remind you and all listeners that in this call management’s remarks will contain forward-looking statements which are subject to risks and uncertainties. The management may make additional forward-looking statements. Therefore the company claims the protection of Safe Harbor for Forward-Looking Statements contained in the Private Securities Litigation Reform Act of 1995.
Actual results may differ from those discussed depending upon a number of risk factors, including but not limited to the general economic climate and condition in China, future product development and production capabilities, shipments to our customers, market acceptance of new and existing products, additional contributions from the existing and new competitors for the bromine and other oil fields, the culture and the flame production chemicals and the changing technology; our 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 this precautionary statement and the risk 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 management’s estimates as of today, the 12th of August, 2013. Gulf Resources assumes no obligation to update this protection 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 the webcasting and the link is accessible through our website. Please look at our press release issued earlier for details.
It’s now my pleasure to turn this call to Mr. Liu, the company’s CEO who is going to provide some initial remarks. And I will do the translation for him. Xiaobin?
First of all, thank you for participating in our Q2 2013 earnings conference call. We are pleased to report that the company’s net revenue for Q2 2013 has increased 5% as compared with the same quarter in 2012, which is mainly due to the increase of sales efforts of the company. And compared with the same period in 2012, net sales revenue of 10 product segments largely increased 18%; and the sales volume of bromine increased 13% as well. The selling price of some products also increased.
But due to the acquisition assets we did in the year 2012 and the depreciation and amortization costs, which caused the company’s net income to decrease 6% as compared with the same quarter of 2012. Even the net income of Q1 2013 compared to the same period of 2012 decreased 43% each, so the year-over-year net income decrease in this year has largely slowed down. The company’s operations is turning (inaudible) into a good change.
We are still impacted by China’s macroeconomic conditions. Some of our materials’ prices increased. The average bromine price in this quarter has increased to $3084 a ton as compared to $2954 at end of 2012. Crude salt price is a steadily upward trend which reached $41 a ton in Q2 2013. The gross margin of our chemical product segment also increased to 33% in Q2 2013 as compared to the same period in 2012 at 31%. The company will continually try to expand its sales market interest, its product utilization rate, and decrease management and administration expenses.
We are confident that we can achieve the earnings targets set forth in the financial guidance announced at the beginning of this year.
Thank you, Mr. Liu. I’m going to continue with (inaudible) the company’s results for Q2 2012 on behalf of Mr. Liu, the company’s CEO. The company’s net revenue was $32,853,896 for the three-month period ended June 30, 2013, an increase of approximately $1.5 million as compared to the same period in 2012 which (inaudible) 5%. This increase was primarily due to the growth in our chemical products segment’s products, which increased from $9,995,759 for the three-month period ended June 30, 2012, to $11,750,644 for the same period in 2013; an increase of approximately 18%.
Revenue from the crude salt segment decreased from $3,779,658 for the three-month period ended June 30, 2012, to $3,629,976 for the same period in 2013, a decrease of approximately 4%. Revenue from the bromine products segment slightly decreased from approximately $7.5 million for the three-month period ended June 30, 2012, to approximately $7.5 million for the same period in 2013, a decrease of approximately 0.4%.