CHNR China Natural Resources Inc

HONG KONG, Dec. 2 /PRNewswire-FirstCall/ -- CHINA NATURAL RESOURCES, INC. (NASDAQ:CHNR), a company based in the People's Republic of China, today released unaudited interim financial statements for the three and six months ended June 30, 2009 as follows: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (Amounts in thousands, except share and per share data) Three Months Ended June 30 -------------------------- 2008 2009 2009 ---- ---- ---- RMB RMB US$ NET SALES 29,722 12,999 1,903 COST OF SALES (12,141) (12,371) (1,811) ------- ------- ------ GROSS PROFIT 17,581 628 92 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including share-based compensation expense of RMB13,008 (US$1,904) for the six months ended June 30, 2009 (2008: RMB13,008) and RMB6,504 (US$952) for the three months ended June 30, 2009 (2008: RMB6,504) (9,157) (12,870) (1,884) ------ ------- ------ OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS 8,424 (12,242) (1,792) INTEREST INCOME 372 65 9 OTHER INCOME, NET 67 - - LOSS ATTRIBUTABLE TO INVESTMENT IN UNCONSOLIDATED INVESTEE (2,306) (2,960) (433) ------ ------ ---- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 6,557 (15,137) (2,216) INCOME TAXES (4,304) (714) (105) ------ ---- ---- INCOME (LOSS) FROM CONTINUING OPERATIONS 2,253 (15,851) (2,321) DISCONTINUED OPERATIONS INCOME (LOSS) FROM DISCONTINUED OPERATIONS 20,207 5 1 ------ --- --- NET INCOME (LOSS) 22,460 (15,846) (2,320) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments Attributable to CHNR Shareholders (3,504) (60) (9) Attributable to non- controlling interests - - - --- --- --- COMPREHENSIVE INCOME (LOSS) 18,956 (15,906) (2,329) Less comprehensive loss attributable to non- controlling interests - 833 122 --- --- --- COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHNR SHAREHOLDERS 18,956 (15,073) (2,207) ====== ======= ====== NET INCOME (LOSS) ATTRIBUTABLE TO: CHNR Shareholders 22,460 (15,013) (2,198) Non-controlling interests - (833) (122) --- ---- ---- 22,460 (15,846) (2,320) ====== ======= ====== NET INCOME (LOSS) ATTRIBUTABLE TO CHNR SHAREHOLDERS: Continuing operations 2,253 (15,016) (2,198) Discontinued operations 20,207 3 - ------ --- --- 22,460 (15,013) (2,198) ====== ======= ====== INCOME (LOSS) PER SHARE: Basic Income (loss) from continuing operations 0.12 (0.71) (0.10) Income (loss) from discontinued operations 1.05 - - ---- --- --- Net income (loss) per share 1.17 (0.71) (0.10) ==== ===== ===== Diluted Income (loss) from continuing operations 0.10 (0.71) (0.10) Income (loss) from discontinued operations 0.88 - - ---- --- --- Net income (loss) per share 0.98 (0.71) (0.10) ==== ===== ===== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING Basic 19,323,416 21,123,416 21,123,416 ========== ========== ========== Diluted 22,926,151 21,123,416 21,123,416 ========== ========== ========== Six Months Ended June 30 ------------------------ 2008 2009 2009 ---- ---- ---- RMB RMB US$ NET SALES 38,268 17,563 2,571 COST OF SALES (16,023) (16,268) (2,381) ------- ------- ------ GROSS PROFIT 22,245 1,295 190 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, including share-based compensation expense of RMB13,008 (US$1,904) for the six months ended June 30, 2009 (2008: RMB13,008) and RMB6,504 (US$952) for the three months ended June 30, 2009 (2008: RMB6,504) (21,658) (26,409) (3,867) ------- ------- ------ OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS 587 (25,114) (3,677) INTEREST INCOME 1,121 421 61 OTHER INCOME, NET 48 529 78 LOSS ATTRIBUTABLE TO INVESTMENT IN UNCONSOLIDATED INVESTEE (4,437) (5,665) (829) ------ ------ ---- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (2,681) (29,829) (4,367) INCOME TAXES (4,941) (1,266) (185) ------ ------ ---- INCOME (LOSS) FROM CONTINUING OPERATIONS (7,622) (31,095) (4,552) DISCONTINUED OPERATIONS INCOME (LOSS) FROM DISCONTINUED OPERATIONS 24,451 (15,052) (2,204) ------ ------- ------ NET INCOME (LOSS) 16,829 (46,147) (6,756) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments Attributable to CHNR Shareholders (15,753) 438 64 Attributable to non- controlling interests - - - --- --- --- COMPREHENSIVE INCOME (LOSS) 1,076 (45,709) (6,692) Less comprehensive loss attributable to non- controlling interests - 7,567 1,108 --- ----- ----- COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHNR SHAREHOLDERS 1,076 (38,142) (5,584) ===== ======= ====== NET INCOME (LOSS) ATTRIBUTABLE TO: CHNR Shareholders 16,829 (38,580) (5,648) Non-controlling interests - (7,567) (1,108) --- ------ ------ 16,829 (46,147) (6,756) ====== ======= ====== NET INCOME (LOSS) ATTRIBUTABLE TO CHNR SHAREHOLDERS: Continuing operations (7,622) (29,549) (4,326) Discontinued operations 24,451 (9,031) (1,322) ------ ------ ------ 16,829 (38,580) (5,648) ====== ======= ====== INCOME (LOSS) PER SHARE: Basic Income (loss) from continuing operations (0.40) (1.42) (0.21) Income (loss) from discontinued operations 1.29 (0.43) (0.06) ---- ----- ----- Net income (loss) per share 0.89 (1.85) (0.27) ==== ===== ===== Diluted Income (loss) from continuing operations (0.34) (1.42) (0.21) Income (loss) from discontinued operations 1.10 (0.43) (0.06) ---- ----- ----- Net income (loss) per share 0.76 (1.85) (0.27) ==== ===== ===== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING Basic 18,982,757 20,883,085 20,883,085 ========== ========== ========== Diluted 22,235,670 20,883,085 20,883,085 ========== ========== ========== CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2009 AND DECEMBER 31, 2008 (Amounts in thousands, except share and per share data) December 31, June 30, June 30, 2008 2009 2009 RMB RMB US$ (Unaudited) (Unaudited) ASSETS CURRENT ASSETS Cash 120,888 158,504 23,205 Trade receivables: Related parties 70,830 - - Others 4,157 1,755 257 Bills receivable 1,460 - - Note receivable 96,166 - - Inventories 66,245 5,614 822 Deferred tax assets 5,470 966 141 Other assets 25,061 42,670 6,247 ------ ------ ----- 390,277 209,509 30,672 ASSETS CLASSIFIED AS HELD FOR SALE - 442,543 64,790 --- ------- ------ TOTAL CURRENT ASSETS 390,277 652,052 95,462 INVESTMENT IN UNCONSOLIDATED INVESTEES 22,210 17,489 2,560 ADVANCES TO UNCONSOLIDATED INVESTEES, NET 39,290 38,346 5,614 PROPERTY AND EQUIPMENT, NET 238,591 185,545 27,164 DEPOSITS FOR BUSINESS ACQUISITIONS AND OTHER 119,741 48,119 7,045 ------- ------ ----- TOTAL ASSETS 810,109 941,551 137,845 ======= ======= ======= LIABILITIES AND EQUITY CURRENT LIABILITIES Bills payable - 10,000 1,464 Accounts payable 7,361 17,100 2,504 Advance from customers 15,261 2,781 407 Accrued liabilities 8,014 3,001 439 Income tax and other taxes payable 12,368 1,192 175 Other payables 25,485 26,933 3,943 Current portion of related party capital lease obligation 9,977 - - Related party payable 18,316 168,396 24,654 ------ ------- ------ 96,782 229,403 33,586 LIABILITIES ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE - 107,174 15,690 --- ------- ------ TOTAL CURRENT LIABILITIES 96,782 336,577 49,276 ------ ------- ------ NON CURRENT LIABILITIES Related party capital lease obligation, net of current portion 10,780 - - Long term loan - 100,000 14,640 Other payables 10,087 82,612 12,095 ------ ------ ------ TOTAL NON-CURRENT LIABILITIES 20,867 182,612 26,735 ------ ------- ------ TOTAL LIABILITIES 117,649 519,189 76,011 ------- ------- ------ EQUITY China Natural Resources, Inc. equity: Preferred shares, no par: Authorized -10,000,000 shares; - - - Common shares, no par: Authorized -200,000,000 shares; Issued and outstanding - 19,623,416 and 21,123,416 shares at December 31, 2008 and June 30, 2009, respectively 312,081 312,081 45,689 Reserves 7,331 7,331 1,073 Additional paid-in capital 228,752 288,159 42,187 Excess of purchase price over net asset value (7,149) (313,139) (45,844) Retained earnings 173,087 134,507 19,692 Other comprehensive loss (35,561) (35,123) (5,142) ------- ------- ------ TOTAL CHINA NATURAL RESOURCES, INC. EQUITY 678,541 393,816 57,655 NON-CONTROLLING INTERESTS 13,919 28,546 4,179 ------ ------ ----- TOTAL LIABILITIES AND EQUITY 810,109 941,551 137,845 ======= ======= ======= Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2009 interim results "the first half of 2009 posted a challenge to the operation of China Natural Resources. The global financial crisis caused the PRC economy to slow down sharply. Base metal prices fell in general as compared to the first half of 2008 amid slowing industrial production. However, China is expected to recover at a faster pace than other countries, and our mining operations are poised to benefit from the mainland's growth prospects and supportive policies. The China economy grew 7.9% year on year in the second quarter which suggests that the China economy is expanding and steel demand from downstream customers is recovering. We expect ore prices to rise in 2010 as demand for steel recovers and a rebound in industrial production growth. We remain committed to our strategy in expanding our coal and base metal resources in the PRC." For the convenience of the reader, amounts in Renminbi ("RMB") have been translated into United States dollars ("US$") at the applicable rate of US$1.00 = RMB6.8305 as quoted by Bloomberg Finance L.P. as of June 30, 2009. The Renminbi is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all. The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) have been prepared in accordance with generally accepted accounting principles in the United States but omit certain financial statements and note disclosure that would be included in full financial statements prepared in accordance with US GAAP. The condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2009 (unaudited) and the condensed consolidated balance sheet as of June 30, 2009 (unaudited) are derived from, and should be read in conjunction with, the Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2009 and 2008, which was filed with the Securities and Exchange Commission on December 2, 2009 under cover of Form 6-K. The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2009. About China Natural Resources, Inc. China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People's Republic of China, is currently engaged in (a) the acquisition and exploitation of mining rights, including the exploration, mineral extraction, processing and sale of iron, zinc and other nonferrous metals, extracted or produced at mines primarily located in Anhui Province in the PRC, and (b) the acquisition, exploration, development and production of coal resources in Guizhou province in the PRC. This press release includes forward-looking statements within the meaning of federal securities laws. These forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People's Republic of China, risks and hazards associated with the Company's mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company's reliance on third-party contractors and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Although the Company's management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate. DATASOURCE: China Natural Resources, Inc. CONTACT: Edward Wong, Chief Financial Officer, +011-852-2810-7205 or

Copyright