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WINSWAY COKING COAL HOLDINGS LIMITED(Incorporated in the British Virgin Islands with limited liability)
(Stock Code: 1733) PROFIT WARNING AND CLARIFICATION REGARDING MONGOLIAN COAL PRODUCER
The Board wishes to inform the Company's shareholders and potential investors that after a preliminary review of the Group's unaudited consolidated management accounts for the financial year ended 31 December 2012, the Group is expected to record a consolidated loss for the financial year ended 31 December 2012 as compared to a consolidated profit recorded for the financial year ended 31 December 2011.
The information contained in this announcement is based on a preliminary assessment by the Board solely on the basis of the unaudited consolidated management accounts of the Group and the current information available, which have not yet been reviewed nor audited by the independent external auditors of the Company.
The Board also notes the recent press release in relation to the interruption of coal supply by a certain producer in Mongolia which is not one of the Group's suppliers and such interruption is not expected to have any adverse impact on the Group.
The board of directors (the "Board") of Winsway Coking Coal Holdings Limited (the "Company", together with its subsidiaries, the "Group") wishes to inform shareholders and potential investors of the Company that after a preliminary review of the Group's unaudited consolidated management accounts for the financial year ended 31 December 2012, the Group is expected to record a consolidated loss for the financial year ended 31 December 2012 as compared to a consolidated profit recorded for the financial year ended 31 December 2011. The Board has considered the market conditions and other factors that impacted the Group's results compared to the financial year ended 31 December 2011, and believes that the performance is primarily attributable to:
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1. a decrease in the price of and a fall in demand for coking coal in the Company's principal market, the People's Republic of China, in 2012 as a result of a decline in demand from steel mills and coke plants under sluggish economic conditions;
2. an increase in the Group's finance costs due to the issue of senior notes in April 2011; and
3. an increase in the Group's finance costs and transaction expenses due to the acquisition of
Grand Cache Coal Corporation in March 2012.
Whilst the above factors have impacted the financial results of the Company for the financial year ended 31 December 2012, the Board continues to believe that Company is currently well funded with strong cash position and the business operations and financial position of the Group remain sound.
The Company is still in the process of finalizing the annual results of the Group for the financial year ended 31 December 2012. The information contained in this announcement is based on a preliminary assessment by the Board solely on the basis of the unaudited consolidated management accounts of the Group and the current information available, which have not yet been reviewed nor audited by the independent external auditors of the Company. Further details of the Group's performance will be disclosed in the annual results for the financial year ended 31 December 2012 to be published by the Company.
The Board also notes the recent press release in relation to the interruption of coal supply by a certain producer in Mongolia. The Board wishes to clarify that the producer mentioned is not one of the Group's suppliers and such interruption is not expected to have any adverse impact on the Group.
By order of the Board of Winsway Coking Coal Holdings Limited Cao Xinyi
Company Secretary
18 January 2013
As at the date of this announcement, the executive directors of the Company are Mr. Wang Xingchun, Ms. Zhu Hongchan, Mr. Yasuhisa Yamamoto, Mr. Apolonius Struijk and Mr. Cui Yong, the non-executive directors of the Company are Mr. Daniel J. Miller, Mr. Liu Qingchun and Mr. Lu Chuan and the independent non-executive directors of the Company are Mr. James Downing, Mr. Ng Yuk Keung, Mr. Wang Wenfu and Mr. George Jay Hambro.
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