Exhibit 99.1
CONTACT
Edward Wong, Financial Controller
011-852-2810-7205 or fc@chrb.com
FOR IMMEDIATE RELEASE
CHINA NATURAL RESOURCES RELEASES
INTERIM RESULTS OF OPERATIONS
HONG KONG, November 13, 2006 – CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released unaudited interim financial statements for the six months ended June 30, 2006 as follows.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(Amounts in thousands, except share and per share data)
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||||||||
|
| 2006 |
| 2005 |
| 2006 |
| 2006 |
| 2005 |
| 2006 |
| ||||||
|
| RMB |
| RMB |
| US$ |
| RMB |
| RMB |
| US$ |
| ||||||
NET SALES |
|
| 32,526 |
|
| 20,947 |
|
| 4,066 |
|
| 51,664 |
|
| 43,150 |
|
| 6,458 |
|
COST OF SALES |
|
| (8,961 | ) |
| (8,873 | ) |
| (1,120 | ) |
| (17,042 | ) |
| (17,309 | ) |
| (2,130 | ) |
GROSS PROFIT |
|
| 23,565 |
|
| 12,074 |
|
| 2,946 |
|
| 34,622 |
|
| 25,841 |
|
| 4,328 |
|
SELLING, GENERAL AND ADMINISTRATIVE |
|
| (3,715 | ) |
| (1,814 | ) |
| (464 | ) |
| (7,106 | ) |
| (5,439 | ) |
| (888 | ) |
INTEREST INCOME |
|
| 135 |
|
| 240 |
|
| 17 |
|
| 235 |
|
| 270 |
|
| 29 |
|
OTHER INCOME/ (EXPENSE), NET |
|
| 1,083 |
|
| 16 |
|
| 135 |
|
| 4,958 |
|
| (24 | ) |
| 620 |
|
INCOME FROM CONTINUING |
|
| 21,068 |
|
| 10,516 |
|
| 2,634 |
|
| 32,709 |
|
| 20,648 |
|
| 4,089 |
|
INCOME TAXES |
|
| (3,338 | ) |
| (1,570 | ) |
| (417 | ) |
| (4,906 | ) |
| (3,430 | ) |
| (613 | ) |
INCOME FROM CONTINUING |
|
| 17,730 |
|
| 8,946 |
|
| 2,217 |
|
| 27,803 |
|
| 17,218 |
|
| 3,476 |
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued advertising and HARC operations, net |
|
| (212 | ) |
| — |
|
| (27 | ) |
| (486 | ) |
| — |
|
| (61 | ) |
NET INCOME |
|
| 17,518 |
|
| 8,946 |
|
| 2,190 |
|
| 27,317 |
|
| 17,218 |
|
| 3,415 |
|
Other comprehensive income/(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation |
|
| (3 | ) |
| — |
|
| — |
|
| (11 | ) |
| — |
|
| (1 | ) |
COMPREHENSIVE INCOME |
|
| 17,515 |
|
| 8,946 |
|
| 2,190 |
|
| 27,306 |
|
| 17,218 |
|
| 3,414 |
|
INCOME PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
| 1.54 |
|
| 7.17 |
|
| 0.19 |
|
| 2.87 |
|
| 13.80 |
|
| 0.36 |
|
Loss from discontinued operations |
|
| (0.02 | ) |
| — |
|
| — |
|
| (0.05 | ) |
| — |
|
| (0.01 | ) |
|
|
| 1.52 |
|
| 7.17 |
|
| 0.19 |
|
| 2.82 |
|
| 13.80 |
|
| 0.35 |
|
INCOME PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
| 1.27 |
|
| 7.17 |
|
| 0.16 |
|
| 2.27 |
|
| 13.80 |
|
| 0.29 |
|
Loss from discontinued operations |
|
| (0.02 | ) |
| — |
|
| — |
|
| (0.04 | ) |
| — |
|
| (0.01 | ) |
|
|
| 1.25 |
|
| 7.17 |
|
| 0.16 |
|
| 2.23 |
|
| 13.80 |
|
| 0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 11,548,416 |
|
| 1,247,823 |
|
| 11,548,416 |
|
| 9,670,407 |
|
| 1,247,823 |
|
| 9,670,407 |
|
Diluted |
|
| 13,959,662 |
|
| 1,247,823 |
|
| 13,959,662 |
|
| 12,240,535 |
|
| 1,247,823 |
|
| 12,240,535 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2006 AND DECEMBER 31, 2005
(Amounts in thousands, except share and per share data)
|
|
|
|
| June 30, 2006 |
| December 31, 2005 |
| June 30, 2006 |
| |||
|
|
|
|
|
|
|
| ||||||
|
|
|
|
| RMB |
| RMB |
| US$ |
| |||
|
|
|
|
| (Unaudited) |
| (Note) |
| (Unaudited) |
| |||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
| 72,453 |
|
| 41,202 |
|
| 9,057 |
|
Trade receivables |
|
|
|
|
| 502 |
|
| 4,622 |
|
| 63 |
|
Bills receivable |
|
|
|
|
| — |
|
| 450 |
|
| — |
|
Other receivables, deposits and prepayments |
|
|
|
|
| 1,055 |
|
| 422 |
|
| 132 |
|
Amounts due from a related company |
|
|
|
|
| — |
|
| 20,503 |
|
| — |
|
Inventories |
|
|
|
|
| 3,584 |
|
| 3,788 |
|
| 448 |
|
Assets held for sale |
|
|
|
|
| 25,647 |
|
| — |
|
| 3,205 |
|
TOTAL CURRENT ASSETS |
|
|
|
|
| 103,241 |
|
| 70,987 |
|
| 12,905 |
|
PROPERTY AND EQUIPMENT |
|
|
|
|
| 36,294 |
|
| 33,656 |
|
| 4,537 |
|
GOODWILL |
|
|
|
|
| 21,915 |
|
| — |
|
| 2,739 |
|
TOTAL ASSETS |
|
|
|
|
| 161,450 |
|
| 104,643 |
|
| 20,181 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
| 1,011 |
|
| 934 |
|
| 126 |
|
Other payables |
|
|
|
|
| 20,380 |
|
| 18,881 |
|
| 2,548 |
|
Advances from customers |
|
|
|
|
| 7,040 |
|
| 1,174 |
|
| 880 |
|
Accrued liabilities |
|
|
|
|
| 2,437 |
|
| 1,319 |
|
| 305 |
|
Current portion of capital lease |
|
|
|
|
| 70 |
|
| — |
|
| 9 |
|
Amounts due to related parties |
|
|
|
|
| 6,476 |
|
| 6,476 |
|
| 809 |
|
Amounts due to a director |
|
|
|
|
| 13,482 |
|
| 23,644 |
|
| 1,685 |
|
Dividends payable |
|
|
|
|
| 18,040 |
|
| 5 |
|
| 2,255 |
|
Taxes payable |
|
|
|
|
| 4,224 |
|
| 2,545 |
|
| 528 |
|
Liabilities related to assets held for sale |
|
|
|
|
| 2,528 |
|
| — |
|
| 316 |
|
TOTAL CURRENT LIABILITIES |
|
|
|
|
| 75,688 |
|
| 54,978 |
|
| 9,461 |
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized – 200,000,000 shares |
|
|
|
|
| 19,222 |
|
| — |
|
| 2,403 |
|
Additional paid-in capital |
|
|
|
|
| — |
|
| — |
|
| — |
|
Reserves |
|
|
|
|
| 35,359 |
|
| 3,912 |
|
| 4,420 |
|
Retained earnings |
|
|
|
|
| 30,952 |
|
| 45,513 |
|
| 3,869 |
|
Accumulated other comprehensive income |
|
|
|
|
| 229 |
|
| 240 |
|
| 28 |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
|
|
|
| 85,762 |
|
| 49,665 |
|
| 10,720 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ |
|
|
|
|
| 161,450 |
|
| 104,643 |
|
| 20,181 |
|
The condensed consolidated statement of operations and comprehensive income (loss) for the six months ended June 30, 2006 (unaudited) and the condensed consolidated balance sheet as of June 30, 2006 (unaudited) have been prepared in accordance with generally accepted accounting principles in the United States but omit certain financial statements and footnote disclosure that would be included in full financial statements prepared in accordance with GAAP. The condensed consolidated statement of operations and comprehensive income (loss) for the six months ended June 30, 2006 (unaudited) and the condensed consolidated balance sheet as of June 30, 2006 (unaudited) are derived from, and should be read in conjunction with, the Company’s unaudited condensed consolidated financial statements for the six months ended June 30, 2006 and 2005, which was filed with the Securities and Exchange Commission on November 13, 2006 under cover of Form 6 - -K. The results of operations for the six months ended June 30, 2006 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2006.
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 C ompany’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.
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