(RTTNews) - China Integrated Energy, Inc. (CBEH: News ), a non-state-owned biodiesel producer and distributor in the People's Republic of China, Monday said that it has reached separate agreements to acquire three gas stations distributing gasoline and diesel, bringing its total number of operating gas stations to ten.
The acquired gas stations located near the city of Xi'an, Shaanxi Province, China, namely Andong gas station, Jindou gas station and Xianyang Jinzheng gas station, have a total purchase price of $19¡£0 million¡£ The company expects a combined sales volume of 22,700 tons and total revenue of $19¡£9 million at the end of fiscal 2010 from these stations¡£
The Andong gas station is acquired for a consideration of $6¡£4 million and will be operated under a 20-year lease¡£ The gas station's sales volume for the last twelve months totaled about 6,000 tons of fuel and it generated revenues of $4¡£4 million¡£ The company expects sales volume of about 5,500 tons and revenues of $4¡£8 million from the station for the next fiscal year¡£
Having a total sales volume of about 4,800 tons of gasoline and diesel and revenues of $3¡£5 million during the past twelve months, the Jindou gas station is acquired for a total consideration of $2¡£6 million and it will be operated under a 10-year lease¡£ For the next year, the station is expected to yield about $4¡£8 million in revenues with about 5,500 tons of sales volume¡£
The company acquired all of the assets and 40-year land use rights of Xianyang Jinzheng gas station, which has no previous operation history, for a total consideration of $10 million. The station is expected to sell about 10,000 tons of fuel and generate about $8.8 million in revenues for the next year.
China Integrated Energy further noted that it has still the ability to provide stable supply for each of its ten gas stations. Customers will pay cash with an average inventory turn of 3 days. As of September 30, 2009, average gross margins for its retail gas stations were 13.3%.
The company also anticipates a significant increase in sales volume from its retail gas stations while continuing to expand both gross and operating margins over the next 12 months. Gao Xincheng, chief executive officer of China Integrated Energy, said, "As part of our growth strategy, we plan to lease an additional five to seven gas stations in the next 12 months, which will provide incremental revenues and profitability."
CBEH last traded on Friday at $6.63 on the Nasdaq.
This article comes from: CIPPE.NET detailed reference source