China Armco Metals, Inc, a leading ore trading and distribution company in China, today announced its preliminary net income for the year ending December 31st, 2008.
The Company now anticipates its full year net income for the year ended December 31, 2008 will range between $4.4 and $4.7 million. This revised guidance from the previous estimate of $6 million reflects lower than expected revenues due to a global economic slowdown which softened aggregate demand, and created an oversupply of ore in the market. Estimated fourth quarter 2008 net income is now estimated to be approximately $400,000 to $700,000. Based on 8.2 million shares outstanding, full year EPS estimates for 2008 are $0.54 to $0.57 per share.
Mr. Kexuan Yao, CEO of the Company, commented, "The third and fourth quarter can be characterized as the most volatile in both our Company's history and my business career. A combination of decreasing ore prices and a sharp decline in the average cost per ton of steel created an oversupply of ore in the fourth quarter which is still being worked through the system. We were pleased to see the business respond when pricing of ore finally stabilized in December 2008, although this was too late to make a meaningful difference to our fourth quarter financial results. While these results fell short of our expectations, we are pleased with our ability to maintain profitability during such a tumultuous time. We believe this period of price volatility and weak demand will give way to a more stable environment in the coming quarters allowing the Company to deliver measurable growth and profitability during 2009."
The Company remains steadfast in its strategy to capitalize on the recycling demand of producers who have installed arc furnaces and others who have been incentivized by Beijing to modernize operations. The Company expects to launch its one million ton capacity scrap metal facility in the third quarter of 2009. "We are cautiously optimistic about the prospects for iron ore demand, the steel market and China's continued focus on recycling efforts in 2009. We believe the Company is well capitalized and positioned to emerge as a stronger industry player when global markets rebound," added Chairman Yao. Additional details related to industry and business prospects will be included in the Company's 2008 year-end conference call which is expected to be held in March 2009.
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