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TSX Venture: ABC
TORONTO, July 7 /CNW/ - Asia Bio-Chem Group Corp. (TSXV: ABC) (the "Company") today announced that it has filed with applicable Canadian securities regulatory authorities interim financial statements for the period ending March 31, 2008 of its wholly-owned subsidiary, Asia Bio-Chem Group Company, Ltd. ("Asia Bio"). The interim financial statements have been filed pursuant to applicable Canadian securities laws following completion of the Company's acquisition of Asia Bio, which was completed effective June 19, 2008. Going forward, and following the change to the Company's year-end to December 31, the Company will be reporting its interim results on a consolidated basis to include those of Asia Bio.
Asia Bio, today reported sales of $19.9 million for the three-month period ended March 31, 2008. Asia Bio reported gross profit of $5.1 million representing 25.6% of sales for the quarter compared with 24.2% for the fiscal year ending December 31, 2007. Asia Bio's EBITDA for the first quarter was $3.9 million while net income was $3.1 million or 15.7% of revenue.
"We continue to see strong demand for our products including improved pricing for our by-products which contributed to our improved gross margins during our first quarter," stated Mr. Zhiping Wang, President and CEO of Asia Bio. Strong demand for cornstarch is driven by China's growing population and the changing diet as a result of the emerging middle class. Further, improved prices for our by-products is driven by the growing demand for cooking oil as well as demand for our animal feed products.
As at March 31, 2008, Asia Bio reported cash of $14.1 million and working capital of $8.8 million. At March 31, 2008, the only loan was a $13.5 million in short term note due to shareholders which was subsequently converted to equity on April 1, 2008. The Company has no current or long term bank debt.
SUMMARY FINANCIAL STATEMENTS Three months ended ($000) March 31, 2008 Sales 19,895 Cost of sales 14,810 ------ Gross profit 5,085 Net income 3,124 EBITDA 3,869 Cash 14,120 Working Capital 8,845 Total assets 41,691
About Asia Bio-Chem Group
The Company, through Asia Bio, its wholly-owned subsidiary in the Peoples Republic of China ("PRC") is in the business of manufacturing cornstarch and related products. From its plant in Liaoning Province, the Company produces approximately 270,000 tonnes of cornstarch, corn germ, gluten and fiber per year for sale into the domestic market in the PRC. The Company's business plan involves the expansion of production capacity either by way of acquisition or construction of new capacity.
This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects,", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.
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