Gulf Resources Inc. (OTCBB: GFRE) operates through two wholly owned subsidiaries, Shouguang City Haoyuan Chemical Co. Ltd. and Shouguang Yuxin Chemical Industry Co. Ltd., to produce crude salt and bromine in China. Bromine is used to manufacture a wide variety of compounds in the agricultural industry.
The company recently announced its financial results for the three and six months ended June 30, 2008, posting positive results and strategic agreements. For the second quarter of 2008, Gulf Resources net revenue increased 92 percent to $23.8 million as compared to $12.4 million the same quarter of 2007; gross profit was $9.7 million, up 90 percent from $5.1 million the same period last year; and net income rose to $6.3 million up 103 percent from $3.1 million in 2007.
The company attributes these results to the acquisition of new bromine properties last year, as well as growth in the chemical products segment, paired with favorable exchange rates.
“We are quite pleased with Gulf Resources’ results for the second quarter and the first half of 2008. The strong growth in revenue and net income was the result of the contribution of the five new bromine producing properties acquired in 2007 and early 2008,” Ming Yang, CEO of Gulf Resources stated in the press release. “We have also added additional capacity in our chemical segment that enables Gulf to serve China’s expanding demand for environmentally friendly chemical compounds.”
For the first six months of 2008, revenues were $45.8 million, up 104 percent from $22.5 million in the first six months of 2007; gross profit was posted at $19.1 million, up 109 percent from $9.2 million for the same period last year; and net income was $12.4 million, as compared to $5.7 million for the same period a year ago.
Among other achievements, Gulf Resources signed an agreement with Longteng, the largest privately owned coated art-paper producer in China, in July 2008. Per the agreement, Gulf Resources will supply a variety of custom-produced chemicals for use in the manufacturing of high-quality paper products.
“We plan to build upon our solid results in the first half of the year and will continue to seek opportunities to expand our business both through acquisitions and increased operating efficiencies. Demand for bromine remains strong and we expect that this will continue to be the major area of growth for our company in the future,” Ming Yang stated. “We have also been actively seeking opportunities in our chemical segment and our new capacity will enable us to cater to the increasing demand for environmentally-friendly chemical compounds. We feel that Gulf Resources is well positioned to continue to grow our revenue and net income, ultimately increasing value for our shareholders.”
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