China Wind Systems released its third quarter figures Friday. Net revenues increased to $11.8 million or 47.1 percent from September to September 2008 and gross profits grew 24.8 percent in the same time period to $30 million.
“We are pleased to report strong growth in the sales of our forged wind-power products, which are becoming an increasing part of our revenue mix and which we hope will continue to increase as we begin production at our new facility this month,” said Mr. Jianhua Wu, China Wind Systems chairman and CEO.
Net income was $1.9 million, or 3 cents per diluted share, up 35.7 percent year-over-year from adjusted net income of $1.4 million, or 4 cents per diluted share. Earnings per share were based on a share count of 67.2 million shares for the third quarter of 2008 and 36.6 million shares for the third quarter of 2007.
Revenue from CWSI’s forged rolled rings for wind power and other textile and energy industries increased to $5.3 million or 44.7 percent of net revenues. Wind power represents $2.5 million of that amount.
“From a nominal amount a year ago, our wind power revenues … represent the fastest growing segment of our business due to strong demand for these products,” said Wu.
As of September 30, 2008, the Company had cash and cash equivalents of $700,000 accounts receivable of $4 million and working capital of $2.1 million. During the first nine months of 2008, the company generated $5 million in operating activities and had capital expenditures of $11.6 million, primarily related to its phase one expansion, which it expects to complete in the fourth quarter of 2008.
Beyond the numbers, China Wind Systems also reported that they had signed a letter of intent to supply shafts and gear rims to Hangzhou Advance Gearbox Group, Co. Ltd. The size of any potential contract was not disclosed.
The company has completed equipment installation for the first phase of its expansion plan to increase forged products production, and signed agreements to supply shafts, and other parts for wind turbines.
“The recent economic slowdown has affected various countries, especially the export sector in China,” a CWSI news release states. “We expect to see a decreasing trend in our dyeing and finishing equipment business as the textile industry is impacted by recessions in other countries. Yet, we remain confident with the outlook of our forging business for the wind power industry as the Chinese government has announced that it is committed to supporting wind power in order to reduce the country’s reliance on coal.”
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