Gulf Resources reports significant revenue decline and operating losses for Q3 and YTD 2024, amidst strategic operational adjustments.
Quiver AI Summary
Gulf Resources, Inc. announced its unaudited financial results for the quarter and nine months ending September 30, 2024, reporting significant declines in revenue and increases in net losses compared to the previous year. Specifically, the third quarter revenues dropped 61.8% to $2.2 million, with a net loss of $3.5 million, while revenues for the nine-month period fell 74.4% to $5.9 million, leading to a net loss of $40.6 million. The declines were attributed mainly to reduced revenues from bromine and crude salt operations, coupled with operational losses in other segments. The company’s cash position decreased sharply, and management expressed regret over delays in filing financial reports. CEO Mr. Liu Xiaobin indicated a cautious optimism regarding China's economic recovery and mentioned strategic postponements on equipment delivery and investments to better align with market conditions. A conference call is scheduled for November 20, 2024, to further discuss these results and future strategies.
Potential Positives
- Management expressed confidence in China's economic recovery and the company's potential return to profitability, signaling optimism for future growth.
- The company is actively seeking additional land for salt fields and bromine wells, suggesting potential growth opportunities in these areas.
- Participation in a government flood prevention program could lead to enhanced operational safety and the capability to drill more wells, which may improve future production capacity.
Potential Negatives
- Significant decline in revenues, with a 61.8% decrease in the third quarter compared to the previous year, indicating potential issues with demand and market share.
- Substantial net loss of $40,582,933 for the nine months ended September 30, 2024, which raises concerns about the company's financial health and sustainability.
- Cash position decreased dramatically from $72,223,894 to $11,237,493, suggesting liquidity challenges and potential difficulties in meeting operational expenses or investments.
FAQ
What were Gulf Resources' revenues for Q3 2024?
Gulf Resources reported revenues of $2,242,365 for the third quarter of 2024, a decline of 61.8% from 2023.
How much was the net loss for Gulf Resources in 2024?
The Company incurred a net loss of $40,582,933 for the nine months ended September 30, 2024.
What caused the drop in bromine revenues?
Bromine revenues declined by 68% to $1,571,313 due to challenging market conditions.
When is Gulf Resources' next conference call?
Gulf Resources will host a conference call on November 20, 2024, at 08:00 AM Eastern Time.
What actions are being taken by Gulf Resources for recovery?
Management is optimistic about China's economic recovery and has postponed equipment deliveries to assess industry opportunities.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$GURE Hedge Fund Activity
We have seen 1 institutional investors add shares of $GURE stock to their portfolio, and 8 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- SUSQUEHANNA INTERNATIONAL GROUP, LLP removed 29,537 shares (-100.0%) from their portfolio in Q3 2024
- RENAISSANCE TECHNOLOGIES LLC removed 10,300 shares (-6.2%) from their portfolio in Q3 2024
- CITADEL ADVISORS LLC removed 7,129 shares (-100.0%) from their portfolio in Q2 2024
- UBS GROUP AG removed 5,701 shares (-100.0%) from their portfolio in Q3 2024
- NBC SECURITIES, INC. removed 450 shares (-100.0%) from their portfolio in Q2 2024
- LARSON FINANCIAL GROUP LLC added 400 shares (+inf%) to their portfolio in Q3 2024
- BRIDGEWAY CAPITAL MANAGEMENT, LLC removed 242 shares (-0.2%) from their portfolio in Q3 2024
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
SHOUGUANG, China, Nov. 19, 2024 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we,” or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China today announced its unaudited financial results for the nine and three months ended September 30, 2024.
Three Months ended September 30, 2024:
- Revenues for the third quarter were $2,242,365, a decline of 61.8% compared to the same period of 2023.
- The net loss was $3,492,883, and the basic and diluted loss was $0.33 per share.
- During the third quarter, bromine revenues declined by 68% to $1,571,313 and crude salt revenues declined by 26% to $654,039.
- Bromine operation loss was $4,029,999, while crude salt operation loss was $102,657.
- The losses from operations from our currently inactive chemical and natural gas businesses were $339,038 and $39,072, respectively.
Nine Months ended September 30, 2024:
- For the nine months, revenues were $5,932,596, a decline of 74.4% compared to the same period of 2023.
- Losses from operations by segment were as follows: bromine - $13,475,400, crude salt - $47,725, chemicals - $993,116, and natural Gas -$140,554.
- The net loss was $40,582,933, and basic and diluted loss was $3.78 per share.
- We incurred a loss of $29,169,008 from the disposition of equipment and purchased $60,526,213 worth of new equipment.
- Our cash position declined to $11,237,493 from $72,223,894 as of December 31, 2023.
- Total assets at the end of the third quarter was $193,885,294.
Management Commentary
We regret that the changes in auditors caused delays in filing the 2023 10-K and 2024 10-Q reports on time. We acknowledge the importance of providing investors with information needed to understand our financial position and the decisions made by the management. Separate press releases will be issued to address several of these matters in the near future.
Mr. Liu Xiaobin, the Chief Executive Officer of Gulf Resources, stated, “We want investors to understand that we remain confident in China’s economic recovery, in our company’s return to profitability, and in the decisions that we are making to act in the best interests of our shareholders.”
“Over the past year,” Mr. Liu continued, “we have postponed the final delivery of equipment for our chemical factory, because we did not see a short-term path to profitability. We believe some of the chemical companies in our niche in China are currently losing money. By postponing, we wanted to have the opportunity to see which segments of the industry would recover most quickly and what new opportunities, such as those for electrical strong or flow batteries, would emerge. When the timing is right, we will move ahead with the development of our chemical factory.”
“We also decided to hold off on additional investments in our natural gas business,” Mr. Liu continued. “While we remain committed to this project, we are currently seeking the best strategy.”
“We also participated in a flood prevention program required by the government,” Mr. Liu stated, “that we believe will help prevent future flood damages and allow us to drill more wells. Additionally, we are in the process of securing additional land for salt fields and bromine wells from local groups. Based on our analysis, we believe these fields could yield strong returns in the coming years.
“As the Chinese economy has begun to recover and bromine prices have started to improve,” Mr. Liu concluded, “we are becoming increasingly optimistic about the opportunities for the future.”
Conference Call
Gulf Resources management will host a conference call on Wednesday, November 20, 2024 at 08:00 AM Eastern Time to discuss its unaudited financial results of nine and three months ended September 30, 2024.
Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company management team will be available for investor questions following the prepared remarks.
To participate in this live conference call, please dial Toll Free +1 (888) 506-0062 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (973) -528-0011, and please reference to “Gulf Resources” or Participant Access Code: 287986 while dial in.
The webcasting is also available then, just simply click on the link below:
http://www.gulfresourcesinc.com/news-28.html
A replay of the conference call will be available two hours after the call's completion and will expire on Wednesday, November 27, 2024. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 51690 .
GULF RESOURCES, INC. | ||||||||||
AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(Expressed in U.S. dollars) | ||||||||||
September 30, 2024 Unaudited |
December 31, 2023 Audited |
|||||||||
Current Assets | ||||||||||
Cash | $ | 11,237,493 | $ | 72,223,894 | ||||||
Accounts receivable ,net | 1,186,880 | 4,865,696 | ||||||||
Inventories, net | 427,839 | 577,229 | ||||||||
Prepayments and deposits | 8,311,871 | 8,395,290 | ||||||||
Other receivable | 95,245 | 7,482 | ||||||||
Total Current Assets | 21,259,328 | 86,069,591 | ||||||||
Non-Current Assets | ||||||||||
Property, plant and equipment, net | 150,680,984 | 122,188,023 | ||||||||
Finance lease right-of use assets | 80,144 | 83,115 | ||||||||
Operating lease right-of-use assets | 6,385,605 | 6,699,784 | ||||||||
Prepaid land leases, net of current portion | 9,823,607 | 9,772,170 | ||||||||
Deferred tax assets ,net | 5,655,626 | 1,859,025 | ||||||||
Total non-current assets | 172,625,966 | 140,602,117 | ||||||||
Total Assets | $ | 193,885,294 | $ | 226,671,708 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Current Liabilities | ||||||||||
Accounts payable and accrued expenses | $ | 15,775,145 | $ | 8,833,936 | ||||||
Taxes payable-current | 145,642 | 475,630 | ||||||||
Advance from customer | — | 42,705 | ||||||||
Amount due to related parties | 2,598,765 | 2,586,658 | ||||||||
Finance lease liability, current portion | 201,855 | 172,625 | ||||||||
Operating lease liabilities, current portion | 498,580 | 473,653 | ||||||||
Total Current Liabilities | 19,219,987 | 12,585,207 | ||||||||
Non-Current Liabilities | ||||||||||
Finance lease liability, net of current portion | 1,103,707 | 1,312,950 | ||||||||
Operating lease liabilities, net of current portion | 7,036,482 | 7,525,255 | ||||||||
Total Non-Current Liabilities | 8,140,189 | 8,838,205 | ||||||||
Total Liabilities | $ | 27,360,176 | $ | 21,423,412 | ||||||
Commitment and Loss Contingencies | $ | — | $ | — | ||||||
Stockholders’ Equity | ||||||||||
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding |
$ | — | $ | — | ||||||
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 11,012,754 shares issued; and 10,726,924 shares outstanding as of September 30, 2024 and December 31, 2023, respectively |
24,623 | 24,623 | ||||||||
Treasury stock; 285,830 shares as of September 30, 2024 and December 31, 2023 at cost |
(1,372,673 | ) | (1,372,673 | ) | ||||||
Additional paid-in capital | 101,688,262 | 101,688,262 | ||||||||
Retained earnings unappropriated | 55,711,323 | 96,294,256 | ||||||||
Retained earnings appropriated | 26,667,097 | 26,667,097 | ||||||||
Accumulated other comprehensive loss | (16,193,514 | ) | (18,053,269 | ) | ||||||
Total Stockholders’ Equity | 166,525,118 | 205,248,296 | ||||||||
Total Liabilities and Stockholders’ Equity | $ | 193,885,294 | $ | 226,671,708 |
GULF RESOURCES, INC. | ||||||||||||||||||||
AND SUBSIDIARIES | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | ||||||||||||||||||||
(Expressed in U.S. dollars) | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Three-Month Period Ended September 30, |
Nine -Month Period Ended September 30, |
|||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||
NET REVENUE | ||||||||||||||||||||
Net revenue | $ | 2,242,365 | $ | 5,865,615 | $ | 5,932,596 | $ | 23,173,404 | ||||||||||||
OPERATING INCOME (EXPENSE) | ||||||||||||||||||||
Cost of net revenue | (4,071,616 | ) | (6,373,902 | ) | (11,303,519 | ) | (20,464,418 | ) | ||||||||||||
Sales and marketing expenses | (13,484 | ) | (14,428 | ) | (31,608 | ) | (42,850 | ) | ||||||||||||
Direct labor and factory overheads incurred during plant shutdown | (1,736,345 | ) | (1,007,689 | ) | (7,185,537 | ) | (4,471,954 | ) | ||||||||||||
General and administrative expenses | (1,002,529 | ) | (762,884 | ) | (2,409,957 | ) | (2,266,260 | ) | ||||||||||||
Other operating income (loss) | — | — | — | 60,134 | ||||||||||||||||
TOTAL OPERATING COSTS AND EXPENSE | (6,823,974 | ) | (8,158,903 | ) | (20,930,621 | ) | (27,185,348 | ) | ||||||||||||
PROFIT (LOSS) FROM OPERATIONS | (4,581,609 | ) | (2,293,288 | ) | (14,998,025 | ) | (4,011,944 | ) | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||
Interest expense | (21,191 | ) | (23,791 | ) | (70,835 | ) | (81,322 | ) | ||||||||||||
Interest income | 6,220 | 57,758 | 77,071 | 201,127 | ||||||||||||||||
Other expenses (income) | — | — | (29,173,011 | ) | — | |||||||||||||||
INCOME(LOSS) BEFORE TAXES | (4,596,580 | ) | (2,259,321 | ) | (44,164,800 | ) | (3,892,139 | ) | ||||||||||||
INCOME TAX BENEFIT (EXPENSE) | 1,103,697 | 483,524 | 3,581,867 | 876,779 | ||||||||||||||||
NET PROFIT (LOSS) | $ | (3,492,883 | ) | $ | (1,775,797 | ) | $ | (40,582,933 | ) | $ | (3,015,360 | ) | ||||||||
COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||||
NET PROFIT (LOSS) | $ | (3,492,883 | ) | $ | (1,775,797 | ) | $ | (40,582,933 | ) | $ | (3,015,360 | ) | ||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||||||
- Foreign currency translation adjustments | 3,102,876 | 2,247,978 | 1,859,755 | (7,879,513 | ) | |||||||||||||||
TOTAL COMPREHENSIVE (LOSS) INCOME | $ | (390,007 | ) | $ | 472,181 | $ | (38,723,178 | ) | $ | (10,894,873 | ) | |||||||||
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: | $ | (0.33 | ) | $ | (0.17 | ) | $ | (3.78 | ) | $ | (0.29 | ) | ||||||||
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES: | 10,726,924 | 10,431,924 | 10,726,924 | 10,431,924 |
GULF RESOURCES, INC. | ||||||||||
AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Expressed in U.S. dollars) | ||||||||||
(UNAUDITED) | ||||||||||
Nine-Month Period Ended September 30, |
||||||||||
2024 | 2023 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income(loss) | $ | (40,582,933 | ) | $ | (3,015,360 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||
Amortization on capital lease | 70,835 | 80,252 | ||||||||
Depreciation and amortization | 14,037,554 | 15,385,624 | ||||||||
Unrealized translation difference | — | 165,444 | ||||||||
Deferred tax asset | (3,615,091 | ) | (1,002,511 | ) | ||||||
Amortization of right-of-use asset | 659,509 | — | ||||||||
Loss on disposal of equipment | 29,169,008 | — | ||||||||
Changes in assets and liabilities: | ||||||||||
Accounts receivable | 3,677,653 | 3,132,796 | ||||||||
Inventories | 153,371 | 718,994 | ||||||||
Prepayments and deposits | 171,305 | (3,947,311 | ) | |||||||
Advance from customers | (42,545 | ) | — | |||||||
Other receivables | (86,423 | ) | — | |||||||
Accounts and Other payable and accrued expenses | (2,685,766 | ) | (1,503,845 | ) | ||||||
Amount due to related Parties | — | — | ||||||||
Taxes payable | (330,299 | ) | (229,600 | ) | ||||||
Operating lease | (889,641 | ) | 85,129 | |||||||
Net cash (used in) provided by operating activities | (293,463 | ) | 9,869,612 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Purchase of property, plant and equipment | (60,526,213 | ) | (15,197,648 | ) | ||||||
Net cash from investing activities | (60,526,213 | ) | (15,197,648 | ) | ||||||
CASH FLOWS USED IN FINANCING ACTIVITIES | ||||||||||
Repayment of finance lease obligation | (264,094 | ) | (267,810 | ) | ||||||
Net cash used in financing activities | (264,094 | ) | (267,810 | ) | ||||||
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
97,369 | 1,144,609 | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (60,986,401 | ) | (4,451,237 | ) | ||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 72,223,894 | 108,226,214 | ||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 11,237,493 | $ | 103,774,977 |
Periods Ended September 30, | ||||||||
2024 | 2023 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash paid during the nine-month period ended September 30, 2024 for: | ||||||||
Paid for taxes | $ | 1,013,382 | $ | 4,930,601 | ||||
Interest on finance lease obligation | $ | 70,835 | $ | 80,252 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
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About Gulf Resources, Inc.
Gulf Resources, Inc. operates through four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"), Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sells crude salt. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.
Forward-Looking Statements
Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, the risks associated with the COVID-19 pandemic outbreak, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.