Asia Bio-Chem Group Corp. Announces 2011 Fourth Quarter and Fiscal Year End Financial Results

TORONTO, March 22, 2012 /PRNewswire/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia Bio-Chem" or the "Company") announces its financial results for the three-month period and fiscal year ending December 31, 2011.

Highlights

• Increased product prices and higher sales volumes contributed to a 37.1% improvement in revenues during the fourth quarter of 2011 to $63.6 million compared with the same period in 2010.
  
  
• Record high corn costs caused gross margin to decline to 3.3% during the fourth quarter compared with 14.2% during the same period in 2010.
  
  
• Lower gross margin together with higher operating expenses during the fourth quarter resulted in a net loss of $5.9 million or $0.07 loss per share compared with $2.9 million net income or $0.04 earnings per share during the fourth quarter of 2010. Prior to the $2.2 million allowance for doubtful accounts the net loss was $3.7 million.
  
  
• The Company continues to enjoy a good relationship with its banking group with total bank borrowings of $120.9 million at December 31, 2011.  During the fourth quarter, the Company secured additional $40.4 million in bank loans..
  
  
• The company maintains a total cash balance of $35.6 million at December 31, 2011.
  
  
• In view of current economic conditions, the Company continues to defer the construction of its Daqing downstream expansion project.

"2011 was a year of challenges for our Company and for the industry in which we operate.  Our product prices have not kept up with continued increases in corn prices which has put pressure on our margins during the second half of the year," stated Mr. Zhiping Wang, President and CEO of Asia Bio-Chem.  "Trading conditions continue to be challenging in the first quarter of 2012 however starch prices have begun to improve at the end of the quarter."

During the fourth quarter, overall production increased by 43.2% to 182,644 tonnes.

During the fourth quarter, a 12.2% increase in corn costs caused gross margin to decline to 3.3% compared with 14.2% during the same period in 2010.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") during the fourth quarter declined by 151.4% to negative $2.8 million, as the Company experienced lower margins and higher costs including a $2 million provision against its accounts receivables.

SUMMARY FINANCIAL STATEMENTS

During 2010, the Company's unrestricted cash position increased to $10.6 million and total debt increased to $120.9 million as at December 31, 2011.  Higher debt was incurred to finance working capital as difficult market conditions caused slower payment terms from the Company's customer base.

Conference Call
Asia Bio-Chem will be hosting a conference call to discuss the fourth quarter and year end quarter results at 9:00 a.m. EST on Friday, March 23, 2012. The details are as follows:

About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the People's Republic of China ("PRC"), is in the business of processing corn. From its plants in Liaoning and Heilongjiang Province, the Company has a total processing capacity of 900,000 tonnes of corn per year, which are processed into cornstarch, corn germ, gluten, and fiber for sale into the domestic Chinese market.

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.

SOURCE Asia Bio-Chem Group Corp.