Sep 13 2010
China Armco Metals, Inc. (NYSE Amex: CNAM), a distributor of imported metal ore and a metal recycler with a new state-of-the-art scrap metal recycling facility in China, today announced that the Jiangsu Provincial Government has scheduled rolling blackouts in September for the Lianyungang enterprise zone where its wholly owned subsidiary, Armet Renewable Resourced Co., Ltd., operates its metal recycling facility.
The power restrictions are being initiated by the province to meet annual central government industrial energy usage targets.
The energy restrictions will significantly reduce our recycling capabilities in the fourth quarter which is expected to impact its revenue in 2010 by as much as $40 million. This has caused management to revise its financial guidance for the full year of 2010 which is now expected to exceed $140 million with net income exceeding $8 million.
Commenting on the announcement, Mr. Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, "While the government's decision to restrict power will negatively impact our performance over the course of this month, we believe our recycling operations will quickly recover following this interruption as we ramp up our production utilization rates. With current steel prices remaining favorable to our operations, we see a strong outlook for the quarters ahead after this short term interruption is behind us."