Gulf Resources Raises Fiscal Year 2010 Guidance

Published Sep 15th, 2010

SHANDONG, China, Sept. 15 /PRNewswire-Asia-FirstCall/ -- Gulf Resources, Inc. (Nasdaq:GFRE - News) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced that the Company has raised its guidance for fiscal year 2010 based upon the favorable bromine pricing environment and improved production efficiency.
 

Due to the strong demand for bromine in China, especially from the application of the pharmaceutical sector, bromine prices have continued to rise and reached over RMB 23,000 per ton in the beginning of September 2010. Given the improved pricing environment, the Company is renegotiating contract prices with customers to incorporate the current market price, to be effective beginning in October 2010. In addition, the management conducted a restructuring of bromine factory employees in the beginning of July 2010 to improve production efficiency and continues to implement cost controls to maintain profit margins.
 

As a result of the increase in bromine prices, Gulf Resources has raised its 2010 full-year guidance for revenue from between $146 million and $150 million to between $151 million and $155 million, an increase of 37% to 41% over 2009 revenues of $110.3 million. The company has also raised its net income guidance from between $44 million and $46 million to between $48 million and $50 million, or between $1.38 and $1.44 per diluted share, an increase of between 57% and 63% over 2009 net income of $30.6 million. This updated guidance does not take into account the impact of any additional potential acquisitions.
 

"We are encouraged by the favorable pricing environment, which provides us with the confidence that we will be able to achieve strong financial performance in the second half of 2010," said Mr. Xiaobin Liu, CEO of Gulf Resources. "We continue to see strong bromine demand in the domestic market and believe the current bromine prices are sustainable for the foreseeable future. We are optimistic about our strategy to continue to consolidate our leadership position in China."