Wsp Holdings (NYSE:WH)

Fourth Quarter 2011 Results

• WSP Holdings generated revenues of $180.4 million in the fourth quarter of 2011 compared to $138.5 in 2010
• Loss from operations was $16.7 million in the fourth quarter of 2011, compared to loss from operations of $6.4 million and $46.9 million in the third quarter of 2011 and the fourth quarter of 2010, respectively.
• Basic and diluted loss per ADS were both $0.93 in the fourth quarter of 2011, compared to basic and diluted loss per ADS of $0.81 and $2.59 for both in the third quarter of 2011 and in the fourth quarter of 2010, respectively.

"The fourth quarter saw a modest decrease in both our revenues and gross margin from the third quarter of 2011, mainly due to a decrease in the average selling prices of our non-API products. Export sales decreased in the fourth quarter of 2011 primarily due to a decrease in sales of our non-API products," commented Mr. Longhua Piao, the Chairman and CEO of WSP Holdings. "This decline was partially offset by a marginal increase in domestic sales of our API products. Even so, our export sales in 2011 have improved considerably compared to 2010 due to our continued international marketing efforts. We will continue with our current strategy to focus and build upon our success in new international markets such as South America, Middle East and Central Asia."

Recent Business Development

The Company has recently engaged Houlihan Lokey (China) Limited as the financial advisor to the Special Committee of its Board of Directors in relation to the non-binding proposal received from H.D.S. Investment LLC ("HDS") indicating HDS's interest in acquiring all outstanding shares of the Company in a possible going-private transaction for $3.00 per American Depository Share in cash, subject to certain conditions. The Special Committee, working with its advisors, has not set a definitive timetable for completion of its evaluation and does not currently intend to announce developments unless and until a definitive transaction or strategic option has been approved.

Third Quarter 2011 Results

Second quarter 2011 results

We financed our liquidity requirements from short-term and long-term bank loans, loans and capital contributions from shareholders, including the proceeds from our initial public offering in 2007. In 2009, we experienced a significant decline in sales to the United States due to anti-dumping and countervailing duty on seamless pipes made in China, imposed by the United States government and intense competition in China. Our cash flow from operations was hence adversely impacted. We have taken various actions to conserve cash, procure additional financing and improve the liquidity.

2009 20F (Still has not filed 2010 20F).

WUXI, China, June 23, 2011 /PRNewswire-Asia-FirstCall/ -- WSP Holdings Limited (NYSE: WH) ("WSP Holdings" or the "Company"), a leading Chinese manufacturer of API (American Petroleum Institute) and non-API seamless casing, tubing and drill pipes used in oil and natural gas exploration, drilling and extraction ("Oil Country Tubular Goods" or "OCTG"), and other pipes and connectors, today announced that its wholly-owned subsidiary, Wuxi Seamless Oil Pipes Company Limited ("WSP China"), received $97 million in new orders from state-owned oil companies in Venezuela and Ecuador.

WSP China received 22 new purchase orders for API and non-API casing pipe, API tubing pipe, line pipe and connectors from PDVSA Services B.V., a state-owned hydrocarbons company in Venezuela. These new purchase orders are for a total of 37,705 tonnes of API and non-API casing pipe and API tubing pipe and 4,600 tonnes of line pipe, worth approximately $81 million. Among these, non-API casing pipe accounts for $48 million, or 60% of the total. The Company expects to complete delivery of these orders by the end of September 2011.

In addition, WSP China received a new purchase order from PETROAMAZONAS EP, a state-owned oil corporation in Ecuador. The new purchase order is for a total of 9,063 tonnes of API casing pipe and 1,110 tonnes of non-API tubing pipe, worth approximately $16.4 million. The Company expects to complete delivery of the order by the end of July 2011.

"We continue to make inroads into South America by securing these sizable orders in Venezuela and Ecuador. This speaks to the high performance characteristics of our API and non-API products and ability to compete in the global OCTG market," said Mr. Longhua Piao, Chairman and CEO of WSP Holdings. "Once the hot-rolling lines in our Thailand plant and the heat treatment line in Houston begin commercial production in the third quarter of 2011, we expect to see an increase in sales to North America. On the whole, we expect our international market share to increase as brand awareness of our products in North and South America and other parts of the world continues to expand."

First Quarter 2011 Highlights
(Comparison with the fourth quarter of 2010 and the first quarter of 2010)

Fourth Quarter Results:

"In the fourth quarter, we saw a modest increase in total revenue from the third quarter of 2010, driven primarily by sales in the domestic market.  Demand for API products was strong, as reflected in the 51.9% quarter-over-quarter increase in sales volume. While selling prices for API products declined slightly quarter-over-quarter, we saw meaningful increases in selling prices for our non-API products," commented Mr. Longhua Piao, the Chairman and CEO of WSP Holdings. "Export sales declined mainly due to lower sales volume.  However, we are encouraged by our recent success in securing additional contract wins worth a total of approximately $91.8 million to sell our API and non-API products to Venezuela which represents our increased penetration into the South American market.  We expect to see a further improvement in our performance in the coming years, as global demand for oil continues to rise on the back of the worldwide economic recovery."

• WSP Holdings reported slightly higher revenues of $138.5 million in the fourth quarter of 2010 compared to$137.0 million in the third quarter of 2010 due to an increase in revenues generated from domestic sales
• Net loss attributable to WSP Holdings Limited was $52.4 million in the fourth quarter of 2010, compared to net loss of $15.5 million and $26.8 million in the fourth quarter of 2009 and the third quarter of 2010, respectively.
• Basic and diluted loss per ADS were both $0.51 in the fourth quarter of 2010, compared to basic and diluted loss per ADS of $0.15 and $0.26 for both in the fourth quarter of 2009 and in the third quarter of 2010, respectively.

WUXI, China, March 1, 2011 /PRNewswire-Asia-FirstCall/ -- WSP Holdings Limited announced today the appointment of Mr. Choon-Hoi Then as Chief Financial Officer of the Company effective March 1st, 2011.

• WSP Holdings reported slightly higher revenues of $137.0 million in the third quarter of 2010 compared to $134.1 million in the second quarter of 2010 due to an increase in international sales. was 7.7%, compared to 5.6% in the second quarter of 2010 and 5.0% in the third quarter of 2009. Higher quarter-over-quarter and year-over-year gross margins were primarily due to higher average selling prices of API products in the third quarter of 2010.
• Loss from operations was $21.1 million in the third quarter of 2010, compared to loss from operations of $8.0 million and $5.8 million in the third quarter of 2009 and the second quarter of 2010, respectively.
• Net loss was $26.8 million in the third quarter of 2010, compared to net loss of $11.7 million and $12.0 million in the third quarter of 2009 and the second quarter of 2010, respectively.
• Basic and diluted loss per ADS were both $0.26 in the third quarter of 2010, compared to basic and diluted loss per ADS of $0.11 and $0.12 in the third quarter of 2009 and in the second quarter of 2010, respectively.

"In this quarter, we saw a continuous improvement in the sales of our non-API products while sales of our API products have decreased despite an increase in average prices, mainly due to lower sales volume resulting from the difficult domestic market environment that we have been facing. Domestic sales have seen an increase in volume mainly due to sales of iron ore pellets, and international sales have improved compared to the second quarter of 2010 due to our continued penetration efforts," commented Mr. Longhua Piao, the Chairman and CEO of WSP Holdings. "As 2010 comes to an end, although we have seen signs of economic growth in several of our key markets, the world economy is still far from full recovery. Therefore, we do not expect to see a noticeable improvement in our business sales volume and prices in the near term. However, we expect a recovery in the coming years due to increasing global demand for oil as the worldwide economy gathers growth momentum, consumer and business sentiments recover and spending increases, and as we ramp up the production facilities at our subsidiaries to begin contributing to our bottom line."

WSP Holdings reported higher revenues of $134.1 million in the second quarter of 2010 compared to $60.9 million in the previous quarter due to increases in both domestic and international sales. Domestic sales and international sales accounted for 62.8% and 37.2%, respectively, of total revenues for the second quarter of 2010.

Loss from operations was $5.8 million, compared to income from operations of $14.0 million in the second quarter of 2009 and loss from operations of $22.7 million in the first quarter of 2010.

The Company recorded an income tax benefit of $0.07 million in the second quarter of 2010, compared to income tax expense of $1.5 million in the second quarter of 2009.

Net loss was $12.0 million in the second quarter of 2010, compared to $10.0 million of net income in the second quarter of 2009 and net loss of $27.0 million in the first quarter of 2010.

Basic and diluted loss per ADS were both $0.12 in the second quarter of 2010, compared to earnings per basic and diluted ADS of $0.10 in the second quarter of 2009 and loss per basic and diluted ADS of $0.26 in the first quarter of 2010.

'The second quarter of 2009 presented major challenges for OCTG providers as customer demand declined significantly in international markets such as the United States. We experienced erosion in both revenue and profitability during the quarter due to lower average selling prices and a greater contribution of lower-margin API products in our sales mix.

'Although WSP Holdings' performance in the first half of 2009 declined compared to the same period of last year, we believe our results exceeded those of most other major industrial players under current market conditions,' said Mr. Piao.

'In July and August, we have seen an uptick in purchase orders due to more exploration activities and we expect domestic demand for both API and non-API products to improve in the second half of 2009.

Source: PR Newswire (August 11, 2009)

"Despite weak OCTG demand from international markets, we had solid performance in the first quarter of 2009. We expect stable and eventually increasing prices for oil and gas to lead to increased exploration and production activities and eventually increased demand for our OCTG products,' said Mr. Piao. 'We have increased our sales to existing and new Chinese customers, and we have successfully sold our products to new customers in Central and South America, North Africa and Central and Southeast Asia, including Algeria and Ecuador. We are increasing our marketing efforts in the Middle East and Russia, and seeking more orders to supply our products to overseas projects of SINOPEC, CNPC and CNOOC."

The company did not comment on its previously issued guidance on March 11, 2009.

Source: PR Newswire (May 14, 2009)

Guidance Report:

'In 2009, we expect selling prices in China for our non-API products to remain at current levels for some time because our products are needed in extreme oil and gas exploration environments and our customers recognize the technological advantages of our products, such as our T-series premium connection and anti-corrosion pipes which use our proprietary technologies. Our non-API products have price advantages compared to our international competitors because of our lower costs of production, and we provide faster delivery to our international customers than most of our international competitors to attract more international customers. It is difficult to predict how selling prices for our API products in China will change during the remainder of 2009 because of a current oversupply of API products and aggressive price competition in the Chinese market. Based on the purchase contracts we won in February 2009, we estimate that average selling prices to our largest domestic customers will be lower and order volume will remain constant throughout 2009,' commented Mr. Piao. 'Looking forward, we cannot predict what will happen to raw material prices in 2009, which will have an important impact on our API and non-API sales margins

Full Year Fiscal 2009 Guidance Ending December

*The company did not provide EPS guidance.

Source: PR Newswire (March 11, 2009)

Guidance Report:

Full Year 2008 Guidance Ending December

"Net income is expected to be lower than the Company's previously announced guidance of at least $110 million primarily due to an increase in provisions for bad debts that resulted from uncollectible letters of credit.

The letters of credit were issued in connection with the sale of casing and drill pipe products to two Russian companies. The Russian bank that issued the letters of credit for these two Russian companies was unable to make payment under the letters of credit due to the bank's financial difficulties. WSP Holdings is actively exploring various ways to recover these debts."

Source: PR Newswire (January 21, 2009)

GeoTeam® Comment:

The GeoTeam® is uncertain as to why the company did not provide EPS guidance.  As a result,    some investors may infer that there could be dilutive events in the future. However, published estimates do show EPS of $0.94 for 2008 and $1.34 for 2009.