OREANDA-NEWS. August 31, 2011. Longwei Petroleum Investment Holding, which stores and distributes refined oil and gas in China, cut its earnings forecast by 7 percent for the fiscal year that ended in June, and its revenue forecast by 4 percent.

Longwei now expects net income of USD 65 million, adjusted for warrant derivative liability expense, for the fiscal year that ended June 30. In May, the China-based company had reiterated earlier guidance for adjusted net income of at least USD 70 million.

Revenue is now expected to be about USD 480 million, down from its earlier projection of at least USD 500 million.

"We have tried to maintain margin integrity during a period of volatile price fluctuations," Chief Financial Officer Michael Toups said.

Longwei also said it has paid a deposit of about USD 85.1 million from cash on hand for its previously announced purchase of the assets of Huajie Petroleum Co., including a fuel storage depot in northern Shanxi Province with a 100,000-metric-ton capacity. The depot will nearly double companywide storage capacity to 220,000 metric tons.

CEO and Chairman Cai Yongjun said Longwei has arrangements to pay the balance of the total purchase price of about USD 108.3 million using cash on hand.

Longwei expects the depot in Shanxi Province to contribute about USD 300 million to revenue and USD 40 million to net income during the first 12 months of operations.