Gulf Resources(US:GURE)2019-03-15 20:46Financial Performance - In the fiscal year ended December 31, 2018, the net revenue for the bromine segment was $0 due to the closure of all plants for rectification and improvement since September 1, 2017[47]. - Sales to the three largest crude salt customers in 2018 aggregated $1,981,573, representing 100% of total net revenue from crude salt sales[48]. - The Company has ongoing policies to ensure sales are made to credit-worthy customers, with no accounts receivable reported for the year ended December 31, 2018[45]. Capital Expenditures and Investments - The company incurred $16,243,677 in rectification and improvements of plant and equipment for bromine and crude salt factories in the fiscal year ended December 31, 2018, with a cumulative total of $34,182,329 since the beginning[25]. - The Company expects to incur approximately $28 million in capital expenditure for building new extraction wells in 2019[59]. - The relocation of chemical production plants is estimated to cost approximately $60 million, with $10,925,081 capitalized in construction work in progress as of December 31, 2018[60]. - The company has entered into contracts for building new extraction wells for bromine facilities totaling approximately $40 million, with about $12 million paid in 2018[26]. - The company has secured land for a new chemical factory, with total construction costs estimated at approximately $60 million[31]. Operational Changes and Challenges - An impairment charge of $27,966,050 was recorded for the chemical segment in the year ended December 31, 2018, due to uncertainties in demand and regulatory approvals[33]. - The company wrote off a net book value of $18,644,473 for the demolition of three bromine factories as of December 31, 2018[28]. - The company is focused on obtaining necessary approvals to resume production and may consider future acquisition opportunities in the bromine segment[30]. Workforce and Employee Benefits - The Company has a total of approximately 699 full-time employees as of December 31, 2018, with 64% employed by SCHC and DCHC, and 35% by SYCI[71]. - The Company purchased social insurance for almost all employees, with expenses related to social insurance amounting to approximately $1,216,096 for fiscal year 2018[72]. Subsidiary and Expansion Plans - The company has established a new subsidiary, Daying County Haoyuan Chemical Company Limited, with registered capital of RMB50,000,000 to explore natural gas and brine resources[21]. - The company plans to continue acquiring smaller scaled and unlicensed bromine producers to expand its operations[36]. Production Capacity - The annual production capacity for SYCI's old factories was over 26,000 tons for oil and gas field exploration products, over 5,000 tons for papermaking-related chemical products, and over 6,800 tons for materials used for human and animal antibiotics[43]. Project Updates - The Company completed the first brine water and natural gas well field construction in Sichuan Province, commencing trial production in January 2019[32]. - The Company completed the first brine water and natural gas well field construction in Sichuan Province and commenced trial production in January 2019[56].