GUANGZHOU, China, May 16, 2013 /PRNewswire/ -- Sino Agro Food, Inc.
(OTC BB: SIAF.OB), an emerging integrated, diversified agriculture
technology and organic food company ("the Company") with principal
operations located throughout the
People's Republic of China ("PRC"), is pleased to announce
financial results for the quarter ended March 31, 2013:
Consolidated Financial Summary:
|
|
Q1
2013
|
Q1
2012
|
Change
|
Revenue
|
|
$55,107,751
|
$15,980,016
|
245%
|
Gross
Profit
|
|
$21,522,817
|
$8,013,592
|
169%
|
Net
Income (Continuing Ops)
|
|
$16,378,772
|
$5,632,769
|
191%
|
|
|
|
|
|
Basic
EPS (Continuing Ops)
|
|
$0.16
|
$0.08
|
100%
|
Diluted
EPS (Continuing Ops)
|
|
$0.14
|
$0.07
|
100%
|
Revenues of $55.1M in the first
quarter continued a string of four consecutive sequential quarterly
records. In the upcoming conference call, the Company will discuss
2013 guidance, anticipating continued record results.
This quarter's revenues exceeded revenues for the full year of
2011. During the quarter, stockholders' equity increased by
$24,750,595 to $241,841,337.
A primary driver of this quarter's revenue growth was the
strategic and incremental layering of the Company's new businesses.
This was the first quarter that included sales from the import and
export operation, which sold nearly 600 tons of seafood, and
contributed $5.7M to revenues.
Fishery Division Performance
Revenue from the fishery division increased by $20,772,686 or 187% to $31,867,295 for the three months ended
March 31, 2013 from $11,094,609 for the three months ended
March 31, 2012. The increase was
primarily due to the Company's increased contract service income
from fishery and prawn development contracts, and the sale of fish
for the three months ended March 31,
2013 versus consulting income and sale of fish for the three
months ended March 31, 2012.
The price of sleepy cod dropped sharply from $25/kg to just over $16/kg on average in the first quarter. Whereas
the volume of sleepy cod sold at Jiang Men City A Power Fishery
Development Co., Limited ("JFD"), which operates what the company
refers to as "Fish Farm 1" averaged over 80 MT per month, the
decrease in price contributed to a decrease in the Company's
overall gross profit margin. The sensitivity of gross margins to
sleepy cod prices, or the price of any fish or prawn species will
be dramatically reduced as more varied species are sold. New fish
and prawn species are expected be sold during 2013 and beyond.
The Company plans to nurture Flower Pattern Eels' fingerlings
into adult eels (500 gram / eel and upward) that will be supplied
to Fish Farm 1 and the open dam farm and for these farms to grow
the adult eels into marketable sized eels (1.5 kg / eel and larger)
which at present are selling at high prices of $27 - $28 per kg. The Company expects its first
shipment of fingerlings imported from Madagascar to arrive in China during the third week of May 2013.
The price of live prawn species rose on average over 100% in the
first quarter of this year versus the same period in 2012.
Currently wholesale prices for Mexican White prawns average
$12/kg to $32/kg, depending on size. There is a
corresponding increase in grow out time. Prices are much
higher for other species including Green Prawns. On
April 22, 500,000 prawn flies were
placed at Prawn Farm 1, commencing the production operation at the
first indoor prawn farm in Asia.
The Company expects to produce 250-300 MT of prawns in 2013.
In March of 2013, Prawn Farm 2 sold its first Green Prawn flies,
and increased sales of Mexican White flies by 33% over
February.
With the current work schedule planned to capacity for the
fishery division, the Company does not expect to take on any new
fish farm construction and development projects until the third
quarter of 2013.
Beef Division Performance
Revenue from the Beef Division increased by $2,865,557 or 73% to $6,795,837 for the three months ended
March 31, 2013 from $3,930,280 for the three months ended
March 31, 2012. The increase was
primarily due to the increase in productivity of the cattle rearing
division of Qinghai Sanjiang A Power Agriculture Co. Ltd. ("SJAP")
and related sales.
At SJAP, construction work is on-going targeting 17 new cattle
houses and related facilities by the end of 2013. There are
currently 12. The Company expects this to provide the capacity for
the rearing of 6,000 head of cattle annually, based on a six-month
rotation. Additional head of cattle are expected to be sold through
the cooperative of local farmers. Construction of the abattoir,
deboning factory and related packaging facilities commenced
April 21, 2013.
Cattle Farm 1 sold 450 head of cattle in the first quarter. On
April 22, 2013, 180 head were being
shipped to Beijing City to be sold
to a wholesaler specializing in supplying top quality beef to top
hotels and restaurants. The Company is currently establishing a
Cattle Station and related facilities within the Central Cattle
Market and Facility of Beijing
City, to distribute its own aromatic beef to top hotels and
restaurants. This is the first in a broader interstate wholesale
distribution development plan.
Organic Fertilizer Division Performance
Revenue from the Organic Fertilizer Division increased by
$8,069,001 to $8,082,062 for the three months ended
March 31, 2013 from $13,061 for the three months ended March 31, 2012. The increase was primarily due to
the start up at the Hunan Shenghua A Power Agriculture Co., Limited
("HSA") division of sales of pure organic mixed fertilizer ("POMF")
and by additional revenues from the newly built Concentrated
Livestock Feed ("CLSF") factory at SJAP. The Fertilizer Division
contributed 14.7% of revenues in the quarter, versus 6.6% in the
full year 2012. Gross profit of $3,990,186 accounted for 18.5% of total gross
profit, versus 5.5% in the full year 2012.
The new POMF factory targets to reach 2013 sales of 30,000 MT;
the new CLSF factory is designed with an annual capacity of 60,000
MT.
Cattle Farm Division Performance
Revenue from the cattle farm division increased by $7,420,491 to $8,362,557 for the three months ended
March 31, 2013 from $942,066 for the three months ended March 31, 2012. The increase was primarily
due to the increase of production and sales of cattle in Cattle
Farm 1 for the three months ended March 31,
2013.
At SJAP, the Xining cattle
farm, an additional 1,500 acres of land will be cropped and
pastured, bringing the total to 6,500 acres granted rent free to
SJAP from the local government.
Shared Marketing, Distribution and Retail Services
Marketing, distribution, and retail activities were established
in 2012 as services shared by the wholesale operations to enhance
and facilitate sales.
In the first quarter of 2013, the Import-Export Division sold
almost 600 MT of seafood from
Norway and Southeast Asia, and generated revenues of
$5.7M. In April 2013 the Chinese Authorities for Imported
Quotas approved the application for import of Flower Pattern Eels,
Mud Crabs and Lobsters via a third party entity acting for and on
behalf of the Company. Arrangements have been for import from
Madagascar, and the company
intends to build and outfit packaging and holding facilities to
receive and pack live seafood for export from Madagascar to China.
Construction is progressing well on the Seafood and Beef
Wholesale Centers 1 and 2, such that each will generate its initial
revenues from the Fishery and Beef Divisions and/or from other
Chinese wholesalers in the second quarter.
Other development work is proceeding on schedule, including the
new Trading Center and the Leonie chain's Central Kitchen and
Bakery, which is scheduled to complete late in the second quarter.
The third Leonie's restaurant started operation in March, and the
fourth is scheduled to open in late May or early June.
Consolidated Results
Revenue
Revenue increased by $39,127,734
or 245% to $55,107,751 for the three
months ended March 31, 2013 from
$15,980,016 for the three months
ended March 31, 2012. The increase
was primarily due to the natural growth of revenue generated from
the fishery, organic fertilizer, beef and cattle farm, and the
maturity of on-going divisional businesses improving.
The following chart illustrates the changes by business segment
from the three months ended March 31,
2013 to three months ended March
31 2013.
Category
|
2013
|
2012
|
Difference
|
Change
|
|
|
|
|
|
Fishery
|
$31,867,295
|
$11,094,609
|
$20,772,686
|
187%
|
Plantation
|
-
|
-
|
-
|
-
|
Organic
Fertilizer
|
$8,082,062
|
$13,061
|
$8,069,001
|
61,779%
|
Beef
|
$6,795,837
|
$3,930,280
|
$2,865,557
|
73%
|
Cattle
Farm
|
$8,362,557
|
$942,066
|
$7,420,491
|
788%
|
Total
|
$55,107,751
|
$15,980,016
|
$39,127,735
|
245%
|
Cost of Goods
Cost of Goods Sold increased by $25,618,510 or 322% to $33,584,934 for the three months ended
March 31, 2013 from $7,966,424 for the three months ended
March 31, 2012. The increase
was primarily due to the Company increasing its scale of operation
- fishery, organic fertilizer, beef and cattle farm for the three
months ended March 31, 2013 as
compared for the three months ended March
31, 2012.
Gross Profit
Gross profit increased by $13,509,225 or 169% to $21,522,817 for the three months ended
March 31, 2013 from $8,013,592 for the three months ended
March 31 2012. The increase was
primarily due to the corresponding increase in revenues from
fishery organic fertilizer, and beef and cattle farm
operations.
General and Administrative Expenses
General and Administrative expenses (including depreciation and
amortization) in continuing operations decreased by $16,934 0r 0.76% to $2,205,388 for the three months ended
March 31 2013 from $2,222,322 for the three months ended
March 31 2012. The decrease was
primarily due to a decrease in general office and corporate
expenses, and wages and salaries amounting to $103,274 and $358,358 respectively, offset by increases in
depreciation and amortization and miscellaneous expenses of
$231,304 and $190,738 respectively.
Earnings Call Information
The Company will host an earnings call and web conference on
May 20, 2013 at 11:00 AM EDT to discuss financial results for the
first quarter of 2013, with questions and answers. To participate
in the conference call please use the following information:
SIAF 2013
First Quarter Earnings Call Information
|
Date: May
20, 2013
|
Time: 11
:00 AM, U.S. Eastern Daylight Time
|
Participant Dialing Instructions:
|
Toll Free
Number:
(1-800)
766-1337
|
Direct
Dial Number:
(1-404)
920-6210
|
Conference
Code: 2423733#
|
An audio replay of the conference call will be made available in
the Investor Relations section of the Company's web site.
SINO AGRO
FOOD, INC.
CONSOLIDATED BALANCE SHEETS
|
|
|
|
March 31, 2013
|
|
|
December 31, 2012
|
|
|
(Unaudited)
|
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
10,817,922
|
|
|
$
|
8,424,265
|
Accounts receivable, net of allowance for doubtful
accounts
|
|
|
71,460,325
|
|
|
|
52,948,350
|
Inventories
|
|
|
17,052,765
|
|
|
|
17,114,755
|
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
|
|
2,899,438
|
|
|
|
2,336,880
|
Deposits and prepaid expenses
|
|
|
51,836,098
|
|
|
|
47,308,857
|
Other receivables
|
|
|
6,222,208
|
|
|
|
5,954,248
|
Total
current assets
|
|
|
160,288,756
|
|
|
|
134,087,355
|
Property and equipment
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated
depreciation
|
|
|
19,765,409
|
|
|
|
19,946,302
|
Construction in progress
|
|
|
25,004,520
|
|
|
|
24,492,510
|
Land use rights, net of accumulated
amortization
|
|
|
55,504,586
|
|
|
|
55,733,246
|
Total
property and equipment
|
|
|
100,274,515
|
|
|
|
100,172,058
|
Other
assets
|
|
|
|
|
|
|
|
Goodwill
|
|
|
724,940
|
|
|
|
724,940
|
Proprietary technologies, net of accumulated
amortization
|
|
|
8,005,417
|
|
|
|
8,114,624
|
License rights
|
|
|
1
|
|
|
|
1
|
Total
other assets
|
|
|
8,730,358
|
|
|
|
8,839,565
|
Total
assets
|
|
$
|
269,293,629
|
|
|
$
|
243,098,978
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
7,325,322
|
|
|
$
|
5,762,643
|
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
|
|
2,099,026
|
|
|
|
2,790,084
|
Due to a director
|
|
|
2,007,278
|
|
|
|
3,345,803
|
Dividends payable
|
|
|
-
|
|
|
|
951,308
|
Other payables
|
|
|
9,507,858
|
|
|
|
6,654,478
|
Short term bank loan
|
|
|
3,190,352
|
|
|
|
3,181,927
|
|
|
|
24,129,836
|
|
|
|
22,686,243
|
Non-current liabilities
|
|
|
|
|
|
|
|
Deferred dividends payable
|
|
|
3,146,987
|
|
|
|
3,146,987
|
Long term debts
|
|
|
175,469
|
|
|
|
175,006
|
|
|
|
3,322,456
|
|
|
|
3,321,993
|
Commitments and contingencies
|
|
|
-
|
|
|
|
-
|
Stockholders' equity
|
|
|
|
|
|
|
|
Preferred stock: $0.001 par value
|
|
|
|
|
|
|
|
(10,000,000 shares authorized, 0 share issued and
outstanding as of
March 31, 2013 and December 31, 2012,
respectively)
|
|
|
|
|
|
|
|
Series A preferred stock: $0.001 par
value
|
|
|
-
|
|
|
|
-
|
(100 shares designated, 100 shares issued and
outstanding as of
March 31, 2013 and December 31, 2012,
respectively)
|
|
|
|
|
|
|
|
Series B convertible preferred
stock: $0.001 par value)
|
|
|
7,000
|
|
|
|
10,000
|
(10,000,000 shares designated, 7,000,000 and
10,000,000 shares issued and
outstanding) as of March 31, 2013
and December 31, 2012, respectively)
|
|
|
|
|
|
|
|
Series F Non-convertible preferred
stock: $0.001 par value)
|
|
|
|
|
|
|
|
(1,000,000 shares designated, 0 shares
issued and outstanding) as of
March 31, 2013 and December 31, 2012,
respectively)
|
|
|
|
|
|
|
|
Common stock: $0.001 par value
|
|
|
110,349
|
|
|
|
100,005
|
(130,000,000 shares authorized, 110,349,588 and
100,004,850 shares issued
and outstanding as of March 31,
2013 and December 31, 2012, respectively)
|
|
|
|
|
|
|
|
Additional paid - in capital
|
|
|
96,341,234
|
|
|
|
91,216,428
|
Retained earnings
|
|
|
120,243,080
|
|
|
|
103,864,308
|
Accumulated other comprehensive income
|
|
|
3,628,188
|
|
|
|
3,868,274
|
Treasury stock
|
|
|
(1,250,000)
|
|
|
|
(1,250,000)
|
Total
Sino Agro Food, Inc. and subsidiaries stockholders'
equity
|
|
|
219,079,851
|
|
|
|
197,809,015
|
Non -
controlling interest
|
|
|
22,762,486
|
|
|
|
19,281,727
|
Total
stockholders' equity
|
|
|
241,841,337
|
|
|
|
217,090,742
|
Total
liabilities and stockholders' equity
|
|
$
|
269,293,629
|
|
|
$
|
243,098,978
|
|
The
accompanying notes are an integral part of these consolidated
financial statements.
|
SINO AGRO
FOOD, INC.
CONSOLIDATED STATEMENT OF INCOME AND OTHER
COMPREHENSIVE INCOME
|
|
|
|
Three months ended
|
|
|
Three months ended
|
|
|
March 31, 2013
|
|
|
March 31, 2012
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Revenue
|
|
$
|
55,107,751
|
|
|
$
|
15,980,016
|
Cost of
goods sold
|
|
|
33,584,934
|
|
|
|
7,966,424
|
Gross
profit
|
|
|
21,522,817
|
|
|
|
8,013,592
|
General
and administrative expenses
|
|
|
(2,205,388)
|
|
|
|
(2,222,322)
|
Net
income from operations
|
|
|
19,317,429
|
|
|
|
5,791,270
|
Other
income
|
|
|
|
|
|
|
|
Government grant
|
|
|
79,759
|
|
|
|
79,365
|
Other
income
|
|
|
18,189
|
|
|
|
415,888
|
Gain on
extinguishment of debts
|
|
|
552,988
|
|
|
|
255,151
|
Interest expense
|
|
|
(57,052)
|
|
|
|
-
|
Net
income
|
|
|
593,884
|
|
|
|
750,404
|
Net
income before income taxes
|
|
|
19,911,313
|
|
|
|
6,541,674
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
Net
income
|
|
|
19,911,313
|
|
|
|
6,541,674
|
Less:
Net (income) attributable to the non - controlling
interest
|
|
|
(3,532,541)
|
|
|
|
(908,905)
|
Net
income from continuing operations attributable to the Sino Agro
Food, Inc. and subsidiaries
|
|
|
16,378,772
|
|
|
|
5,632,769
|
Other
comprehensive income
|
|
|
|
|
|
|
|
Foreign currency translation (loss)
gain
|
|
|
(291,868)
|
|
|
|
620,357
|
Comprehensive income
|
|
|
16,086,904
|
|
|
|
6,253,126
|
Less:
other comprehensive (income) attributable to the non -
controlling interest
|
|
|
51,782
|
|
|
|
(155,089)
|
Comprehensive income attributable to the Sino Agro
Food, Inc. and subsidiaries
|
|
$
|
16,138,686
|
|
|
$
|
6,098,037
|
Earnings per share attributable to Sino Agro Food,
Inc. and subsidiaries common stockholders:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
|
$
|
0.08
|
Diluted
|
|
$
|
0.14
|
|
|
$
|
0.07
|
Weighted average number of shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
105,385,902
|
|
|
|
68,747,617
|
Diluted
|
|
|
115,252,569
|
|
|
|
75,747,617
|
|
The
accompanying notes are an integral part of these consolidated
financial statements.
|
SINO AGRO
FOOD, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
|
Three
months ended
|
|
|
Three
months ended
|
|
|
March 31,
2013
|
|
|
March 31,
2012
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
19,911,313
|
|
|
$
|
6,541,674
|
Adjustments to reconcile net income to net cash from
operations:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
307,075
|
|
|
|
57,624
|
Amortization
|
|
|
337,867
|
|
|
|
374,729
|
Common stock issued for services
|
|
|
90,600
|
|
|
|
1,069,528
|
Gain on extinguishment of debts
|
|
|
(552,988)
|
|
|
|
(255,151)
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
|
Decrease (increase) in inventories
|
|
|
61,990
|
|
|
|
(115,181)
|
(Increase) decrease in costs and estimated earnings
in
excess of billings on uncompleted
contacts
|
|
|
(562,558)
|
|
|
|
456,104
|
Increase in deposits and prepaid expenses
|
|
|
(4,617,840)
|
|
|
|
(12,474,802)
|
(Decrease) increase in due to a director
|
|
|
(1,341,525)
|
|
|
|
2,263,024
|
Increase (decrease) in accounts payable
and accrued expenses
|
|
|
1,562,679
|
|
|
|
(281,085)
|
Increase in other payables
|
|
|
8,531,754
|
|
|
|
12,273,088
|
(Increase) decrease in
accounts receivable
|
|
|
(18,511,975)
|
|
|
|
2,387,345
|
(Decrease) increase in billings in excess of costs
and
estimated earnings on uncompleted
contracts
|
|
|
(691,058)
|
|
|
|
78,333
|
Decrease in amount due to related parties
|
|
|
-
|
|
|
|
(17,474)
|
(Increase) in other receivables
|
|
|
(267,960)
|
|
|
|
(7,361,132)
|
Net
cash provided by operating activities
|
|
|
4,257,374
|
|
|
|
4,996,624
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(126,182)
|
|
|
|
(7,223)
|
Acquisition of proprietary technologies
|
|
|
-
|
|
|
|
(1,500,000)
|
Business combination of a subsidiary
|
|
|
-
|
|
|
|
(1,288,865)
|
Investment in unconsolidated equity
investee
|
|
|
-
|
|
|
|
(1,076,489)
|
Payment for construction in progress
|
|
|
(512,010)
|
|
|
|
(669,461)
|
Net
cash used in investing activities
|
|
|
(638,192)
|
|
|
|
(4,542,038)
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
Non - controlling interest contribution
|
|
|
-
|
|
|
|
3,324,729
|
Dividends paid
|
|
|
(951,308)
|
|
|
|
(134,631)
|
Net
cash (used in) provided by financing
activities
|
|
|
(951,308)
|
|
|
|
3,190,098
|
Effects on
exchange rate changes on cash
|
|
|
(274,217)
|
|
|
|
(915,866)
|
Increase in cash and cash equivalents
|
|
|
2,393,657
|
|
|
|
540,355
|
Cash and cash equivalents, beginning of
period
|
|
|
8,424,265
|
|
|
|
1,387,908
|
Cash and cash equivalents, end of period
|
|
|
10,817,922
|
|
|
|
1,928,263
|
Supplementary disclosures of cash flow
information:
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
57,052
|
|
|
|
-
|
Cash paid for income taxes
|
|
|
-
|
|
|
|
-
|
Non - cash transactions
|
|
|
|
|
|
|
|
Common stock issued for settlement of
debts
|
|
$
|
5,115,041
|
|
|
$
|
2,118,841
|
Series B Convertible preferred shares
cancelled
|
|
$
|
(3,000)
|
|
|
$
|
-
|
About Sino Agro Food, Inc.
Sino Agro Food, Inc. ("SIAF") (http://www.sinoagrofood.com) is
an integrated, diversified agricultural technology and organic food
company focused on developing, producing and distributing
agricultural products in the People's
Republic of China. The Company intends to focus on meeting
the increasing demand of China's
rising middle class for gourmet and high-quality food items.
Current lines of business include the manufacture and distribution
of beef and lamb products, fish products, bioorganic fertilizer,
stock feed and cash crops.
Not a Broker/Dealer or Financial Advisor
Sino Agro Food, Inc. is not a Registered Broker/Dealer or a
Financial Advisor, nor does it hold itself out to be a Registered
Broker/Dealer or Financial Advisor. All material presented in this
press release, on the Company's website or other media is not to be
regarded as investment advice and is only for informative purposes.
Readers should verify all claims and conduct their own due
diligence before investing in Sino Agro Food, Inc.
Investing in small-cap, micro cap and penny stock securities
is speculative and carries a high degree of risk.
No Offer of Securities
None of the information featured in this press release
constitutes an offer or solicitation to purchase or to sell any
securities of Sino Agro Food, Inc.
Forward Looking Statements
This release contains certain "forward-looking statements"
relating to the business of SIAF and its subsidiary companies,
which can be identified by the use of forward-looking terminology
such as "believes, expects" or similar expressions. Such
forward-looking statements involve known and unknown risks and
uncertainties that may cause actual results to be materially
different from those described herein as anticipated, believed,
estimated or expected. Certain of these risks and uncertainties are
or will be described in greater detail in our filings with the
Securities and Exchange Commission. These forward-looking
statements are based on SIAF's current expectations and beliefs
concerning future developments and their potential effects on SIAF.
There can be no assurance that future developments affecting SIAF
will be those anticipated by SIAF. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond
the control of the Company) or other assumptions that may cause
actual results or performance to be materially different from those
expressed or implied by such forward-looking statements. SIAF
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
SOURCE Sino Agro Food, Inc.