TIDMACHL
RNS Number : 8568B
Asian Citrus Holdings Ltd
25 February 2011
Under embargo 7.00am Friday 25 February 2011
Asian Citrus Holdings Limited
Interim Results for the six months ended 31 December 2010
Asian Citrus Holdings Limited ("Asian Citrus"), the largest
orange plantation owner and operator in China, announces interim
results for the six months ended 31 December 2010.
Key Highlights
For illustration
only
----------------- ------------ ------------ --------- --------------------
Six months ended Six months ended
31 December 31 December
----------------- -------------------------- --------- --------------------
2010 2009
2010 (RMBm) 2009 (RMBm) % change (GBPm*) (GBPm*)
----------------- ------------ ------------ --------- --------- ---------
Reported financial information
--------------------------------------------- --------- --------- ---------
Revenue 624.0 398.3 +56.7% 61.7 36.4
----------------- ------------ ------------ --------- --------- ---------
Gross profit 275.4 179.4 +53.5% 27.2 16.4
----------------- ------------ ------------ --------- --------- ---------
EBITDA 578.5 291.6 +98.4% 57.2 26.6
----------------- ------------ ------------ --------- --------- ---------
Profit before
tax 526.4 248.1 +112.2% 52.0 22.7
----------------- ------------ ------------ --------- --------- ---------
Profit
attributable to
shareholders 523.4 247.5 +111.5% 51.7 22.6
----------------- ------------ ------------ --------- --------- ---------
Basic EPS RMB 0.59 RMB 0.32 +84.4% 5.8p 2.9p
----------------- ------------ ------------ --------- --------- ---------
Interim dividend RMB 0.02 - N/A 0.2p -
----------------- ------------ ------------ --------- --------- ---------
Reported financial information adjusted to exclude biological
gain
------------------------------------------------------------------------------
EBITDA 240.3 127.2 +88.9% 23.7 11.6
----------------- ------------ ------------ --------- --------- ---------
Profit before
tax 188.2 83.7 +124.9% 18.6 7.6
----------------- ------------ ------------ --------- --------- ---------
Profit
attributable to
shareholders 185.1 83.0 +123.0% 18.3 7.6
----------------- ------------ ------------ --------- --------- ---------
Basic EPS RMB 0.21 RMB 0.11 +90.9% 2.1p 1.0p
----------------- ------------ ------------ --------- --------- ---------
* Conversion at GBP1 = RMB10.12 and RMB10.95 for the six months
ended 31 December 2010 and 2009 respectively for reference only
Business Highlights
-- Revenue from the sale of oranges grew by approximately 36.6%
to approximately RMB525.7m (1H 2009/10: RMB: 384.8 m)
-- Increased direct sales volumes to supermarkets up by
approximately 21.9% to 38,572 tonnes (1H 2009/10: 31,632 tonnes).
Renewed supply contracts with all existing supermarket
customers
-- Expansion into concentrated juice markets in China through an
approximate HK$2,040 million acquisition of 92.94% equity interest
in Beihai Perfuming Garden Juice Company ("Beihai BPG") with
subsequent share placing of 175,000,000 new ordinary shares in
December 2010 raisingnet proceeds of approximately HK$1,510 million
for repaymentof cash consideration for acquisition of Beihai BPG,
financing expansion and additional working capital requirements for
Beihai BPG
-- Sold 270,000 self-bred saplings to local farmers - high
margin revenue stream offering security of long term supply through
the reciprocal arrangements giving Asian Citrus first right to
purchase the oranges
-- Since the year end, extension of the exclusivity period to 30
April 2011 in respect of the acquisition of a 10,000 mu citrus
fruit plantation in Fuchuan County of Guangxi
-- Declaration of first interim dividendof RMB0.02 per share,
reflecting reduced seasonality of revenues and cashflows following
acquisition of Beihai BPG
Hepu Plantation
-- Fully developed with approximately 1.3 million orange trees,
of which approximately 1.0 million are fruit bearing
-- Replanting programme replacing 63,584 winter orange trees
with improved species of summer orange trees, designed to increase
average yields and achievable revenue per tonne. As expected,
production decreased by approximately 7.3% during the replanting
programme
Xinfeng Plantation
-- Fully planted with1.6 million winter orange trees all of
which are now orange producing
-- Production increased by approximately 55.3% to 93,181 tonnes
(1H 2009/10: 60,019 tonnes)
Hunan Plantation
-- Continued investment, in line with expectations. As at 31
December 2010, approximately RMB209.0 million was invested for land
clearing and cultivation, plantation costs and farmland
infrastructure. Approximately 120,000 orange trees were planted and
a further approximately 320,000 orange trees to be planted in Q1
2011
Beihai BPG
-- Intention to expand production capacity through constructing
a new production facility by the end of 2011 with expected annual
production capacity of 40,000 tonnes
Tony Tong, Chairman, commented:
"The Group is progressing well and is increasing its presence in
the Chinese retail market with higher production volume of direct
sales to supermarkets. The completion of the acquisition of Beihai
BPG is an important milestone for the Group in moving downstream
and offers the Group better flexibility in dealing with the
ever-changing needs of the consumer market. With the expected
growth of the Chinese economy, we are confident that the demand for
high quality oranges and juice concentrates in China will continue
to grow, providing the Group with an exciting opportunity to
further expand its business in both the agricultural and fruits
processing businesses. The Group will continue to build on its
existing market leading position by expanding its distribution
network, increasing its production capacity and enhancing its
sourcing capability through further development of its nursery
business."
- ends -
Asian Citrus
Tony Tong, Chairman and Chief Executive
Officer
Eric Sung, Finance Director 852 2559 0323
Seymour Pierce Limited
Nandita Sahgal, Jonathan Wright (NOMAD) 020 7101 8000
Leti McManus, Richard Redmayne, Vineeta
Manchanda (Broking)
Weber Shandwick Financial 020 7067 0700
Nick Oborne, Stephanie Badjonat, John
Moriarty
Chairman's Statement
I am very pleased to report the results of Asian Citrus Holdings
Limited (the "Company" or "Asian Citrus") and its subsidiaries
(collectively referred to as the "Group") for the six months ended
31 December 2010. For the six months ended 31 December 2010, the
Group's revenue increased by 56.7% from RMB398.3 million to
RMB624.0 million while the net profit increased by 111.5% from
RMB247.5 million to RMB523.4 million.
STRATEGIC OVERVIEW
The Group continued to expand its direct sales to supermarkets
and renewed supply contracts with all of its existing supermarket
customers. During the six months ended 31 December 2010, the Group
sold 38,572 tonnes of oranges directly to supermarkets,
representing an increase of approximately 21.9% over the comparable
period's volume of sales to supermarkets of 31,632 tonnes. The
Group believes that the increasing volume of direct sales to
supermarkets will not only provide the Group with enhanced
profitability but also lead to better product recognition within
China.
The Group is mass producing self-bred saplings from both the
Hepu and Hunan Plantations. In addition to using these saplings for
our own replanting programme at the Hepu Plantation and the new
planting at our Hunan Plantation, the Group sold approximately
270,000 self-bred saplings to local farmers during the six months
ended 31 December 2010. The sales of self-bred saplings provide the
Group with a high margin revenue stream and the capability to
secure long-term supplies of high-quality oranges through
reciprocal agreements with the farmers which offer the Group the
first right to purchase their oranges.
During the six months ended 31 December 2010, the Group
continued to invest in the Hunan Plantation. As at 31 December
2010, the Group had invested approximately RMB209.0 million in the
Hunan Plantation which mainly represents expenditure for land
clearing, land cultivation, planting costs for the orange trees and
other farmland infrastructure. The development of this plantation
is in line with our expectations and approximately 120,000 orange
trees have been planted as at 31 December 2010 with another
approximately 320,000 orange trees to be planted in the first
quarter of 2011.
The Group formally completed the acquisition of 92.94% equity
interest in Beihai BPG on 30 November 2010 and this represents a
major milestone for the Group to expand into the concentrated juice
market in China. In addition to the existing production facilities
of Beihai BPG in Beihai city and Hepu county of Guangxi Zhuang
Autonomous Region (the "Guangxi Region"), we intend to expand the
production capacity of Beihai BPG by constructing a new production
facility by the end of 2011 in the Baise county of the Guangxi
Region. The annual production output capacity of this new facility,
which we plan to open in early 2012, is expected to be
approximately 40,000 tonnes.
OPERATIONS REVIEW
The Hepu Plantation is fully developed with approximately 1.3
million orange trees of which 1.0 million are currently producing
oranges. Output from the Hepu Plantation was 50,517 tonnes for the
six months ended 31 December 2010 which represents a decrease of
approximately 7.3% over the comparable year's production of 54,511
tonnes. The decrease in production volume was anticipated and due
to the ongoing replanting programme at the plantation where 64,194
winter orange trees were replaced with the same number of summer
orange trees during the year ended 30 June 2010.
The Xinfeng Plantation is fully planted with 1.6 million winter
orange trees. During the six months ended 31 December 2010, all the
1.6 million trees were producing oranges (2009: 1.2 million),
yielding 93,181 tonnes of oranges, which represents an increase of
approximately 55.3% over the previous year's production of 60,019
tonnes. Growth was mainly due to increased production from the
first three phases of 1.2 million winter oranges trees, which are
yet to achieve their full maturity, together with the trial
production from the final 400,000 trees.
The Group's replanting programme in the Hepu Plantation
continues and there were approximately 178,000 winter oranges trees
as at 31 December 2010 which are expected to be replanted in the
next three years. Since the period end, 63,584 winter orange trees
have been removed and the corresponding land area has been
replanted with the same number of the new species of summer orange
trees. We believe the improved species of trees being planted will
deliver long term economic benefits by increasing average yields
and achievable revenue per tonne. It is expected that the first
batch of 55,185 trees replanted during 2007 will commence
production in the coming summer of 2011 which will add to our
existing summer orange production.
We have consolidated the trading results of Beihai BPG since the
completion of the acquisition on 30 November 2010, and we are in
the process of integrating the Beihai BPG's business with our own.
Whilst tropical fruit juice concentrates continue to be its major
products, Beihai BPG started to increase the production of orange
juice concentrate in December 2010. Although the orange juice
concentrate production only accounts for a relatively small part of
Beihai BPG's operation for now, we are keen to increase the
production of orange juice concentrate which is one of the most
popular and in-demand fruit juice products in China.
Potential development
The Group entered into a non-legally binding memorandum of
understanding in relation to the acquisition of a state-owned
citrus fruit plantation with approximately 1.1 million fruit trees
and ancillary facilities in the Fuchuan county of the Guangxi
Region on 15 April 2010 and the exclusivity period of this
memorandum of understanding was extended to 30 April 2011 following
the execution of the supplementary memorandum of understanding on
31 January 2011. Whilst we will strive to complete this deal before
the end of the exclusivity period, we will continue to investigate
other suitable fruit plantations for potential acquisition in order
to further strengthen our own supply of high quality fruit
products.
Share placement
In December 2010, 175,000,000 new ordinary shares were placed at
HK$8.88 each, raising net proceeds of approximately HK$1,510
million. The proceeds are intended to be used for (i) paying the
cash consideration of HK$780 million in relation to the acquisition
of Beihai BPG; (ii) financing the expansion of the production
capacity of Beihai BPG; and (iii) financing the corresponding
additional working capital requirement resulting from the expansion
of its production capacity.
Dividends
Following the completion of the acquisition of Beihai BPG, the
board of directors of the Company (the "Board") acknowledges that
the Group is now subject to less seasonality of its revenue and
cashflows. In view of this change, the Board recommends the payment
of an interim dividend of RMB0.02 per share for the six months
ended 31 December 2010. This is the first interim dividend declared
by the Group since it became a public listed company in 2005.
The Company has decided to institute a Scrip Dividend Scheme
whereby shareholders can elect to receive the dividends for the six
months ended 31 December 2010 in the form of shares. A document
providing further details of this Scrip Dividend Scheme will be
sent to shareholders in due course. The interim dividend will be
paid in sterling or HK Dollar on or before 3 May 2011, to
shareholders whose names appear on the register on 11 March 2011,
with an ex-dividend date of 10 March 2011 and 9 March 2011 on The
Stock Exchange of Hong Kong Limited and London Stock Exchange PLC
respectively. The actual translation rate for the purpose of
dividend payment in sterling or HK Dollar will be referenced to the
exchange rate on 11 March 2011.
In order to qualify for receiving the interim dividend,
shareholders registered on the Hong Kong branch register of the
Company are reminded to ensure that all transfers of shares,
accompanied by the relevant share certificates and transfer forms,
must be lodged with the Company's branch share registrar in Hong
Kong, Computershare Hong Kong Investor Services Limited, at Shops
1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong for registration not later than 4:30p.m. on 11
March 2011.
Investor relations
A key priority of the Board is the maintenance of good
communications with shareholders and potential investors. The
Group's management pays regular visits to institutional investors
and private client investment advisers and attends investor
conferences in order to update existing shareholders and potential
investors on the Group's latest business developments.
Outlook
The Group is progressing well and is increasing its presence in
the Chinese retail market with higher production volume of direct
sales to supermarkets. The completion of the acquisition of Beihai
BPG is an important milestone for the Group in moving downstream
and offers the Group better flexibility in dealing with the
ever-changing needs of the consumer market. With the expected
growth of the Chinese economy, we are confident that the demand for
high quality oranges and juice concentrates in China will continue
to grow, providing the Group with an exciting opportunity to
further expand its business in both the agricultural and fruits
processing businesses. The Group will continue to build on its
existing market leading position by expanding its distribution
network, increasing its production capacity and enhancing its
sourcing capability through further development of its nursery
business.
On behalf of the Board, I would also like to take this
opportunity to thank our shareholders, business partners, customers
and employees for their continuous support and contribution to the
growth of Asian Citrus. I look forward to the further integration
of the Asian Citrus and Beihai BPG businesses and I am confident
that the Groupwill continue to deliver strong performance and
create a platform for greater success in the future.
Tony Tong Wang Chow
Chairman
25 February 2011
Management Discussion and Analysis
OPERATING PERFORMANCE
Revenue
The breakdown of revenue by types is as follows:
For the six months ended 31 December
2010 2009
% of % of
RMB'000 total revenue RMB'000 total revenue
Hepu Plantation 194,736 31.2% 190,768 47.9%
Xinfeng Plantation 330,988 53.0% 194,016 48.7%
------- ------------- ------- -------------
Sales of oranges 525,724 84.2% 384,784 96.6%
Sales of processed fruits 69,410 11.1% - -
Sales of self-bred saplings 2,705 0.5% 4,028 1.0%
Sales of properties 26,198 4.2% 9,460 2.4%
Total revenue 624,037 100.0% 398,272 100.0%
======= ============= ======= =============
Revenue from the sale of oranges grew by 36.6% to RMB525.7
million for the six months ended 31 December 2010. This was
achieved by an increase of approximately 25.5% in the Group's
production to 143,698 tonnes combined with increase in average
selling price of oranges of approximately 9% year on year.
The production yield from the Hepu Plantation decreased by 7.3%
from 54,511 tonnes to 50,517 tonnes for the six months ended 31
December 2010 due to the ongoing replanting programme. During the
year ended 30 June 2010,64,194 winter orange trees were removed and
replanted with the same number of the summer orange trees. As the
orange trees continue to mature and more trees reached
orange-bearing age, the production yield from the Xinfeng
Plantation increased significantly by 55.3% to 93,181 tonnes for
the six months ended 31 December 2010 from 60,019 tonnes in the
comparable period last year.
After the completion of acquistion of 92.94% equity interest of
Beihai BPG on 30 November 2010, the results of Beihai BPG have been
consolidated into the Group. For the month ended 31 December 2010,
the revenue from the sale of processed fruit was approximately
RMB69.4 million.
For the six months ended 31 December 2010, RMB2.7 million was
recognised from the sales of the approximately 270,000 self-bred
saplings to local farmers.
In addition, the transfer of ownership and titles of 49
wholesale units of Phase I of the Xinfeng Development was completed
during the six months ended 31 December 2010. The Group recognised
revenue and corresponding costs (excluding business tax and other
relevant taxes and charges that may be levied) of approximately
RMB26.2 million and RMB13.7 million respectively.
Combining the above, the Group's revenue increased by 56.7% to
RMB624.0 million for the six months ended 31 December 2010.
All of the Group's oranges were sold domestically. The Group's
customers from the sales of oranges can be divided into three
categories, namely corporate customers, wholesale customers and
supermarket chains. The breakdown of types of customers is as
follows:
For the six months ended 31 December
2010 2009
% of sale of oranges % of sale of oranges
Types of customers
Corporate customers 40.3% 43.2%
Supermarket chains 31.4% 33.3%
Wholesale customers 27.6% 22.3%
Others 0.7% 1.2%
Total 100.0% 100.0%
==================== ====================
For the six months ended 31 December 2010, the production volume
and revenue to supermarket chains represented approximately 26.8%
and 31.4% respectively of the Group, compared to approximately
27.6% and 33.3% for the six months ended 31 December 2009. For the
Hepu Plantation, the production volume and revenue to supermarket
chains increased to 32.2% and 44.1% respectively (12/2009: 28.9%
and 40.4%). As the Xinfeng Plantation was still at its early stage,
the oranges were mainly sold to corporate and wholesale customers,
thereby negatively impacting the percentage of sales to supermarket
chains.
For the Hepu Plantation and Xinfeng Plantation, the production
volume sold to supermarkets was 16,248 tonnes and 22,324 tonnes for
the six months ended 31 December 2010, increasing from 15,773
tonnes and 15,859 tonnes for the six months ended 31 December 2009
respectively.
Cost of sales
The breakdown of cost of sales is as follows:
For the six months ended 31 December
2010 2009
% of % of
RMB'000 cost of sales RMB'000 cost of sales
Inventories used
Fertilisers 158,326 55.6% 117,436 55.5%
Packaging materials 16,643 5.8% 16,999 8.0%
Pesticides 25,095 8.8% 15,946 7.5%
------- -------------- ------- --------------
200,064 70.2% 150,381 71.0%
Production overheads
Direct labour 26,902 9.5% 20,054 9.5%
Depreciation 41,546 14.6% 34,949 16.3%
Others 16,127 5.7% 6,298 3.2%
Cost of sales of oranges 284,639 100% 211,682 100%
============== ==============
Cost of sales of
processed fruits 49,110 -
Cost of sales of
self-bred saplings 1,109 1,270
Cost of sales of properties 13,742 5,926
------- -------
Total cost of sales 348,600 218,878
======= =======
Cost of sale of oranges principally consists of the costs of raw
materials such as fertilisers, packaging materials, pesticides,and
other direct costs such as direct labour, depreciation and
production overheads. The production cost of sale of oranges
increased by 34.5% to RMB284.6 million (12/2009: RMB211.7 million).
The increase in production costs was principally due to the
increase in raw materials utilised for higher production volumes
and the trial production for the final batch of 400,000 orange
trees in Xinfeng Plantation during the period.
The unit cost of production in the Hepu Plantation increased by
19.4% to approximately RMB1.72 per kg for the six months ended 31
December 2010 (12/2009: RMB1.44 per kg) as a result of the decrease
in production volume of winter oranges due to the ongoing
replanting programme.
The unit cost of production in the Xinfeng Plantation decreased
by 4.5% to approximately RMB2.12 per kg for the six months ended 31
December 2010 (12/2009: RMB2.22 per kg) as a result of the better
economies of scale achieved from the increased maturity of the
oranges trees.
The combined unit cost of production increased by 7.0% to
RMB1.98 per kg from RMB1.85 per kg in the comparable period.
Cost of sale of processed fruit mainly includes the costs of
fruit and other direct costs such as direct labour, depreciation
and production overheads. For the one month ended 31 December 2010,
the cost of processed fruit was approximately RMB49.1 million.
Gross profit
The Group's overall gross profit increased by 53.5% to
approximately RMB275.4 million for the six months ended 31 December
2010 (12/2009: RMB179.4 million). The improvement in gross profit
was the result of an increase in the production output of the
Group's winter orange trees of 25.5%, an increase in the average
price of oranges of approximately 9% year on year and inclusion of
the one month gross profit of Beihai BPG of RMB20.3 million.
The following table sets out a breakdown of the Group's gross
profit margin by plantation:
For the six months ended 31 December
2010 2009
Hepu Plantation 55.4% 58.9%
Xinfeng Plantation 40.2% 31.3%
The following table sets out a breakdown of the Group's gross
profit margin by business:
For the six months ended 31 December
2010 2009
Sales of oranges 45.9% 45.0%
Sales of processed fruits 29.2% N/A
Sales of self-bred saplings 59.0% 68.5%
Sales of properties 47.5% 37.3%
00 00
------------------ ------------------
Overall gross profit 44.1% 45.0%
================== ==================
The gross margin of the Hepu Plantation dropped to approximately
55.4% for the six months ended 31 December 2010 (12/2009: 58.9%) as
a result of the decrease in the production volume of winter oranges
from the ongoing replanting programme.
The Xinfeng Plantation, benefiting from trees continuing to
mature and more trees reaching orange bearing age, saw the gross
margin increasing to approximately 40.2% for the six months ended
31 December 2010 (12/2009: 31.3%). As a result of the continuous
growth in production volume and better economies of scale, we
expect margins of the Xinfeng Plantation will continue to grow over
the medium term.
Combining the above, the overall gross profit margin from sales
of oranges slightly increased to approximately 45.9% (12/2009:
45.0%) for the six months ended 31 December 2010.
Other income
The Group recorded a gain of RMB338.2 million from a net gain on
change in fair value of biological assets for the six months ended
31 December 2010, compared to a gain of RMB164.5 million for the
last corresponding period in 2009. The increase was mainly due to
the higher selling price of the oranges achieved by the Group and
the transfer of 400,000 infant trees to orange trees and the
increased maturity of orange trees in Xinfeng Plantation during the
period.
Selling and distribution expenses
Selling and distribution expenses mainly comprise sales
commissions, advertising, salaries and welfare of sales personnel,
travelling and transportation expenses. The selling and
distribution expenses of the Group increased from approximately
RMB18.8 million for the six months ended 31 December 2009 to
approximately RMB27.4 million for the six months ended 31 December
2010, representing an increase of 45.7%, mainly resulting from the
increased sale activities at the Xinfeng Plantation and Beihai
BPG.
General and administrative expenses
General and administrative expenses comprise mainly salary,
office administration expenses, depreciation, amortization, raw
material utilised for infant trees and research costs. The general
and administrative expenses of the Group were approximately RMB63.4
million for the six months ended 31 December 2010 (12/2009: RMB77.6
million). The decrease was mainly due to less raw materials of
RMB22.9 million, being utilised for the infant trees in Xinfeng
Plantation as all trees became fruit bearing during the period and
there was an one-off listing expense of RMB16.3 million in the
corresponding period last year. However, the decrease was partially
offset by the increase of the share based payment of RMB15.2
million in relation to the employee share options, more raw
materials of RMB4.0 million being utilised for the infant trees in
Hepu Plantation due to the replanting programme and professional
fees of RMB2.1 million arising from the acquisition of Beihai
BPG.
Profit
Pre-tax profit was approximately RMB526.4 million for the six
months ended 31 December 2010, representing an increase of 112.2%
as compared to the corresponding period in 2009. The profit
attributable to shareholders for the six months ended 31 December
2010 increased to RMB523.4 million, compared to RMB247.5 million
for 2009, up 111.5%.
Pre-tax profit excluding the net gain on change in fair value of
biological assets was RMB188.2 million for the six months ended 31
December 2010, representing an increase of 124.9% as compared to
the corresponding period in 2009. The profit attributable to
shareholders excluding the net gain on change in fair value of
biological assets for the six months ended 31 December 2010 was
RMB185.1 million, compared to RMB83.0 million for 2009, up
123.0%.
The increase was mainly attributable to the increase in
production volume of winter oranges, the increase in average
selling price of oranges year on year, the results of Beihai BPG
having been consolidated into the Group after the completion of
acquisition of 92.94% equity interest of Beihai BPG on 30 November
2010 and the net gain on change in fair value of the biological
assets.
INTERIM DIVIDEND
The Board has resolved to declare an interim dividend of RMB0.02
per share for the six months end 31 December 2010 (12/2009:
Nil).
PRODUCTIVITY
The production volume of winter oranges increased to 143,698
tonnes for the six months ended 31 December 2010, representing an
increase of 25.5%.
The production volume of winter oranges in Hepu Plantation
dropped from approximately 54,511 tonnes last year to approximately
50,517 tonnes in the current year, representing a decrease of
approximately 7.3%, which was due to the ongoing replanting
programme. During the year ended 30 June 2010, 64,194 winter orange
trees were removed and replanted with the same number of the summer
orange trees.
In addition, the production volume of winter oranges from the
Xinfeng Plantation increased from approximately 60,019 tonnes last
year to approximately 93,181 tonnes in the current year,
representing an increase of approximately 55.3% due to increased
maturity and more trees becoming fruit bearing during the
period.
CAPITAL STRUCTURE
As at 31 December 2010, there were 1,213,336,378 shares in
issue. Based on the closing price of HKD9.64 as at 31 December
2010, the market capitalisation of the Company was approximately
HKD11,696.6 million as at 31 December2010 (GBP975.9 million).
HUMAN RESOURCES
There were a total of 1,381 employees of the Group as at 31
December 2010. The Group aims to attract, retain and motivate high
calibre individuals with a competitive remuneration package.
Remuneration packages are performance-linked and business
performance, market practices and competitive market conditions are
all taken into consideration. The Group reviews the employees'
remuneration packages on an annual basis. The Group also places
heavy emphasis on staff training and development so that employees
can reach their maximum potential.
FINANCIAL PERFORMANCE
31 December 30 June
2010 2010
Current ratio (x) 3.34 21.33
Quick ratio (x) 3.30 19.21
Net debt to equity (%) Net cash Net cash
For the six months ended
31 December 31 December
2010 2009
Asset turnover (x) 0.08 0.12
Basic earnings excluding net
on change in fair value of biological
assets per share (RMB) 0.21 0.11
Basic earnings per share (RMB) 0.59 0.32
Liquidity
The current and quick ratios were 3.34 and 3.30 respectively.
The liquidity of the Group remained healthy with sufficient
reserves for both operation and development after the acquisition
of Beihai BPG.
Profitability
The asset turnover of the Group dropped to 0.08 (12/2009: 0.12)
for the six months ended 31 December 2010 as we only consolidated
one month results of Beihai BPG during the period.
The basic earnings excluding net gain on change in fair value of
biological assets per share for the six months ended 31 December
2010 was RMB0.21 (12/2009: RMB0.11).
The basic earnings per share for the six months ended 31
December 2010 was RMB0.59 (12/2009: RMB0.32). This was driven by
the 123.0% increase in profit attributable to shareholders for the
period, but was partially offset by the dilution from the issuance
of new ordinary shares.
Debt ratio
The net cash positions of the Group were RMB2,051.3 million and
RMB975.1 million at 31 December 2010 and 30 June 2010
respectively.
Internal cash resource
The Group's major internal cash resource is its cash and bank
balances. The Group did not have any outstanding bank borrowings as
at 31 December 2010.
Charge on assets and contingent liabilities
None of the Group's assets were pledged and the Group did not
have any material contingent liabilities as at 31 December
2010.
Capital commitment
As at 31 December 2010, the Group had a capital commitment of
approximately RMB137.1 million mainly in relation to the
construction of the farmland infrastructure in the Hunan Plantation
and a new processing plant of Beihai BPG.
Foreign exchange risk
The Group is exposed to currency risk primarily through its cash
and cash equivalents that are denominated in a currency other than
the functional currency of the operations to which they relate. The
currencies giving rise to this risk are primarily Hong Kong
dollars, United States dollars and British pounds.
The Group undertakes certain transactions denominated in foreign
currencies, hence exposures to exchange rate fluctuation arise. The
Group currently does not use any derivative contracts to hedge
against its exposure to currency risk. Management manages its
currency risk by closely monitoring the movement of the foreign
currency rate and considers hedging significant foreign currency
exposure should the need arise.
Condensed Consolidated Income Statement
For the six months ended 31 December 2010
Six months ended Year ended
31 December 30 June
2010 (Unaudited) 2009 2010
Note (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Turnover 5 624,037 398,272 812,482
Cost of sales (348,600) (218,878) (344,105)
----------------- ------------ ------------
Gross profit 275,437 179,394 468,377
Other income 6 4,201 668 1,845
Net gain on change in fair
value of biological
assets 338,204 164,462 306,000
Selling and distribution
expenses (27,434) (18,787) (45,502)
General and administrative
expenses (63,458) (77,603) (143,318)
Other operating expenses (479) - -
Profit from operations 526,471 248,134 587,402
Finance costs (25) (11) (81)
----------------- ------------ ------------
Profit before income tax 7 526,446 248,123 587,321
Income tax expense 8 (1,785) (648) (1,854)
----------------- ------------ ------------
Profit for the period/year 524,661 247,475 585,467
================= ============ ============
Attributable to
Equity shareholders of the
Company 523,351 247,475 585,467
Non-controlling interest 1,310 - -
----------------- ------------ ------------
524,661 247,475 585,467
================= ============ ============
RMB RMB RMB
Earnings per share 9
- Basic 0.586 0.321 0.741
================= ============ ============
- Diluted 0.583 0.318 0.735
================= ============ ============
Details of dividends payable to equity shareholders of the
Company attributable to the profit for the period/year are set out
in note 10.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2010
Year
Six months ended ended 30
31 December June
2010 (Unaudited) 2009 2010
(Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Profit for the period/year 524,661 247,475 585,467
Other comprehensive
income for the
period/year
Exchange differences on
translation of financial
statements of foreign
operations, net of nil
tax 2,045 - -
------------------ ------------ ----------
Total comprehensive income
for the period/year 526,706 247,475 585,467
================== ============ ==========
Attributable to
Equity shareholders of the
Company 525,396 247,475 585,467
Non-controlling interest 1,310 - -
------------------ ------------ ----------
526,706 247,475 585,467
================== ============ ==========
Condensed Consolidated Statement of Financial Position
At 31 December 2010
31 December 30 June
2010 2009 2010
Note (Unaudited) (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
ASSETS
Non-current assets
Property, plant and equipment 1,479,227 1,147,724 1,161,437
Land use rights 70,569 55,468 54,841
Construction-in-progress 131,943 19,328 64,328
Biological assets 1,791,810 1,306,098 1,449,565
Intangible assets 52,598 31,500 36,800
Interest in an associate - - -
Deposits 161,888 - -
Goodwill 13(d) 1,157,261 - -
4,845,296 2,560,118 2,766,971
Current assets
Biological assets 3,412 - 90,221
Properties for sale 5,280 28,329 18,497
Inventories 20,446 672 841
Trade and other receivable 11 141,088 45,002 19,629
Cash and cash equivalents 2,929,439 574,865 975,074
------------- ------------- -----------
3,099,665 648,868 1,104,262
------------- ------------- -----------
Total assets 7,944,961 3,208,986 3,871,233
============= ============= ===========
EQUITY AND LIABILITIES
Equity
Share capital 12,013 8,126 8,767
Reserves 6,924,690 3,134,004 3,810,687
------------- ------------- -----------
Total equity attributable to
equity
shareholders 6,936,703 3,142,130 3,819,454
Non-controlling interest 79,120 - -
------------- ------------- -----------
7,015,823 3,142,130 3,819,454
------------- ------------- -----------
Current liabilities
Trade and other payables 12 928,966 61,183 44,391
Due to related parties - 5,250 7,110
Income tax payables 172 423 278
------------- ------------- -----------
Total liabilities 929,138 66,856 51,779
------------- ------------- -----------
Total equity and liabilities 7,944,961 3,208,986 3,871,233
============= ============= ===========
Net current assets 2,170,527 582,012 1,052,483
============= ============= ===========
Total assets less current
liabilities 7,015,823 3,142,130 3,819,454
============= ============= ===========
Condensed Consolidated Statement of Cash Flows
For the six months ended 31 December 2010
Six months ended Year ended
31 December 30 June
2010 2009 2010
(Unaudited) (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Cash flows from operating
activities
Profit before income tax 526,446 248,123 587,321
Adjustments for:
Interest income (2,290) (668) (1,845)
Finance costs 25 11 81
Depreciation 38,887 33,677 68,492
Share-based payments 19,542 4,285 10,363
Amortisation of land use rights 632 617 1,244
Amortisation of intangible
assets 1,651 1,200 2,400
Net gain on change in fair
value of biological assets (338,204) (164,462) (306,000)
Write off of property, plant and
equipment 71 - -
Operating profit before working
capital changes 246,760 122,783 362,056
Movements in working capital
elements
Properties for sales 13,217 5,782 19,656
Inventories 1,982 (33) (202)
Biological assets 86,809 54,638 (35,583)
Trade and other receivables (9,700) (30,101) (4,728)
Trade and other payables (19,286) 12,448 (4,344)
Due to related parties (7,110) 2,496 4,356
------------- ------------- -----------
Cash generated from operations 312,672 168,013 341,211
Income tax paid (1,891) (532) (1,883)
------------- ------------- -----------
Net cash generated from
operating activities 310,781 167,481 339,328
------------- ------------- -----------
Condensed Consolidated Statement of Cash Flows (continued)
For the six months ended 31 December 2010
Six months ended Year ended
31 December 30 June
2010 2009 2010
(Unaudited) (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Cash flows from investing
activities
Purchase of property, plant and
equipment (2,338) (1,159) (1,698)
Additions to
construction-in-progress (101,998) (36,791) (133,822)
Net (addition) / disposal of
biological assets (4,041) 389 (1,540)
Deposits paid for acquisition of
property, plant and equipment (21,538) - -
Additions to intangible assets (2,000) (2,000) (8,500)
Interest received 2,290 668 1,845
Acquisition of subsidiaries 505,427 - -
------------- ------------- -----------
Net cash generated from/( used
in ) investing activities 375,802 (38,893) (143,715)
------------- ------------- -----------
Cash flows from financing
activities
Proceeds from issue of new
shares from placement 1,284,878 - 328,375
Proceeds from issue of new
shares upon exercise of share
options 28,122 5,259 10,138
Dividend s paid (45,193) (20,212) (20,212)
Finance costs paid (25) (11) (81)
------------- ------------- -----------
Net cash generated from/( used
in ) financing activities 1,267,782 (14,964) 318,220
------------- ------------- -----------
Net increase in cash and cash
equivalents 1,954,365 113,624 513,833
Cash and cash equivalents at
beginning of period/year 975,074 461,241 461,241
------------- ------------- -----------
Cash and cash equivalents at end
of period/year 2,929,439 574,865 975,074
============= ============= ===========
Notes to the Interim Financial Information
1 GENERAL INFORMATION
Asian Citrus Holdings Limited (the "Company") was incorporated
in Bermuda on 4 June 2003 as an exempted company with limited
liability under the Companies Act of Bermuda and its shares are
listed on the Main Board of The Stock Exchange of Hong Kong Limited
("HKEx"), AIM of the London Stock Exchange and PLUS Market plc.
The address of the registered office of the Company is Clarendon
House, 2 Church Street, Hamilton, HM11, Bermuda. The address of its
principal place of business is Rooms 1109-1112, Wayson Commercial
Building, 28Connaught Road West, Hong Kong.
The principal activities of the Company and its subsidiaries
(together referred to as the "Group") are planting, cultivation and
sale of agricultural produce, developing and sale of property units
in an agricultural wholesale market and orange processing centre,
manufacture and sale of fruit juice concentrates, fruit purees and
others, and manufacture and sale of frozen fruits and
vegetables.
2 BASIS OF PREPARATION
The interim financial information is presented in Renminbi
("RMB"), rounded to the nearest thousand, unless otherwise
stated.
The interim financial information has been prepared in
accordance with International Accounting Standard ("IAS") 34,
"Interim Financial Reporting", issued by the International
Accounting Standards Board ("IASB"), the applicable disclosure
provisions of the Rules Governing the Listing of Securities on the
HKEx and the AIM Rules issued by the London Stock Exchange.
The interim financial information has been prepared under the
historical cost convention, as modified by the revaluation of
biological assets which are carried at their fair values. The
principal accounting policies adopted in the preparation of this
interim financial information are consistent with those followed in
the Group's annual financial statements for the year ended 30 June
2010, except for the accounting policy changes that are expected to
be reflected in the Group's annual financial statements for the
year ending 30 June 2011. Details of these changes in accounting
policies are set out in note 3.
The preparation of interim financial information in conformity
with IAS 34 requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses on a year to
date basis. Actual results may differ from these estimates.
This interim financial information contains condensed
consolidated financial statements and selected explanatory notes.
The notes include an explanation of events and transactions that
are significant to an understanding of the changes in financial
position and performance of the Group since the 2010 annual
financial statements. The condensed consolidated financial
statements and notes thereon do not include all of the information
required for a full set of financial statements prepared in
accordance with International Financial Reporting Standards
("IFRSs").
The interim financial information is unaudited, but has been
reviewed by the Company's Audit Committee. This interim financial
information has also been reviewed by the Company's auditor in
accordance with International Standard on Review Engagements 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity".
3 CHANGES IN ACCOUNTING POLICIES
The IASB has issued one new IFRS, a number of amendments to
IFRSs and new Interpretations that are first effective for the
current accounting period of the Group and the Company. Of these,
the following developments are relevant to the Group's financial
statements:
l Amendments to IFRS 2 "Share-based Payment - Group Cash-settled
Share-based Payment Transactions"
l Improvements to IFRSs (2009)
l Amendments to IFRSs contained in Improvements to IFRSs (2010)
and effective for accounting periods on or after 1 July 2010
The above amendments to IFRSs have had no material impact on the
Group's results of operations and financial position, or do not
contain any additional disclosure requirements specifically
applicable to the interim financial information.
Up to the date of issue of this interim financial information,
the IASB has issued a number of amendments, new standards and
Interpretations which are not yet effective for the year ending 30
June 2011 and which have not been adopted in the interim financial
information. Of these developments, the following relates to
matters that may be relevant to the Group's operation and financial
statements:
Effective for
accounting periods
beginning on
or after
Amendments to IFRSs contained in Improvements 1 January 2011
to IFRSs (2010)
IAS 24 (Revised 2009) "Related Party 1 January 2011
Disclosures"
Amendments to IAS 12 "Income Taxes - 1 January 2012
IAS 12
Deferred Tax: Recovery of Underlying
Assets"
IFRS 9 "Financial Instruments" 1 January 2013
The Group is in the process of making an assessment of what the
impact of these amendments is expected to be in the period of
initial application but is not yet in a position to determine
whether their adoption will have a significant impact on the
Group's results of operations and financial position.
4 SEGMENT INFORMATION
The Group manages its businesses by lines of business. In a
manner consistent with the way in which information is reported
internally to the Group's most senior executive management for the
purposes of resource allocation and performance assessment, the
Group has presented the following reportable segments:
l Agricultural produce - planting, cultivation and sale of
agricultural produce
l Processed fruits - manufacture and sale of fruit juice
concentrates, fruit purees, frozen fruits and vegetables
l Other - developing and sale of property units in an
agricultural wholesale market and orange processing centre
Following the completion of acquisition of BPG Food &
Beverage Holdings Ltd. and its subsidiaries (together the "BPG
group"), the Group expanded its business to processed fruits
operation.
(a) Segment results, assets and liabilities
Six months ended 31 December 2010:
Agricultural Processed
produce fruits Other Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 RMB'000
Revenue from external
customers 528,429 69,410 26,198 624,037
Reportable segment profit 499,105 18,031 9,310 526,446
Reportable segment assets 6,642,734 1,141,093 162,033 7,945,860
Additions to non-current
segment
assets during the period 109,671 22,195 - 131,866
Reportable segment
liabilities 700,564 229,697 81,287 1,011,548
Six months ended 31 December 2009:
Agricultural Processed
produce fruits Other Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 RMB'000
Revenue from external
customers 388,812 - 9,460 398,072
Reportable segment profit 246,639 - 1,484 248,123
Reportable segment assets 3,037,790 - 172,096 3,209,886
Additions to non-current
segment
assets during the period 39,439 - 120 39,559
Reportable segment
liabilities 43,026 - 98,891 141,917
Year ended 30 June 2010:
Agricultural Processed
produce fruits Other Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 RMB'000
Revenue from external
customers 784,721 - 27,761 812,482
Reportable segment profit 584,614 - 2,707 587,321
Reportable segment assets 3,705,608 - 166,525 3,872,133
Additions to non-current
segment
assets during the period 140,641 - 307 140,948
Reportable segment
liabilities 38,180 - 93,304 131,484
(b) Reconciliation of reportable segment assets and
liabilities
Year
Six months ended ended 30
31 December June
2010 (Unaudited) 2009 2010
(Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Assets
Reportable segment assets 7,945,860 3,209,886 3,872,133
Elimination of inter-segment
receivables (899) (900) (900)
Total assets 7,944,961 3,208,986 3,871,233
================== ============ ==========
Liabilities
Reportable segment liabilities 1,011,548 141,917 131,484
Elimination of inter-segment
payables (82,410) (75,061) (79,705)
------------------ ------------ ----------
Total liabilities 929,138 66,856 51,779
================== ============ ==========
5 TURNOVER
Turnover represented the total invoiced value of goods supplied
to customers and completed property units delivered to buyers. The
amount of each significant category of revenue recognised in
turnover is as follows:
Six months ended Year ended
31 December 30 June
2010 2009 2010
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Sales of oranges 525,724 384,784 777,665
Sales of self-bred saplings 2,705 4,028 7,056
Sales of processed fruits 69,410 - -
Sales of property units 26,198 9,460 27,761
624,037 398,272 812,482
=========== =========== ==========
6 OTHER INCOME
Six months ended Year ended
31 December 30 June
2010 2009 2010
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Interest income 2,290 668 1,845
Reversal of impairment loss
on interest in an associate 1,703 - -
Sundry income 208 - -
----------- ----------- ----------
4,201 668 1,845
=========== =========== ==========
7 PROFIT BEFORE INCOME TAX
Profit before income tax is stated after charging/(crediting)
the following:
Six months ended Year ended
31 December 30 June
2010 2009 2010
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Staff costs (including directors'
emoluments)
- Salaries, wages and other
benefits 36,429 26,956 45,632
- Share-based payments 19,542 4,285 10,363
- Employee retirement benefits 446 287 631
----------- ----------- ----------
56,417 31,528 56,626
Amortisation of land use
rights 632 617 1,244
Amortisation of intangible
assets 1,651 1,200 2,400
Auditor's remuneration 650 612 1,319
Cost of agricultural produce
sold # 285,748 212,952 321,506
Cost of property units sold 13,742 5,926 20,337
Cost of inventories of processed
fruits recognised as expenses 48,700 - -
Depreciation of property,
plant and
equipment 38,887 33,677 68,492
Add: Realisation of depreciation
previously capitalised as
biological assets 12,746 8,021 8,021
Less: Amount capitalised
as biological assets (1,891) - (13,332)
----------- ----------- ----------
49,742 41,698 63,181
Exchange losses, net 1,218 1,073 1,277
Operating lease expenses
- plantation base 4,378 4,634 7,410
- office premises 1,525 399 775
Research and development costs 4,753 2,323 5,795
Write off of property, plant
and equipment 71 - -
=========== =========== ==========
# Cost of agricultural produce sold includes RMB73,097,000 (six
months ended 31 December 2009: RMB59,686,000, year ended 30 June
2010: RMB87,205,000) relating to staff costs, depreciation and
operating lease charges, which amount is also included in the
respective total amounts disclosed separately above for each of
these types of expenses.
8 INCOME TAX EXPENSE
Income tax expense in the condensed consolidated income
statement represents:
Six months ended Year ended
31 December 30 June
2010 2009 2010
(Unaudited) (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
PRC enterprise income tax -
provision for the
period/year 983 355 1,041
Land appreciation tax -
provision for the
period/year 802 293 813
1,785 648 1,854
============= ============= ===========
(i) Pursuant to the rules and regulations of Bermuda and the
BVI, the Group is not subject to any income tax in Bermuda and
BVI.
(ii) No Hong Kong profits tax has been provided as the Group did
not have assessable profit arising in or derived from Hong
Kong.
(iii) The provision for PRC enterprise income tax is based on
the respective applicable rates on the estimated assessable income
of the Group's subsidiaries in the PRC as determined in accordance
with the relevant income tax rules and regulations of the PRC.
According to the PRC tax law, its rules and regulations,
enterprises that engage in certain qualifying agricultural business
are eligible for certain tax benefits, including full enterprise
income tax exemption on profits derived from such business. Certain
operating subsidiaries of the Group in the PRC engaged in
qualifying agricultural business are entitled to full exemption of
enterprise income tax.
The applicable enterprise income tax rate of the Group's other
operating subsidiaries in the PRC is 25%.
(iv) Land appreciation tax is levied at progressive rates
ranging from 30% to 60% on the appreciation of land value, being
the proceeds of sales of properties less deductible expenses
including costs for land use rights and all property development
expenses.
(v) PRC withholding income tax
Under the PRC tax law, profits of the Group's subsidiaries in
the PRC derived since 1 January 2008 is subject to withholding
income tax at rates of 5% or 10% upon the distribution of such
profits to foreign investors or companies incorporated in Hong
Kong, or for other foreign investors, respectively. Pursuant to the
grandfathering arrangements of the PRC tax law, dividends
receivable by the Group from its PRC subsidiaries in respect of the
undistributed profits derived prior to 31 December 2007 are exempt
from the withholding income tax. As at 31 December 2010, no
deferred tax liabilities have been recognised in respect of the tax
that would be payable on the unremitted profits of the PRC
subsidiaries derived since 1 January 2008 profits as the Company is
in a position to control the dividend policy of the PRC
subsidiaries and no distribution of such profits is expected to be
declared from the PRC subsidiaries in the foreseeable future.
9 EARNINGS PER SHARE
Six months ended Year ended
31 December 30 June
2010 2009 2010
(Unaudited) (Unaudited) (Audited)
RMB'000 RMB'000 RMB'000
Earnings
Profit attributable to
shareholders used in basic
and diluted earnings per
share calculation 523,351 247,475 585,467
============= ============= =============
Weighted average number of
shares '000 '000 '000
Issued ordinary shares at
beginning of period/year 852,650 770,560 770,560
Effect of shares issued to
shareholders participating in
the scrip dividend 38 43 3,981
Effect of shares upon exercise
of share options 8,308 173 2,881
Effect of shares issued as
part of the consideration for
acquisition of subsidiaries 28,549 - -
Effect of shares upon
placement 3,804 - 13,227
Weighted average number of
ordinary shares used in basic
earnings per share
calculation 893,349 770,776 790,649
Effect of dilutive potential
shares in respect of share
options 3,690 6,514 5,673
Weighted average number of
ordinary shares used in
diluted earnings per share
calculation 897,039 777,290 796,322
============= ============= =============
10 DIVIDENDS
An interim dividend of RMB0.02 per ordinary share in respect
ofthe six months ended 31December 2010 (six months ended 31
December 2009: RMBnil) was declared after the end of reporting
period.The interim dividend has not been recognised as liability at
December 2010.
A final dividend of RMB0.10 and special dividend of RMB0.02 per
ordinary share in respect of the year ended 30 June 2010 was paid
on 31 December 2010.
11 TRADE AND OTHER RECEIVABLES
Included in trade and other receivables are trade receivables
with the ageing analysis as follows:
31 December 30 June
2010 2009 2010
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Neither past due nor impaired 57,972 27,702 1,348
----------- ----------- ---------
Less than 1 month past due - 132 116
1 to 3 months past due - - -
3 to 6 months past due 43 - -
6 to 12 months past due 35 622 506
over 1 year past due 105 - 545
Amount past due but not
impaired 183 754 1,167
----------- ----------- ---------
58,155 28,456 2,515
=========== =========== =========
Included in the Group's trade receivables are debtors with an
aggregate carrying amount of RMB183,000 (31 December 2009:
RMB754,000, 30 June 2010: RMB1,167,000) which are past due at the
end of the reporting period and for which the Group has not
provided any impairment loss as the Group holds collateral over
those balances.
12 TRADE AND OTHER PAYABLES
Included in trade and other payables are trade payables with the
ageing analysis of trade payables including amounts due to related
parties, by due date as follows:
31 December 30 June
2010 2009 2010
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Due within 3 months on demand 11,612 19,999 26,442
Due after 3 months but within
6 months
Due after 6 months but within 413 1,405 51
1 year 104 - 95
Due over 1 year 59 - -
----------- ----------- ---------
12,188 21,404 26,588
=========== =========== =========
Represented by:
Trade payables 12,188 16,154 19,478
Amounts due to related parties - 5,250 7,110
----------- ----------- ---------
12,188 21,404 26,588
=========== =========== =========
13 ACQUISITION OF SUBSIDIARIES
On 30 November 2010, the Company completed the acquisition of
the entire issued share capital of BPG Food & Beverage Holdings
Ltd. which, through its wholly-owned subsidiaries, holds a total of
92.94% indirect equity interest in Beihai BPG. Beihai BPG, together
with its subsidiaries, is principally engaged in manufacture and
sales of fruits juice concentrates, fruit purees, frozen fruits and
vegetables in the PRC. Details of this acquisition are set out in
the Company's circular dated 1 November 2010.
(a) Consideration transferred
Equivalent
to
HK$'000 RMB'000
Cash consideration payable included
in other payables 780,000 666,510
Fair value of 164,153,646 ordinary shares
issued 1,526,629 1,304,504
2,306,629 1,971,014
========== ===========
Cash consideration of HK$780,000,000 (equivalent to
RMB666,510,000) was settled in January 2011.
The fair value of 164,153,646 ordinary shares issued as part of
the consideration was determined based on the published share price
available on 30 November 2010.
Acquisition-related costs amounting to RMB2,129,000 have been
excluded from the cost of acquisition and have been recognised as
an expense, within the general and administrative expenses in the
condensed consolidated income statement.
(b) The fair value of the identifiable assets and liabilities
arising from the acquisition as at the date of acquisition is as
follows:
Fair value
RMB'000
Non-current assets
Property, plant and equipment 315,892
Land use rights 16,360
Construction-in-progress 4,135
Intangible assets 15,449
Deposits 140,350
Current assets
Inventories 21,587
Trade and other receivables 111,759
Cash and cash equivalents 505,427
Current liabilities
Trade and other payables (239,396)
891,563
===========
(c) Non-controlling interest
The non-controlling interest (7.06%) in certain subsidiaries of
BPG Food & Beverage Holdings Ltd. recognised at the acquisition
date was measured at the non-controlling interest's proportionate
share of the referent's net identifiable assets as at the
acquisition date.
(d) Goodwill arising on acquisition
RMB'000
Consideration transferred 1,971,014
Non-controlling interest 77,810
Less: Fair value of net identifiable
net assets acquired (891,563)
Goodwill arising on acquisition 1,157,261
==========
The goodwill arising on this acquisition is attributable to the
expected earnings growth of BPG group and synergies expected to be
achieved as a result of combining BGP group with the rest of the
Group, and not expected to be deductible for tax purposes.
(e) Cash inflow arising on acquisition
RMB\'000
Cash and cash equivalent balances acquired 505,427
========
(f) Impact of acquisition on the results of the Group
From the date of acquisition to 31 December 2010, the BPG group
contributed RMB69,410,000 to turnover and RMB18,031,000 to profit
for the period.
Had this acquisition been effected on from 1 July 2010, the BPG
group would have contributedRMB426,237,000 to turnover and
RMB125,463,000 to profit for the period. This pro-forma information
is for illustration purposes and should not be viewed as an
indication of the results of operations that actually would have
occurred if the acquisition had been completed on 1 July 2010.
14 COMPARATIVE FIGURES
Certain expenses for the six-month period ended 31 December 2010
have been classified according to the function rather than the
nature as in previous reporting periods. The Group's management
considers this revised presentation more appropriately reflects the
results of the Group's expanded operations. In order to conform to
the current period's presentation, certain comparative figures for
prior reporting periods have been reclassified.
15 FINANCIAL INFORMATION
The results announcement was approved by the Board on 25
February 2011. The financial information has been prepared on a
going concern basis in accordance with International Financial
Reporting Standards. The accounting policies applied in preparing
the financial information are consistent with those adopted and
disclosed in the Group's consolidated financial statements for the
year ended 30 June 2010.
Other Information
DIVIDENDS
Following the completion of the acquisition of Beihai BPG, the
Board acknowledges that the Group is now subject to less
seasonality of its revenue and cashflows. In view of this change,
the Board recommends the payment of an interim dividend of RMB0.02
per sharefor the six months ended 31 December 2010. This is the
first interim dividend declared by the Group since it became a
public listed company in 2005.
The Company has decided to institute a Scrip Dividend Scheme
whereby shareholders can elect to receive the dividends for the six
months ended 31 December 2010 in the form of shares. A document
providing further details of this Scrip Dividend Scheme will be
sent to shareholders in due course. The interim dividend will be
paid in sterling or HK Dollar on or before 3 May 2011, to
shareholders whose names appear on the register on 11 March 2011,
with an ex-dividend date of 10 March 2011 and 9 March 2011 on The
Stock Exchange of Hong Kong Limited and London Stock Exchange PLC
respectively. The actual translation rate for the purpose of
dividend payment in sterling or HK Dollar will be referenced to the
exchange rate on 11 March 2011.
In order to qualify for receiving the interim dividend,
shareholders registered on the Hong Kong branch register of the
Company are reminded to ensure that all transfers of shares,
accompanied by the relevant share certificates and transfer forms,
must be lodged with the Company's branch share registrar in Hong
Kong, Computershare Hong Kong Investor Services Limited, at Shops
1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong for registration not later than 4:30p.m. on 11
March 2011.
Purchase, Sale and Redemption of the Company's Listed
Securities
Neither the Company nor any of its subsidiaries had purchased,
sold or redeemed any of the Company's listed securities during the
six months ended 31 December 2010, except for the issue of
14,479,000 ordinary shares under the Share Option Scheme, the issue
of 7,053,638 ordinary shares to shareholders participating in the
scrip dividend scheme and the placing of 175,000,000 ordinary
shares to investors in December 2010 as set out below:
Fund Raising Activity
For the purpose of strengthening the shareholder base and
capital base for further expansion and growth, the Group completed
the following fund raising activity during the period under review.
The Company issued 175,000,000 ordinary shares to eight placees who
and whose ultimate beneficial owners are independent third parties
under a placing agreement with net proceeds of approximately
HK$1,510 million which is intended to be used for (i) paying the
cash consideration of HK$780 million in relation to the acquisition
of the entire issued share capital of BPG Food & Beverage
Holdings Ltd.; (ii) financing the expansion of the production
capacity of BPG Food & Beverage Holdings Ltd.; and (iii)
financing the corresponding additional working capital requirement
for BPG Food & Beverage Holdings Ltd. due to the expansion of
its production capacity, further details of which are stated in the
Company's circular dated 3 December 2010.
Code on Corporate Governance Practices
The Directors, where practicable for an organisation of the
Group's size and nature, sought to comply with the UK Combined
Code. The Combined Code is the key source of corporate governance
recommendations for UK listed companies. It consists of principles
of good governance covering the following areas:-
1. Directors;
2. Directors' Remuneration;
3. Accountability and Audit;
4. Relations with Shareholders; and
5. Institutional Investors.
In connection with the listing of the Company on the HKEx in
November 2009, the Company adopted the code provisions set out in
the Code on Corporate Governance Practices ("Code") contained in
Appendix 14 to the Hong Kong Listing Rules as its additional code
on corporate governance practices on 17 November 2009. The Company
complied with applicable code provisions in the Code throughout the
six months ended 31 December 2010, with deviation(s) listed
below:
- Code Provision A.2.1.
The roles of Chairman and Chief Executive Officer are performed
by the same individual, Mr. Tong Wang Chow, and are not separated.
The Board meets regularly to consider issues related to corporate
matters affecting operations of the Group. The Board considers the
structure will not impair the balance of power and authority of the
Board and the Company's management and thus, the Board believes
this structure will enable effective planning and implementation of
corporate strategies and decisions.
Compliance with the Model Code for Securities Transactions by
Directors of Listed Issuers
The Company has adopted a code for Directors' dealings
appropriate for a company whose shares are admitted to trading on
AIM and takes all reasonable steps to ensure compliance by the
Directors and any relevant employees. The Company also adopted the
Model Code for Securities Transactions by Directors of Listed
Issuers set out in Appendix 10 to the Hong Kong Listing Rules. The
Directors have confirmed, following a specific enquiry by the
Company, that they have fully complied with the required standard
as set out in the Model Code throughout the period ended 31
December 2010.
REVIEW OF FINANCIAL STATEMENTS
The Audit Committee comprises three independent non-executive
directors. Mr. Ma Chiu Cheung Andrew acts as Chairman of the
committee with Mr. Nicholas Smith and Mr. Yang Zhenhan acting as
members. The arrangement of AuditCommittee is in compliance with
Rule 3.21 of the Hong Kong Listing Rules.
The Audit Committee has reviewed with management the accounting
principles and practices adopted by the Group, and discussed
auditing, internal control and financial reporting matters
including the review of the Company's unaudited financial
statements for the period ended 31 December 2010.
PUBLICATION OF INTERIM REPORT
The interim report will be published on the respective websites
of the Company (www.asian-citrus.com) under the investor relations
section and the HKEx (www.hkex.com.hk).
BY ORDER OF THE BOARD
Asian Citrus Holdings Limited
Tong Wang Chow
Chairman
Hong Kong, 25 February 2011
As at the date of this announcement, the board of directors of
the Company comprises five executive directors, namely Mr. Tong
Wang Chow, Mr. Tong Hung Wai, Tommy, Mr. Cheung Wai Sun, Mr. Pang
Yi and Mr. Sung Chi Keung; two non-executive directors, namely Mr.
Ip Chi Ming and Hon Peregrine Moncreiffe and four independent
non-executive directors, namely Mr. Ma Chiu Cheung, Andrew, Mr.
Nicholas Smith, Mr. Yang Zhenhan and Dr. Lui Ming Wah, SBS JP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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