AgFeed strong despite pig market conditions
AgFeed Industries one of the China's largest commercial hog producers and the largest animal nutrients company has announced financial results for the first quarter of 2009.
→ Earnings per share of $0.08 compared to $0.03 for the first quarter of 2008.
→ Net Income of $3.02 million compared to $0.91 million for the comparable 2008 period.
→ Revenue of $33.43 million, up from $12.15 million in the first quarter of 2008.
→ Gross Profit of $5.80 million.
Dr. Songyan Li, AgFeed's Chairman, commented that, "We are pleased with the results of operations for the first quarter of 2009 in spite of tough market conditions. Our year to year margins suffered due to external inventory hangover, a mild macro decline in the economy and the higher cost of corn and soy which forced our production costs to rise.
The recent H1N1 flu had some effect on our businesses but the Chinese government has taken aggressive measures to curtail this problem in China. Hog prices will continue at low levels until late summer and I believe prices will begin to climb by September as the Chinese economy accelerates."
Junhong Xiong, CEO commented, "China's adoption of the Food Safety Law which goes into effect on June 1,2009 will enhance our animal nutrient business by removing competing substandard products from our market. As a feed operating company we have received 'Green Certification' for our 'BEST' label pre-mix products from the Minister of Agriculture. This combination of the new law and green certification should propel our sales in 2009 and beyond."
Increasing sow birth rates
Gerry Daignault COO added, "We have made great headway in the last few months investing in AgFeed's science-based genetics programs and standardising production practices. These plans will result in increasing the sow birth rates over the next two years (2010-11) to be in position to sell 2,000,000 hogs in that period while also improving other key production metrics.
AgFeed is in the final stages of completing the construction of the nucleus farm near Wuning China and will stock the farm with pure lines in the third quarter. This farm will be at the top of our genetics pyramid and will support our future genetics programs. Hypor, our genetics partner, has provided us with a great deal of support in planning this farm, including design, stocking plans as well as maximising the benefits across our production system."
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