Tianli Agritech, a producer of breeder and market hogs, and retailer of pork products, headquartered in Wuhan City, China, reported a 32% revenue increase for the first quarter of 2012.
Sales for the first quarter of 2012 increased 32% to US$7.8 million, with breeder hog sales declining 17% and market hog sales increasing by 34%.
The company sold 27,095 hogs in total, compared to 23,020 hogs in the comparable period in 2011. Market pricing for both retail and breeder hogs year over year was relatively flat. In addition to the increase in our sales as a result of the overall growth in hog sales, sales also increased as a result of the inclusion of our retail sales which began in the third quarter of 2011 and constituted 14% of our revenue in the first quarter of 2012.
Breeder pig revenues in the three months ended March 31, 2012 fell 17%. The decline in breeder hog sales is attributed to higher feed costs which caused farmers to forego purchases of breeders. The Company sold 6,766 breeder hogs in the first quarter of 2012, down 14% from the same period last year. Conversely, sales of market hogs were up approximately 34% over the prior year due to higher volume and increased demand for retail pork products.
Tianli also recorded $1.1 million of revenues from its retail business which began in the third quarter of 2011. The cooperative arrangement with An Puluo is currently distributing pork products under the Tianli-An Puluo brand in over 50 major retail outlets in Great Wuhan, including Wal-mart, Zon 100 and RT Mart.
Gross profit was $1.7 million in the first quarter of 2012, a 29% decrease from the same period last year.
Tianli's chairwoman and CEO, Ms Hanying Li, stated, "We continue to see strong demand across each of our businesses. In the first quarter of 2012 we sold 34% more market hogs while our breeder hog sales were negatively impacted by a weak market and the contamination that occurred in December 2011, which resulted in a loss of approximately 500 breeder hogs. I am extremely pleased with the progress of our black hog program, which will become a big contributor to our sales later this year. We anticipate further growth by expanding the number of farms that participate in our program with local cooperatives to raise Enshi black hogs."
• Tianli Agritech