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You recently wrote:
"That report is a complete joke."
Now you are spreading it to journalists. Well well...
News Release Issued: Aug 14, 2019 (3:15pm CDT)
To view this release online and get more information about Sino Agro Food visit: http://sinoagrofood.investorroom.com/index.php?s=43&item=244
Sino Agro Food, Inc. Reports 2019 Q2 Results
Revenue of USD 38.6 M; EPS of USD 0.13
GUANGZHOU, China-- Sino Agro Food, Inc. (OTCQX: SIAF | OSE: SIAF-ME), a company focused on high protein food including seafood and cattle announces results for the quarter ending June 30, 2019.
Financials
All business segments of Sino Agro Food, Inc. (the “Company” or “SIAF”) recorded gross profits in the second quarter, totaling USD 6.9 M, a 28% increase over Q2 2018 and a 38% increase over Q1 2019. Fully diluted earnings totaled USD 6.6M or USD .13 per share. This includes net income from SIAF’s equity interest in Tri-Way Industries.
Total revenue increased USD 4.7 M, or 14%, to USD 38.6 M for the quarter ended June 3, 2019 when compared to the corresponding 2018 quarter.
Other Key Points
Revenue in the fourth quarter of 2019 was USD 38.6 M, an increase of 14% from Q2 of 2018, and an increase of 32% compared to Q1 of 2019.
Gross profit in the second quarter of 2019 was USD 6.9 M, an increase of 28% from Q2 of 2018, and an increase of 38% compared to Q1 of 2019. All business segments booked positive gross profits in Q2 2019, highlighted by a 300% increase to USD 2.4 M at the Cattle Farm business (MEIJI).
As indicated last quarter, the cattle business at SJAP at SJAP is being de-emphasized or downsized. Also, capital expenditure from Tri-Way, which generates project development revenue, is being deferred because the best use of discretionary funds is working capital to grow Tri-Way’s sale of goods. All other business units are performing to plan.
Income from SIAF’s equity investee, Tri-Way Industries totaled USD 3.6 M, a 42% increase over the previous quarter, Q1 2019, and contributed .07 to SIAF’s earnings per share.
As of August 14, 2019 there were 49,99 M common shares issued and outstanding, unchanged from the previous quarter’s end.
As of June 01 2019, the Company had net working capital of USD 159.2 M, versus USD 175.3 M at end of FY 2018.
Stockholders’ equity increased by USD 1.0 M to USD 631.6 M from the end of FY 2018 to the end of Q2 2019.
Second Quarter Yearly Comparison
(USD M, except per share and margin data)
Q2
2019
Q2
2018
%
Revenue
38.6
34.0
14 %
Gross Profit
6.9
5.4
28 %
Gross Profit Margin
17.8 %
15.9 %
12 %
Earnings Per Diluted Share (FD) (USD)
.13
.02
550%
Second Quarter Sequential Comparison
(USD M, except per share and margin data)
Q2
2019
Q1
2019
%
Revenue
38.6
29.3
32 %
Gross Profit
6.9
5.0
38 %
Gross Profit Margin
17.8 %
17.1 %
4 %
Earnings Per Diluted Share (FD) (USD)
.13
.07
86 %
The following table breaks out revenue by business segment, comparing Q2 2019 to Q2 2018:
Q2 2019
Q2 2018
%
Integrated Cattle Farm (SJAP)
4.2
5.1
(18) %
Organic Fertilizer (HSA)
2.5
2.5
1 %
Cattle Farms (MEIJI)
12.6
6.1
107 %
Plantation (JHST)
1.1
1.0
5 %
Seafood & Meat Trading
17.5
18.2
(4) %
Sale of Goods Total
37.9
32.9
15 %
Project Development Total
.7
1.1
(31) %
Group Total
38.6
34.0
14 %
This table breaks out gross profit by business segment, comparing Q2 2019 to Q2 2018:
Gross Profit (USD M)
Q2 2019
Q2 2018
%
Integrated Cattle Farm (SJAP)
1.2
1.6
(25) %
Organic Fertilizer (HSA)
.9
.9
5 %
Cattle Farms (MEIJI)
2.4
.6
300 %
Plantation (JHST)
.3
.2
72 %
Seafood & Meat Trading
1.9
2.0
(3) %
Sale of Goods Total
6.8
5.3
29 %
Project Development Total
.1
.2
(56) %
Group Total
6.9
5.4
28 %
Integrated Cattle (SJAP)
The Company is deemphasizing its Integrated Cattle Farm business segment (SJAP) until (or if) macroeconomics improve for the beef industry in China, with the goal of maintaining self-sufficiency at smaller size, but without any capital requirements. Live cattle prices did not improve in the quarter. Consequently, sales of live cattle and livestock feed declined versus both Q2 2018 and Q1 2019. However, because some district farmers switched from raising cattle to agricultural alternatives, fertilizer sales increased 39% versus Q2 2018 and 158% versus Q1 2019 to USD 1.3 M.
Overall, SJAP is performed as expected, with gross profits of USD 1.2 M in Q2 2019, versus USD 1.6 M in Q2 2018.
Organic Fertilizer (HSA)
Revenue at HSA increased by USD .24 M, or 1%, from USD 2.49 M in Q2 2018 to USD 2.52 M in Q2 2019. Gross profits increased by USD .48 M or 5% from USD .85M in Q2 2018 to USD .90 Q2 2019. Gross margins were 36%.
As previously reported, HSA benefited from leasing 10 acres of its land.
Cattle Farms (MEIJI)
Revenue for Q2 2019 totaled USD 12.6 M, an increase of USD 6.5 M, or 107% over Q2 2018 (UDS 6.1 M). Gross profit for the 2019 first quarter was USD 2.4 M, an increase of 325% over Q2 2018 and 85% over Q1 2019.
Locally bred Asian Yellow Cattle have continued to see increasing demand and to command steadily increasing prices.
Plantation (JHST)
Revenue at JHST increased by USD .18 M, or 21% from USD .85 M in Q2 2018 to USD 1.03 M in Q2 2019. Gross profits totaled USD .32 M in Q2 2019, an increase of 76% over Q2 2018.
The plantation is slowly recovering from the damages of Typhoon Mangut in late 2018. There was no production of HU flowers during the quarter, but the volume of fresh vegetables increased by 142 metric tons with slightly higher prices. The Company expects further recovery in the seasonally better third and fourth quarters, assuming continued restoration of a healthier underlying growing environment.
Seafood and Meat Trading (Corporate)
Revenue from Seafood and Meat Trading decreased USD .7 M, or 4% from USD 18.42 M in Q1 2019 to USD 17.5 M in Q2 2019. However, revenue increased substantially from the previous quarter that was impacted by transportation disruptions due to Chinese New Year, Gross profits were USD 1.9 M in Q2 2019, representing gross margins of 11%.
Engineering Technology, Consulting and Services -- Project Development (CA)
Revenue from project development totaled USD .73 M in Q2 2019, a decrease of 31 % from Q2 2018. Gross profit decreased to USD 73 K.
Under current conditions, working capital at T-W is better deployed to generate continuing revenue from the sale of goods.
CEO Commentary
Solomon Lee, Chief Executive Officer of Sino Agro Food, commented, “Second quarter results were substantially better than the first quarter, supporting our efforts to ensure a baseline scenario in which all our business sectors are self sufficient and then positioned for gradual organic growth. By limiting capital expenditures, SJAP, JHST, CA and the Corporate business sectors have met our baseline goal. Market conditions for HSA and MEIJI products -- organic mixed fertilizer and Yellow Asian Cattle -- are currently favorable. Consequently, each is slowly demonstrating growth beyond the baseline scenario.
“We do have legacy debt to consider. It stands at 6.6% of our total assets. We are coming out of the worst patches experienced during the past two years. If and when we obtain extra financing to increase working capital, we expect to increase net income and generate additional net cash flow to service legacy debt more expeditiously. In this respect, we continue to conscientiously pursue a large number of initiatives, all involving protracted steps, some of which are showing good progress.”
FY 2019 Q2 Interim Report
For detailed segment operational performance and developments, please take the time to read our latest 10-K filing, or refer to the Q2 2019 Interim Report posted to the Company website: http://sinoagrofood.investorroom.com/download/Sino-Agro-Food_Q2-2019-Interim-Report.pdf
Earnings Information
Like last quarter, the Company will provide a written Q & A on September 2, 2019.
Please submit questions by email to info@sinoagrofood.com. These will be organized, answered, and posted, with an accompanying press release.
About Sino Agro Food, Inc.
SIAF focuses on high protein food including seafood and cattle. The Company produces, distributes, markets, and sells sustainable seafood and beef to the rapidly growing middle class in China. Activities also include production of organic fertilizer and produce. SIAF is a global leader in developing land based recirculating aquaculture systems (“RAS”), and with its partners is the world's largest producer of sustainable RAS prawns.
Founded in 2006 and headquartered in Guangzhou, the Company had over 325 employees and revenue of USD 141.7 million in 2018. Operations are located in Guangdong, Qinghai, and Hunan provinces, and in Shanghai. Sino Agro Food is a public company listed on OTCQX U.S. Premier in the United States and on the Oslo Børs’ Merkur Market in Norway.
News and updates about Sino Agro Food, Inc., including key information, are published on the Company’s website (http://www.sinoagrofood.com), the Company’s Facebook page (https://www.facebook.com/SinoAgroFoodInc), and on twitter @SinoAgroFood.
Forward Looking Statements
This release may contain forward-looking statements relating to the business of SIAF and its subsidiary companies. All statements other than historical facts are forward-looking statements, which can be identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions. These statements involve risks and uncertainties that may cause actual results to differ materially from those anticipated, believed, estimated or expected. These risks and uncertainties are described in detail in our filings with the Securities and Exchange Commission. Forward-looking statements are based on SIAF’s current expectations and beliefs concerning future developments and their potential effects on SIAF. There is no assurance that future developments affecting SIAF will be those anticipated by SIAF. 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 required under applicable securities laws.
Investor Relations
Peter Grossman
+1 (775) 901-0344
info@sinoagrofood.com
Nordic Countries
+46 (0) 760 495 885
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"Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?
Yes ¨ No x"
From Q1 2018:
First quarter gross profits totaled USD 6.1M compared to a loss of USD 7.9M QoQ. Fully diluted earnings per share were USD .17 in the first quarter.
I agree, much more likely.
I still wonder how they always manage to mess up and bring confusion after their pressreleases. I mean, how hard can it be to make it simple?
Looks like the $181,183,609 for the year ended December 31, 2017, is only sale of goods. Otherwise the corresponding number for 2016 doesn't add up. That would give us a sales number of $30.6 M in q4 2017.
jyyoo, I'm still invested and have also been in contact with the company several times this year.
We seems to be in an unfavorable situation with a lot of ongoing selling pressure, but I still believe that the future will be better, with all the possible upcoming triggers. Everyting could change very fast. They should for example give top priority to free up some cash and announce a quarterly dividend ASAP.
Loans with collateral shares attached to them was a big mistake, imo, but with the most investments on hold the cash-flow and some cash management (shape up credit terms and get the Tri-way loan back) should take care of that going forward. Hopefully they will learn a lesson this time. Even though I thought the IronRidge deal back in 2012 was a lesson learned.
I personally think I-Hub has lost it since they tolerate all participants that post outright lies day after day. Because of that I don't post here much. Some of you others are doing a great job trying to get the facts straight, many thanks for that!
New research update from SEB regarding Aquaculture. Could Tri-way be the solution for some of the cash rich giants in Norway to achieve growth in the future?
Well, according to this we still have Euro China Capital around (I guess?) in some way:
I noticed some changes in the list of 5 % or Greater Beneficial Owners. In the 10 K we had:
This is so much more valuable than having a big 4 auditor:
This increase in outstanding shares could be one explanation to the recent selloff, imo. It is information that some market participants could have been aware of.
Even if it is shares issued as collateral, SIAF should inform the market about the loans and the reasons for the increase in shares outstanding. Especially since they have a history of diluting the shareholders like crazy.
If SIAF was listed on a quality exchange the information about outstanding shares should have been mandatory. Much better compared to us guessing/hoping that it is collateral shares...
Totally agree. I am a bit surprised that the SP is not going up after this report. Quite lacklustre EPS but a lot of other positives in the report.
This part from the report is really promising:
Additional Triway-financing of $7.5 million seems to be in place. Must be a done deal if they know the terms and conditions:
In this case the short seller will owe both the Siaf share (that must be bought back at some point before returned to the lender) and the Tri-way dividend share (at the ex date).
If the Tri-way divi share will not be tradable until the ipo, the shorter could be in trouble, imo. The only way to buy back the divi share would be through buying more Siaf-shares. That would hedge the position (similar 18.3 %) but would force you to short cover 2 Siaf shares for every Siaf share that is shorted. Probably a bad deal.
Since both Dan and Solomon said that they get questions regarding the share price everyday they must have done some investigations. I would guess that they know much more than they are telling us in the CC:s.
I think the ex dividend-date is a very clever move if they want to get to the shorts. Having a negative position locked in Tri-way for a year or so could be extremely expensive and unpleasant to say the least.
Well, it is hard to tell who is doing the selling but they don't seem to want to get the highest possible price when they are unloading.
Swedbank should update their estimates or discontinue their coverage of SIAF imo. It gives the bank low credibility to have an EPS estimate of $1.66 for 2017.
SIAF will only own 18,3 % of Tri-way after the ex dividend date so I don't think that strategy will work. Solomon will not have any control of Tri-Way anyway.
Part of the plan from SIAF and Solomon could now be to fence off speculators that have been part of depressing the share price. The trading hasn't been right, with endless supply killing every SP-attempt to move up, imo.
But how could ECAB force Solomon to issue so many shares that his voting rights would go below 50 %?
As far as I can tell they will not dilute more now, except shares as collateral for loans.
I think it is a combination of making the process in getting investors to join the pre-IPO easier, since it will make the alternative of buying SIAF outright less attractive as you are pointing out.
The other thing could be that they want to squeeze all the speculators that are short SIAF, which will contribute to the SP of SIAF.
If you are short SIAF the ex-Tri-way date you will eventually have to cover for the Tri-way-shares as well. That could cause you some real problems since the shares most likely will be non tradable until the IPO. And after the IPO it will most likely be very bad business to cover your Tri-way short position, if the valuation of Tri-way will follow the peers in Hongkong.
As far as I know swedbank has not given any new estimates for 2017 in a very long time. Maybe they will after the cc.
Yes, I agree. It would be appreciated if they could shed some light over this issue at the cc on Friday.
Yes, it looks like we finally got our buyback...
I must admit that I, from the beginning, was expecting full dilution from the ECAB deal. Now it seems like that would not be the case, after a couple of reports with decreased convertible volume outstanding.
This part looks promising:
Are the sellers done for now? Maybe wishful thinking but it felt like a blowout.
This would be the time to halt all non-essential investments so we could have some free cash flow. No more shares being issued, ever, whatever the cause might be.
The management is killing us once again. I mean, they made eps $5 last year and book value is above $26. The SP is close to $3 now... some people should get their act together and wake up!
If the real/market value is zero, the book value should be written down to that level. Accounting 101.
That is not the case for Tri-way. Instead they are aiming for a valuation of 3-4 times NTA in the coming IPO in Hong Kong.
Did you really think that would be cash flow items? You can see the details of the appraisal in the 10K. All signed by Ecovis.
Interesting, thanks!
Have you seen a filing about that? Can't find anything atm. Would be nice to see some big buyers stepping up now.
iolaplt, can you please elaborate how this works? Doesn't sound like a good plan if/when the share price takes off, since what you are telling implies that the SP is artificially pushed down,
Yes, they should inform the market about this in a better way. I would actually like to see a new pressrelease with a clarification, preferably ahead of the trading in Merkur on Monday.
The pre-IPO/IPO would totally change the book value of Tri-way as well. If you exclude the pre-IPO/IPO SIAF has a much larger stake than 36,6%.
They compare apples with oranges here.
Nice to see that institutions are starting to ramp up. Now we have to wait til they cross the 10 % treshold before we see the next filing from them :)
If you don't want to be trashed, stop telling lies all the time...
We just had some selling (24k shares) into the 102k bid at NOK32.
arbitrage
Prices of fish and prawns have skyrocketed by as much as 50 per cent ahead of Chinese New Year, and could go up even more, with Chinese silver pomfret and white-spotted rabbitfish seeing the steepest price hike so far.
http://www.seafoodnews.com/Story/1046492/Fish-Prices-in-Chinese-Markets-Up-as-Much-as-50-percent-Ahead-of-CNY
http://www.seafoodnews.com/Story/1046523/Chinas-White-Shrimp-Production-Down-by-Over-150000-tons-in-2016
All the posters telling outright lies and fabricating rumors should have this in mind:
https://www.sec.gov/oiea/investor-alerts-bulletins/ia_rumors.html