March 1, 2012

Dongling Grain & Oil suffers US$29.84-million loss

Edible oil processor Dongling Grain & Oil Co., Ltd suffered a RMB188 million (US$29.84 million) loss last year, against RMB191 million (US$30.32 million) net revenue in 2010.

The company released its 2011 annual report on February 28, saying that its loss per share came at RMB0.85 (US$0.13) in the period, compared with RMB0.86 (US$0.14) earnings per share (EPS) in the previous year. Therefore, the company will not distribute dividend.

According to the annual report, Dongling Grain & Oil in 2011 reaped RMB6.723 billion (US$1.07 billion) operating revenue, growing by 20.79% from 2010; its operating profit in the period stood at negative RMB191 million (US$30.32 million), compared with RMB1.99 million (US$0.32 million) in the previous year.

The company stated that the major reason for the growth in revenue was that finished product price of soy processing business rose in 2011 from 2010. Meanwhile, the company also saw rising turnover in marine transport service in 2011. The profit decline was mainly caused by the fact that the price rise of raw material (soy) was higher than that for finished products of soy processing business.

Dongling Grain & Oil in the meantime disclosed its plan to develop derivatives transactions in 2012; the transaction categories include futures, option contracts and long-range freight agreements on grain, oil, soy and other finished products. According to market condition and business circumstance, it is expected that the company would use up to RMB130 million (US$20.64 million) every day to carry out derivatives transactions in 2012, with a contract period of one to nine months.