China Organic Agriculture records 27.7% increase in year-end '09 revenues
China Organic Agriculture, Inc. (CNOA) has announced revenues for 2009 ended December 31, at US$143.9 million, up 27.7% over US$112.7 million recorded in 2008.
This increase reflects the company's shift in focus, accomplished through the purchase of 60% of Dalian Huiming, to trading "green and healthy" grains in China. The rice included in these categories is priced two to three times higher than regular grains, which explains the increase in revenues at a greater rate than our increase in volume.
Gross profit for 2009 was US$37.1 million, an increase of 46.1% compared to US$25.4 million in 2008, reflecting both the increase in sales and higher prices. Gross profit margin increased to 25.8% in 2009 compared to 22.5% in 2008.
CNOA recorded a bad debt provision of US$1.9 million in 2009 due to the company's conclusion that recovery of a portion of the outstanding receivables from some customers may be difficult. In addition, the company recorded an impairment of US$1.5 million pertaining to the Bellisimo Vineyard in 2009, reflective of the reduced real estate valuations in Sonoma County, California.
40% of total net income from Dalian Huiming was recorded as income attributed to non-controlling interest. Non-controlling interest increased from US$1.3 million for 2008 to US$10.3 million in 2009, reflecting Dalian Huiming's acquisition in the latter part of 2008.
Net income attributable to CNOA shareholders was US$10.9 million for 2009 representing a 38% decrease compared to net income in 2008 of US$15.7 million, excluding US$1.9 million of income in 2008 pertaining to discontinued operations. The decrease in net income attributable to CNOA reflects US$2.9 million of after-tax-costs pertaining to the bad debt provision and the impairment reserve.
Meanwhile, earnings per share decreased to US$0.15 per diluted share compared to US$0.27 per diluted share from continuing operations for 2008. China Organic Agriculture Inc.'s Form 10-K will be filed shortly.
