Yanglin Soy posts lower Q1 net income

Yanglin Soy Inc, a processor of soy products in China, has reported a net income of US$3.97 million, or US$0.13 per diluted share, for the first quarter ended March 31, 2010, compared to US$24.86 million, or US$0.63 per diluted share, for the first quarter ended March 31, 2009.

Net sales for the first quarter of fiscal 2010 were US$34.08 million, compared to US$43.03 million for the first quarter of fiscal 2009.

Yanglin Soy CEO Shulin Liu said that during 2009, the company experienced certain difficulties caused by the unfavourable pricing environment for both raw materials and end products, as a result of the combined effect of the Chinese government's strategic reserve purchase of domestic soy and large imports of soy into China at lower prices.

However, in the first quarter of 2010, the company generated slight gross profit, as a result of the improvement in the prices of products.

In addition, US$3.2 million of cash from operations was generated for the three months ended March 31, 2010 compared to using US$956,000 of cash for the comparable quarter 2009. The cash generated in the first quarter of 2010 was primarily a result of reducing the purchase of inventory.