August 16, 2010

Yanglin Soy posts higher revenue in Q2

Yanglin Soy, Inc., one of the leading domestic processors of soy products in China, has announced that total revenue for the second quarter ended June 30, was US$49.9 million, compared to US$39.8 million recorded last year.

The increase in sales during this period was mainly due to the improvements in economic and industrial environments from the exceptionally severe situations caused by global economic crisis in 2009.

The rebound of the economy generated more demand for consumer products, including soy products. Although the sales of soymeal, one of its major products, was negatively affected by the outbreak of foot-and-mouth disease (FMD) among animals, sales volume of products increased materially over the same period of 2009.

However, due to the negative impact of the large and cheap imports of soy and the breakout of the FMD on the prices of soy products, the company generated a gross loss. Gross loss for the second quarter of 2010 was US$2.62 million, as compared to a gross loss of US$4.21 million for the second quarter of 2009.

Total operating expenses for the second quarter of 2010 increased to US$1.22 million, from US$620,184 last year. Selling expenses for the second quarter of 2010 increased to US$67,110, slightly lower than US$60,303 for the second quarter of 2009.

Meanwhile, operating loss for the second quarter of 2010 was US$3.85 million, as compared to a loss of US$4.83 million for the second quarter of 2009. Interest expenses increased to US$298,107 for the second quarter of 2010, from US$94,091.

The change was mainly caused by a material increase in bank borrowings. Yanglin has been recognised as a "Key Leading Enterprise" in the industrial sector of the important agriculture industry by the Chinese government. Shulin Liu, Chief Executive Officer of Yanglin, believes that the Company will continue to benefit from its income tax exempt status from January 2010 until June 2012.

Additionally, net income for the second quarter of 2010, after including the non-cash income from the change in fair value of warrants, totalled US$2.6 million, or US$0.09 per diluted share, compared with net loss of US$2.4 million, after including the non-cash income from the change in fair value of the warrants, or US$0.12 per diluted share for the second quarter of 2009.