May 12, 2009

AgFeed Q1 profit up 232 percent


AgFeed Industries Inc., a commercial hog producer and animal nutrients company in China, announced its first quarter earnings increased 232 percent to US$3.02 million.


That was in comparison to the first quarter of 2008 when the company earned a net income of US$0.91 million.


Revenue during the quarter increased to US$33.43 million, up from US$12.15 million in the same period last year.


AgFeed also earned a gross profit of US$5.8 million.


Results are positive despite of tough market conditions, but year-to-year margins suffered due to external inventory hangover, a mild macro decline in the economy and the higher cost of corn and soy which forced production costs to rise, said Chairman Li Songyan.


The recent AH1N1 flu also affected the businesses but the Chinese government has taken aggressive measures to curtail this problem in China, Li said, adding that hog prices will continue at low levels until late summer and prices will begin to climb by September as the Chinese economy accelerates.

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