September 23, 2008

     

AgFeed acquires 2 hog farms, raising 2008 earnings guidance

   

   

AgFeed Industries, Inc., the largest commercial hog producer and the largest premix feed company in China, announced the acquisition of 2 large commercial hog farms located in South China.

  

AgFeed anticipates these acquisitions to close in October and funded with the company's available cash on hand.

    

The company will have a total of 30 producing commercial hog farms upon completion of these acquisitions.

  

AgFeed raises its 2008 earnings guidance of adjusted earnings per share (EPS) to US$1.10, due to the projected financial performance for the 3rd and 4th quarter of 2008, which would include the completion of these two additional acquisitions. In addition, AgFeed is in discussions with multiple other hog farms as potential acquisition targets. All of AgFeed's acquired hog farms are immediately accretive to earnings.

  

China's domestic corn and soy meal production for 2008 are expected to reach record highs due to a great harvest season. Since corn and soy meal represent the majority of costs in hog production, AgFeed currently benefits from declining feed input costs and expanded profit margins.

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