Strong Growth in Feed Boosts AgFeed Results

CHINA - Pig and feed producer, AgFeed Industries, Inc. has announced its first-half results: revenue was up 26 per cent, with particularly strong performance from the feed sector despite the disruption caused by severe flooding.
calendar icon 11 August 2010
clock icon 3 minute read

AgFeed Industries, Inc., one of the largest independent hog production and animal nutrient companies in China, today announced its results for the first half of 2010. Revenue for the first half reached $90.5 million an increase of 26 per cent compared to the first half of 2009. Production volumes increased by 92 per cent in the Company's animal nutrition division, and decreased 15 per cent in its Hog Division as compared to the same period in 2009.

During the second quarter the Company faced an extremely difficult operating environment as a result of a series of severe floods throughout its area of operations. The floods led to significant operating disruptions on the Company's farms and on the transportation infrastructure supporting the operations. The movement of feed and live animals was severely disrupted. These factors led to the loss of over 16,000 live animals in addition to the planned culling of 3,000 sows.

Dr Songyan Li, AgFeed's Chairman commented: "In my life time, I have never experienced flooding and devastation of the magnitude that we faced from late April into early June. We are still in the process of repairing the infrastructure damaged in and around our facilities in Fujian, Jiangxi and Hainan. I have been very proud of our team and the way that they have rallied to answer the challenge faced by our Company and nation.

"The domestic inventory of hogs has changed dramatically and we are already seeing a rapid rise in market prices; we are optimistic about our operating performance for the balance of the year."

Junhong Xiong, AgFeed's President added: "Our investment in our western farm projects in both Dahua and Xinyu continue apace as we simultaneously modernise our legacy farm system, reducing the amount of personnel required on these farms. In spite of the challenges that our customers faced throughout the recent months, we have successfully brought our working capital accounts back in line by reducing our accounts receivable and accounts payable during the second quarter."

Gerry Daignault, AgFeed's COO said: "While AgFeed has supported its customers with extended payment terms from time to time, in light of the industry-wide operating pressures, we limited this practice during the quarter and reduced accounts receivable by over $5.6 million from March 31st. We also reduced our payables by approximately $3.4 million while also continuing our capital investment program to support of expansion in an amount over $3.3 million."

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