CALISTOGA, Calif. & DALIAN, China--(BUSINESS WIRE)--China Organic Agriculture, Inc. (OTCBB: CNOA - News), a company headquartered in Liaoning Province in China engaged in the trading and distribution of agricultural products, announced today its financial results for the year ended December 31, 2009.
Revenue of $143.9 million represents a 27.7% increase from $112.7 million in 2008. The company’s Dalian Huiming subsidiary, acquired in October 2008, contributed significantly to the revenue and operating results.
Gross profit was $37.1 million, compared to $25.4 million in 2008.
Revenue for 2009 was $143.9 million, representing a 27.7% increase over the $112.7 million of revenue recorded in 2008. This increase reflects the Company’s shift in focus, accomplished through the purchase of 60% of Dalian Huiming, to trading “green and healthy” grains in China. The rice included in these categories is priced two to three times higher than regular grains, which explains the increase in revenues at a greater rate than our increase in volume.
Gross profit for 2009 was $37.1 million, an increase of 46.1% compared to $25.4 million in 2008, reflecting both the increase in sales and higher prices. Gross profit margin increased to 25.8% in 2009 compared to 22.5% in 2008.
The company recorded a bad debt provision of $1.9 million in 2009 due to the company’s conclusion that recovery of a portion of the outstanding receivables from some customers may be difficult. In addition, the company recorded an impairment of $1.5 million pertaining to the Bellisimo Vineyard in 2009, reflective of the reduced real estate valuations in Sonoma County, California.
As the company owns 60% of its Dalian Huiming subsidiary, 40% of total net income from Dalian Huiming was recorded as income attributed to noncontrolling interest. Noncontrolling interest increased from $1.3 million for 2008 to $10.3 million in 2009, reflecting Dalian Huiming’s acquisition in the latter part of 2008.
Net income attributable to CNOA shareholders was $10.9 million for 2009 representing a 38% decrease compared to net income in 2008 of $15.7 million, excluding $1.9 million of income in 2008 pertaining to discontinued operations. The decrease in net income attributable to CNOA reflects $2.9 million of after-tax-costs pertaining to the bad debt provision and the impairment reserve.
Earnings per share decreased to $0.15 per diluted share compared to $0.27 per diluted share from continuing operations for 2008. China Organic Agriculture Inc.’s Form 10-K will be filed shortly.
“We are pleased to deliver these audited results for the 2009 fiscal year,” said Jinsong Li, Chief Executive Officer. “We appreciate your patience during the extension period. I would like to take this opportunity to thank our valued shareholders for their continued support.” Mr. Li continued, “I am happy with the recent acquisition of 60% of the stock of Changbai Eco-Beverage, a blueberry product producer, as announced in March. We believe that this acquisition will provide the Company with significant opportunities as the demand for blueberry based products in China increases with the growing interest in healthy food alternatives. Changbai is well positioned to serve this market and to benefit from this growth and we are optimistic about our opportunities and plans for 2010 and onward.”
Selected consolidated figures are presented below. For full figures, please reference China Organic Agriculture, Inc.’s Form 10-K filing, which will be located on the SEC's EDGAR website.
Looking to the results we see that the last quarter only made $ 0.01 but this was mainly because of the bad debt provision and impairment reserve. Cash per share was $ 0.25 and the book value increased from $ 0.77 to $ 0.78. P/E is still low. I hope the 10-K filing will give us some clearance for the future.
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