China Organic Agriculture, Inc. Second Quarter 2009 Financials
Net income allocable to CNOA shareholders for the first six months of 2009 was $6.4 million, compared to a net income of $0.9 million for the same period last year.
19 Aug 2009 China Organic Agriculture, Inc., a global diversified food products company engaged in the trading and distribution of agricultural products headquartered in the Liaoning province in China, announced its financial results for the three and six months ended June 30, 2009.
Financial Highlights of the Second Quarter
-- Sales revenue was $30.0 million, a year-over-year increase of over 800%.
-- Gross profit was $6.9 million, a year-over-year increase of 650%.
-- Net income allocable to CNOA shareholders was $2.5 million, or $0.03 per diluted share, compared to a net loss of $121,000 recorded in the second quarter of 2008.
-- Cash on hand totaled $9.0 million as of June 30, 2009.
-- Selling, general and administrative expense decreased 16% compared to a year ago.
Revenue for the second quarter 2009 reached $30.0 million, a substantial increase compared to $3.3 million for the same period last year. The increase in sales was attributable to the sales volume of Dalian Huiming, in which the Company acquired a 60% ownership interest in October, 2008 for a purchase price of $10.6 million. Dalian Huiming is mainly involved in trading and distribution of agriculture products, primarily rice and soybeans throughout China.
Net income allocable to CNOA shareholders was $2.5 million for the second quarter of 2009, compared to a net loss of $121,000 for the same period last year. A former operating subsidiary of the Company, Ermapao, was sold in the second half of 2008 and thus its results are now classified as a discontinued operation in the attached schedules. As the Company owns 60% of Dalian Huiming, 40% of the total net income from Dalian Huiming was recorded as income attributed to noncontrolling interest. The Company's net income significantly in the second quarter benefited from the second quarter's gross profit, which was $6.9 million as compared to last year's gross profit of $0.9 million. The selling, general and administrative expenses for the 2nd quarter were lower than the prior year period's level due to reduced professional fees and other cost control measures.
Financial Highlights for the First Half
The Company's revenues for the first six months of 2009 were $66.7 million, up nearly 800% from revenues of $7.5 million recorded during the first six months of 2008. The gross profit for the first six months was $15.3 million, up from $1.8 million recorded in the prior year's comparable period. Net income allocable to CNOA shareholders for the first six months of 2009 was $6.4 million, compared to a net income of $0.9 million for the same period last year. Net income for the first half of 2008 included net income of $0.8 million from discontinued operations.
Financial Conditions
At June 30, 2009, cash and cash equivalents of the Company were $9.0 million, current assets totaled $110.6 million and current liabilities were $58.6 million, resulting in working capital level of $52 million, and a current ratio of 189%.
During the six months ended June 30, 2009, the Company had negative cash flow from operating activities of $9.2 million, primarily attributable to the increase in accounts receivable which was largely due to increased revenue levels. The Company also recorded investments of $37 million in restricted cash and $47.9 million of cash flows from financing activities.
Business Developments
On September 30, 2008, the Company sold all of the shares of its subsidiary, Jilin Songyuan City ErMaPao Green Rice Limited to Bothven Investments Limited for a non-interest bearing note receivable from Bothven at the amount of $8,700,000.
In October 2008, the Company acquired 60% of the outstanding shares of Dalian Huiming Industry Ltd. ("Dalian Huiming") for a payment equivalent to $10,642,609.
