China Organic Agriculture, Inc. announced their year-end 2009 financial results yesterday. The Company’s Dalian Huiming subsidiary, which was acquired in October 2008, contributed significantly to revenue and operating results.
Financial highlights for 2009 include revenue of $143.9 million, representing a 27.7 percent increase from $112.7 million in 2008. Gross profit for 2009 was $37.1 million, an increase of 46.1 percent compared to $25.4 million in 2008. This reflects an increase in sales and higher prices. The Company’s gross profit margin increased to 25.8 percent in 2009 compared to 22.5 percent in 2008.
China Organic Agriculture, Inc.’s revenue increase reflects their shift in focus to trading “green and healthy” grains in China. This new focus was manifest through the purchase of 60 percent of Dalian Huiming. The rice included in these categories is priced two to three times higher than regular grains. This is the reason the Company experienced an increase in revenues at a greater rate than their increase in volume.
The Company owns 60 percent of their Dalian Huiming subsidiary, and they recorded 40 percent of total net income from Dalian Huiming as income attributed to non-controlling interest. Reflecting Dalian Huiming’s acquisition in the latter part of 2008, non-controlling interest increased from $1.3 million for 2008 to $10.3 million in 2009.
In addition, China Organic Agriculture, Inc. recorded a bad debt provision of $1.9 million in 2009. They also recorded an impairment of $1.5 million pertaining to the Bellisimo Vineyard in 2009. This reflects the reduced real estate valuations in Sonoma County, California.
Net income attributable to the Company’s shareholders was $10.9 million for 2009. This represents a 38 percent 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 China Organic Agriculture, Inc. reflects $2.9 million of after-tax-costs as concerns the aforementioned bad debt provision and the impairment reserve.
China Organic Agriculture, Inc. is in the business of acquiring, trading, and distributing agricultural products. Based in China, the Company primarily engages in green and organic rice processing and distribution, food provision, mountain specialty trading, production and marketing of ice wine and red wine. They distribute their products throughout China to serve the fast growing demand for healthy food.
For more information on the company, please visit: www.chinaorganicagriculture.com