CHINA: Agricultural technology company Sino Agro Food, Inc. (SIAF) reported a 48.5 percent decline in revenue from the sale of goods, to USD 45.4 million for the quarter ended September 30, year over year.
The company stressed its results reflect the discontinuity of the aquaculture operations announced on March 2 this year.
“Our year over year results continued to reflect the impact of increased competition from imported beef on the local beef raising industry, as well as the marked decrease in aquaculture sales that are no longer conducted by the Company, but rather by its investee, Tri-way Industries," pointed out Solomon Lee, SIAF’s CEO.
Comparing the third quarter to the second one this year, the firm’s revenue fell by 16 percent, to USD 15.6 million.
In the beef and fisheries product segment, gross profit declined 35 percent year on year, to USD 1.7 million, on a 33 percent decrease in revenue, stemming from the Company’s decision to trade selective products with reliable profit margins.
In the case of Engineering Technology, Consulting and Services segment, SIAF's managers do not expect the revenue and profit to return to precedent levels until cash flow helping to finance capital expenditures are available to carry out Tri-way’s fishery development and Vigor’s wholesale development.
The firm’s CEO explained that Tri-Way is focused on ramping up its seafood production for domestic sales, and on utilizing its marketing network and global connections to increase sales on imported frozen seafood into China.
“As such, we are confident that the pace of revenue growth will rapidly accelerate once Tri-way secures adequate debt financing. The process to secure this funding has made significant progress, the details of which will be made public once the funding is secured and its closing in place,” he stressed.
The executive commented that they continue to believe that there is a major opportunity to capitalize on the growth of China’s economy as the disposable income of China’s middle class continues to rise, leading to an increasing demand for premium seafood.
In addition, the group will continue to tailor their strategy to leverage this growth, mindful of the shorter term macro trends affecting agriculture in China, while Tri-way continues its efforts to secure financing to accelerate production expansion.
“During the quarter we also continued several initiatives aimed at improving financial discipline across the business to support a sustainable and cost-efficient business model, such as concentrating on increasing free cash flow at Tri-way by optimizing operations at each aquafarm in terms of product mix and APRAS performance, and retrofitting HSA’s second production plant’s fertilizer processor to allow for better cost savings in raw material,” Solomon concluded.