Tianli Posts Increased Revenue in Q2 of 201315 August 2013
CHINA - Chinese pig meat company, Tianli Agritech, increased its revenue in the second quarter of teh year by seven per cent.
Mrs Hanying Li, Chairwoman and CEO of Tianli Agritech said: "Despite continued weakness in overall pork demand and a decline in pork prices, our revenue increased by seven per cent to $6.8 million in the second quarter of 2013 as the number of hogs we sold grew by 30 per cent to a record level of 36,464 hogs which more than offset the 18 per cent decline in average selling price per hog.
"We also resumed our retail operations and started to sell our Tianli-Xiduhei hog meat cuts through leading supermarket chains in the Wuhan market during the second quarter.
"Looking ahead, as we continue to focus on expanding our black hog program in Enshi prefecture and building out our retail operations, we believe Tianli is well positioned for a rebound of the hog industry in coming quarters."
Revenue for the second quarter of 2013 increased by $0.45 million, or seven per cent, to $6.84 million from $6.39 million for the same period of 2012. This increase was primarily the result of selling more breeder hogs and market hogs, partially offset by declines in the average selling prices for both breeder and market hogs.
The company sold a total of 36,464 breeder hogs, market hogs, and market hogs for processed pork products during the second quarter of 2013, compared to 28,034 hogs for the same period of 2012.
Revenue for the second quarter of 2013 from breeder hog sales decreased 7 per cent to $1.96 million with the number of breeder hogs sold increasing 12 per cent to 7,718 hogs and the average selling price of breeder hogs decreasing 18 per cent to $253 per hog.
Revenue for the second quarter of 2013 from market hog sales increased 13 per cent to $4.84 million as the number of market hogs sold grew 35 per cent to 28,531 hogs and the average selling price of market hogs declined 16 per cent to $169 per hog.
The decline in average selling prices of both breeder and market hogs was mainly due to market conditions.
During the second quarter of 2013, the Company also generated $0.05 million in revenue from retail operations that were resumed in April 2013.
The company sold 3,988 black hogs, generating $0.81 million in sales, during the second quarter of 2013.
Gross profit (loss) for the second quarter of 2013 was ($0.28) million, compared to gross income of $0.80 million for the same period of last year. Gross margin (deficit) was (4.0 per cent) and 12.5 per cent for the second quarter of 2013 and 2012, respectively.
The combination of increased feed costs and lower hog selling prices contributed to the decrease in gross margin.
The gross margins (deficit) for breeder hogs and market hogs were 24 per cent and (15 per cent), respectively, for the second quarter of 2013, versus 34 per cent and 2 per cent, respectively, for the same period of last year.
Selling, general and administrative expenses increased by $0.28 million, or 67 per cent, to $0.71 million for the second quarter of 2013.
The increase was primarily related to Tianli's black hog program that generated an additional $0.24 million in administrative expenses. Operating margin (deficit) for the second quarter of 2013 was (14.4 per cent), compared to 5.9 per cent for the same period of last year.
Net loss from continuing operations for the second quarter of 2013 was $1.14 million, compared to net income of $0.27 million for the same period of 2012. The decrease was primarily the result of the deterioration in gross margin and the increase in selling, general and administrative expenses as explained above.
After allocating net loss attributable to non-controlling interest, net loss attributable to common shareholders for the second quarter of 2013 was $1.00 million, or a loss of $0.09 per diluted share.
This compared to net income attributable to common shareholders of $0.32 million, or $0.03 per diluted share, for the same period of last year.
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