News and Press Releases

Sino Agro Food, Inc. Reports First Quarter Financial Results for 2010

May 13, 2010

GUANGZHOU, China--()--Sino Agro Food, Inc. (Pink Sheet:SIAF), an emerging integrated, diversified agriculture technology and organic food company with subsidiaries operating in China, is pleased to report its first quarter financial results for 2010.

Results of Operations

Results of Operations for the Years Ended March 31, 2010 compared to March 31, 2009

Assets. Our total assets were $82,954,021 as of March 31, 2010 compared to $73,499,070 as of March 31, 2009. This increase of assets from March 31, 2009 to March 31, 2010 was primarily a result of a growth in net earnings and an increase in Shareholders’ additional capital.

Liabilities. Our total liabilities were $12,105,877 as of March 31, 2010 compared to $12,634,194 as of March 31, 2009. This decrease was primarily due to the improvement of the Company’s cash flows during the period reported.

Total Stockholders’ Equity. Our stockholders’ equity was $70,848,144, as of March 31, 2010 compared to $60,864,876, as of March 31, 2009. This increase in equity was primarily a result of growth in net earnings and an increase in Shareholders’ additional capital.

Gross Profits. For the three months ended March 31, 2010, we had a gross profit of $2,314,716 and Operating Profit of $1,869,346 compared to a gross profit of $2,291,109 and an Operating Profit of $1,416,025 for the three months ended March 31, 2009. This increase was due to increase on productivities, higher sales margins/profits, direct production costs and general expenses being reduced to an efficient level due to more crops being grown and harvested internally instead of having to buy and sources raw materials from externally sources, also as the maturity of our HU Plantations and our cows reaching better yield cycles that also help to increase productivity while their basic cost of upkeep would increase only marginally at a rate much lower the rate of growth. Managements of the Company is expecting this trend to be sustained for the coming years.

Net Income. Our net income from operation was $1,453,139, or $0.03 per share and $1,119,008, or $0.02 per share for the three months ended March 31, 2010 and 2009, respectively. This increase from 2009 to 2010 was due to an increased profit margin during the three months ended March 31, 2010 compared to the three months ended March 31, 2009.

Interest expense was $117,345 and $117,364 for the three months ended March 31, 2010 and 2009, respectively, there was minimal increase due to better cash-flow, keeping debt facilities from 2009 to 2010 at its minimal.

Mr. Lee Solomon, Sino Agro Food, Inc. CEO, stated, “First quarter is historically our slowest due to the winter seasons. Our results for first quarter are in line with our previous guidance of $.0.29 per share for 2010 based on organic growth without funding. For second quarter we will maintain previous guidance, however data expected to come in from both our HU Plantations, Feed Stock and Fertilizer operations in second quarter should result in increased guidance for the remainder of the year.”

 
Consolidated Balance Sheets (unaudited)
 
  1Q 2009   1Q 2010
ASSETS
Current Assets
Cash and cash equivalents 955,405 3,170,811
Trade Receivable 11,976,436 12,177,446
Prepaid Expenses 9,955,022 11,515,493
Other Receivables 185,276 92,700
Inventories 3,496,894 4,657,248
Other current assets 20
Total Current Assets 26,569,054 31,613,697
 
Non-Current Assets
Fixed assets 2,925,687 5,163,706
Construction in progress 4,596,749 5,908,336
Bearer biological assets 5,673,503 5,399,247
Incorporation expenses 18,088 18,088
Intangible assets 21,715,989 22,224,376
Development expenditures 626,570
Goodwill 12,000,000 12,000,000
Other non-current assets 1 1
Total Non-Current Assets 46,930,017 51,340,324
   
Total Assets 73,499,071 82,954,021
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current Liabilities
Short term borrowing 2,430,454 2,430,534
Trade payable 1,264,310 4,287,131
Wages payable 110,968 136,070
Taxes payable 4,669 4,906
Other payable 4,431,408 854,850
Total current liabilities 8,241,808 7,713,491
 
Non-current liabilities
Long term borrowing 4,392,387 4,392,387
Total non-current liabilities 4,392,387 4,392,387
Total liabilities 12,634,194 12,105,878
Net Assets 60,864,876 70,848,144
 
Stockholders’ Equity
Share capital 52,944 52,944
Additional paid-in capital 43,489,213 43,489,213
Capital Reserve (2,897,537) (2,580,305)
Retained earnings 12,002,041 16,748,525
Accumulative other comprehensive income 583,796 2,099,888
Minority interest 7,634,419 11,037,879
Total Equity 60,864,876 70,848,144
   
Total Liabilities and Stockholders’ Equity 73,499,071 82,954,021
 
 

Consolidated Statements of Operations and Comprehensive Income (unaudited)

 
1Q 2009 1Q 2010
Net Sales 4,036,053 4,087,683
 
Cost of Sales 1,744,944 1,772,968
 
Gross Profit 2,291,109 2,314,715
 
Operating Expenses
General and administrative expenses 755,047 325,220
Business tax and surcharges 2,673 2,806
Financial expenses 117,364 117,345
Total Expenses 875,084 445,371
Operating Profit 1,416,025 1,869,344
Total Profit
Minority interest 297,017 416,206
 
Net Income 1,119,008 1,453,138
Net income per common share
Diluted EPS 0.02 0.03
Weighted average number of shares issued 52,834,016 53,241,016
 
 

Consolidated Statements of Cash Flows (unaudited)

 
1Q 2010
Opening Cash Balance at 12/31/2009 1,670,203
Cash Flows from Operating Activities
Net income 1,453,139
Minority interest 1,293,613
Long term debt proceed (1,681,687)
Short term debt proceed (3,724,352)
Depreciation and amortization 110
Additional paid in capital 1,409,921
Changes in operating assets and liabilities
Increase / (Decrease) of Trade Payable 2,251,196
Increase / (Decrease) of other payable (89,559)
Increase / (Decrease) of other current liabilities (1,043,079)
Total Inflow 1,539,505
Increases / (Decreases) in investments assets of the period
Property Plants and Equipment (Net of depreciation) (1,025,889)
Proceeds from investments by shareholders (37,745)
Intangible assets(in land usage right) (Net of amortization) 3,305,673
Other noncurrent assets (including Biological assets) 549,247
Construction in progress 1,033,027
Other Non-current assets (investments) (3,953)
Development Expenditures (535,805)
Increases / (Decreases) in operating assets of the period
Inventories 44,522
Trade receivables (2,842,229)
Other receivables (4,005,100)
Other current assets (Deposit and prepayments) 1,886,945
Total Outflow (1,631,307)
 
Net Cash Balance at end of period 3,170,812
 
 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

Stock
Statement
Equity

   

Common
Shares

   

Common
Stock

   

Additional
Paid-in
Capital

   

Capital
Reserve

   

Retained
Earnings

   

Accumulative
other
Comprehensive
Income

   

Total

 
Balance as at 31st December 2007 52,943,579 52,944 43,489,213 - 3,174,089 398,520 47,114,766
Balance as at 31st December 2008 52,843,016 52,944 43,489,213 (2,897,537) 12,002,041 583,796 53,177,513
Balance as at 31st December 2009 53,241,016 52,944 43,489,213 1,039,307 10,265,853 2,099,888 56,947,205
Balance as at 31st March 2010 53,241,016 52,944 43,489,213 (2,580,305) 16,748,525 2,099,888 59,810,265
 

ABOUT SINO AGRO FOOD, INC.

Sino Agro Food, Inc. (“SIAF”) (http://www.sinoagrofood.com) is an integrated, diversified agricultural technology and organic food company focused on developing, producing and distributing agricultural products in the Peoples Republic of China. The Company intends to focus on meeting the increasing demand of China’s rising middle class for gourmet and high-quality food items. Current lines of business include the manufacture and distribution of Bio-Organic Fertilizer and Stock-Feed, as well as, fisheries, dairies, and Hylocereus Undatus plantations. SIAF’s products are produced to meet the high organic quality standards of the United Kingdom. SIAF is owner of a patented process; the conversion of corn stalk into high quality feed for livestock and is the “Master Licensee” for China with exclusive right to a patented Bacterial used in converting food based agriculture produce wastes into nutritional feed products that are also applicable in the manufacturing of Bio-Organic fertilizer. The Company also holds the “Master License” for China on a modern re-circulating Aquaculture Technology “A Power RAS Technology” that has the capacity to commercially grow quality table fish and seafood free from chemical and pollution in enclosed modules on land in a system designed to promote economic sustainability and viability. Currently the Company has total employment of 520 persons of which 60 are skilled and experienced management staff.

FORWARD LOOKING STATEMENTS

This release contains certain “forward-looking statements” relating to the business of SIAF and its subsidiary companies, which can be identified by the use of forward-looking terminology such as “believes, expects” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. These forward-looking statements are based on SIAF’s current expectations and beliefs concerning future developments and their potential effects on SIAF. There can be no assurance that future developments affecting SIAF will be those anticipated by SIAF. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. SIAF undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Contacts

Sino Agro Food, Inc.
CEO Mr. Solomon Lee, 86-20-22057860
info@siafchina.com
or
Investor Relations (US and Europe)
Mr. Chad Sykes
Chad.Sykes@sinoagrofood.com