Beijing, China
September 11, 2014
Agria Corporation (NYSE: GRO) (the "Company" or "Agria"), a global agricultural company, today announced its financial results for the fiscal year ended June 30, 2014.
Financial Highlights for the fiscal year ended June 30, 2014:
♦ Consolidated revenue was $1.0 billion for the fiscal year ended June 30, 2014, a 9% increase from $940.2 million for the fiscal year ended June 30, 2013. All business segments contributed to revenue growth, with strong performance in the Crop Protection, Nutrients and Merchandise segment and the Rural Services segment.
♦ Operating profit was $34.7 million, representing an increase of 62% from $21.4 million in fiscal 2013. Operating profit growth was mainly driven by increased gross profit.
♦ Net profit was $26.1 million, compared to net loss of $199.4 million in fiscal 2013. The turnaround was primarily due to the absence of material impairment charges in 2014, as compared to the one-time goodwill impairment charge of $140.8 million and the provision for impairment of land use rights and non-current prepayments of $57.0 million made in 2013.
♦ Net profit attributable to shareholders was $5.9 million, compared to net loss attributable to shareholders of $137.2 million in fiscal 2013.
♦ As of June 30, 2014, cash and cash equivalents were $14.0 million. Total debt was $118.0 million, representing a decrease of 30% since June 30, 2013.
Mr. Alan Lai, Agria's Executive Chairman, commented, “We continue to pursue our vision of establishing Agria as a major global agricultural leader. Our leadership positions in key product categories in Asia-Pacific and South America are the foundation for future growth, as we continue to focus on our global integration and strategies. Our improved results this year indicate the strength of this foundation. Solid revenue growth and improved profitability are signals that our products meet the needs of farmers and ranchers within our current footprint. We are confident that we can realize global synergies as we expand into new growing regions around the world.”
Mr. Lai continued, “During the year we re-organized the business to focus on key product categories that we intend to offer globally over time. Each segment demonstrated revenue growth and greatly improved operating profit. Within each segment, we grew by focusing on better meeting customer needs, developing new value-added technologies, and nurturing a passionate and technically sound team with global vision and execution capabilities. These timeless business values define Agria and will be the basis of our success for years to come.”
Business Highlights
The Company experienced growth across all business segments during the fiscal year ended June 30, 2014. Seed and Grain revenue grew 3% with operating profit up 22%. Crop Protection, Nutrients and Merchandise revenue grew 14% with operating profit up 22%. Rural Services revenue grew 12% with operating profit up 34%.
The following table summarizes the results of business segments for the fiscal year ended June 30, 2014.
|
|
Revenue
|
|
|
Operating Profit
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
US$’000
|
|
US$’000
|
|
|
US$’000
|
|
|
US$’000
|
|
Seed & Grain
|
384,930
|
|
375,096
|
|
|
23,523
|
|
|
19,226
|
|
Crop Protection, Nutrients & Merchandise
|
406,327
|
|
357,315
|
|
|
23,185
|
|
|
18,977
|
|
Rural Services
|
232,314
|
|
207,783
|
|
|
21,794
|
|
|
16,243
|
|
Corporate
|
-
|
|
-
|
|
|
(33,850)
|
|
|
(33,069)
|
|
Total
|
1,023,571
|
|
940,194
|
|
|
34,652
|
|
|
21,377
|
Seed and Grain
Seed and Grain generated revenue of $384.9 million and operating profit of $23.5 million in fiscal year 2014, representing year-over-year increases of 3% and 22% respectively. This segment contributed 37% to consolidated revenue. Revenue growth was driven by a 27% increase in grain sales and a 17% increase in revenue from seeds in New Zealand. Favorable trading conditions in New Zealand resulted in a greater volume sold of proprietary grasses, maize, and CleancropTM Brassica system. In Australia, a higher volume of proprietary products was sold. The higher volumes combined with revised discounts and rebate programs resulted in greater overall profitability.
Crop Protection, Nutrients, and Merchandise
Crop Protection, Nutrients and Merchandise generated revenue of $406.3 million and operating profit of $23.2 million, representing year-over-year increases of 14% and 22% respectively. This segment contributed 40% to consolidated revenue. Improved performance resulted from initiatives to develop better technical expertise and customer service skills within the sales force, combined with enhancements to logistics systems.
Strong sales growth also reflected higher confidence in the dairy sector, increased investment by farmers in fruit production, and market share growth in key value-added categories related to agronomy inputs, in particular agricultural chemicals and fertilizers.
Rural Services
Rural services generated revenue of $232.3 million and operating profit of $21.8 million, representing year-over-year increases of 12% and 34% respectively. This segment contributed 23% to consolidated revenue.
Due to the completion of the Vietnam export contract last year, Livestock revenue decreased by 20% to $63.8 million. Despite a decline in the volume of sheep sold, average unit price increased from the previous year. The Company increased its dairy market share, a result of ongoing efforts to improve the quality and capacity of the livestock representative force. Finally, cattle and dairy prices on average were higher than the previous year, and remained firm throughout the year. This mix of impacts netted out to increased Livestock operating profit.
Other sectors in Rural Services with notable revenue growth include Irrigation and Pumping (up 44%), Wool (up 31%), and Real Estate (up 27%).
Irrigation and Pumping operating profit grew by 34%. The Company expanded its presence across all of New Zealand via the acquisition of a complementary irrigation and pumping business. Results were also enhanced by strong demand created by wind damage experienced by many clients in New Zealand’s Canterbury region.
Real Estate experienced an exceptionally good year with operating profit up 187%, due mainly to successful transactions for a number of large farms and a farm portfolio. Activity was driven by strength in the dairy sector. Agria’s agent force expanded during the year, and demonstrated better productivity due to improved knowledge and experience.
Higher revenue from Wool was driven by strong growth in export sales and higher wool price.
New Reporting Conventions Reflect Global Operations
With this report, Agria Corporation changed the presentation currency of its consolidated financial statements from Chinese Renminbi (“RMB”) to the U.S. dollar. The Company believes that the U.S. dollar is more appropriate than the Chinese RMB for presenting its performance and financial position, due to the global nature of its operations, the worldwide recognition of the U.S. dollar, and the greater ease in making direct comparisons with industry peers and other US-listed companies. Agria has evolved from a China-based company into a group with global reach. The Company has a presence in various countries including New Zealand, Australia, Uruguay, Brazil and Argentina, as well as exposure to customers in 47 countries across every continent through its international trading and seed multiplication businesses.
The consolidated financial statements of the Company for the fiscal years ended June 30, 2013 and 2014 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
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