Sino Agro Food Inc (OTCBB:SIAF) reported revenue of 90.9 million in 2Q2015 compared to revenue of 97 million in the same quarter, a year earlier. The gross profit came at $10.4 million compared to $21.9 million in the three-month period, a year ago. Also, the gross profit from sale of goods declined 18% to $19.8 million in 2Q2015 and gross profit from consulting services dropped 73% to $2.1 million in reported quarter.
The expert view
Solomon Lee, the CEO of Sino Agro, said that 2Q2015 results were dismal, breaking a series of record revenue quarters. There were many factors that affected the performance including impact of bad weather on construction at ZSNP, the limited supply of eel fingerlings, introduction of quotas to restrict live seafood export and the lower prices of live cattle.
The key factors
The CEO further added that as an agricultural firm, revenue depends largely on weather conditions, food and commodity prices, and seasonal factors. Each detracted from 2Q2015 financial performance. Sino Agro is trying to structurally mitigate all these factors by increasing distribution arm, which remains unaffected by these three factors. As a result, there can be improved contributions to the bottom and top lines, starting in 3Q2015. With these improved contributions and with weather conditions getting back to normal in this month, the company expects healthy growth in 2H2015, ramping in 3Q2015.
Bertil Tiusanen, the CFO, said that with so many external elements having an adverse impact on 2Q0215 results, it appears challenging to assess the implications for company’s business going forward. The management views the financial numbers in 2Q as a bump on the road.
In last trading session, the stock price of Sino Agro Food Inc (OTCBB:SIAF) declined more than 6% to close the trading session at $9.90. The decline came at a share volume of 294,052 compared to average monthly share volume of 54,218.