SOURCE: Agria Corporation

Agria Corporation

August 21, 2015 06:30 ET

Agria Reports Financial Results for the Fiscal Year Ended June 30, 2015

Operating Profit Up 29% Excluding Foreign Currency Impact

HONG KONG, CHINA--(Marketwired - Aug 21, 2015) - Agria Corporation (NYSE: GRO) (the "Company" or "Agria"), a global agricultural company, today announced its financial results for the fiscal year ended June 30, 2015.

Note: All figures refer to the fiscal year 2015 unless otherwise noted. All comparisons are to the fiscal year 2014 unless otherwise noted.

Financial Highlights:

  • Revenue was $944.7 million, a decrease of 7.7%. Excluding changes in foreign currency exchange rates, revenue decreased 1.1% to $1.0 billion. Revenue decreased 16% in Seed and Grain, 5% in Crop Protection, Nutrients and Merchandise, and increased 2% for Rural Services.

  • Operating profit was $41.3 million, an increase of 19.3%. Excluding changes in foreign currency exchange rates, operating profit increased 29% to $44.8 million. Operating profit increased 22% in Seed and Grain, while declining 4% in Crop Protection, Nutrients and Merchandise and 9% in Rural Services. Operating profit growth was driven by gross margin expansion of 130 basis points to 26.6%.

  • Net profit was $14.7 million, a decrease of 43.8%. The decrease in net profit reflects the negative impact of changes in foreign currency exchange rates, a decline in income from non-operating items, increased financing costs, and higher income tax expense. Net profit attributable to shareholders decreased 107.6% to loss of $0.5 million, or loss of $0.004 per share.

Mr. Alan Lai, Agria's Executive Chairman, commented, "We are pleased to announce our fiscal 2015 financial results, as we once again delivered operating profit growth amidst challenging market conditions. We continue to emphasize profitability and operational efficiency over revenue growth as a core strategy for managing our business. Our results this year were impacted by unfavorable changes in the NZD/USD exchange rate. However for fiscal year 2015, our operating profit was up 19% over fiscal 2014, despite an 8% decrease in revenue. This growth was driven by Seed and Grain, for which operating profit increased by an impressive 22% over the prior fiscal year."

Mr. Lai continued, "Meanwhile, our subsidiary PGG Wrightson announced several new partnerships and acquisitions in the second half of the year to help us continue to advance our international footprint and strengthen our position for future growth. Notably, our recently-acquired interest in Agrocentro Uruguay serves as an integral component in our expansion in South America, which is a high potential market for us. We continue to evaluate new opportunities to strategically expand our business, and fuel sustainable and profitable growth for the years to come."

Business Highlights

The following table summarizes the results of business segments for the fiscal years ended June 30, 2015 and 2014.
(In conformity with IFRS as issued by the IASB)

       
    Revenue   Operating Profit  
    2015   2014   2015     2014  
    US$'000   US$'000   US$'000     US$'000  
Seed & Grain   323,547   384,930   28,716     23,523  
Crop Protection, Nutrients & Merchandise   384,706   406,327   21,484     22,484  
Rural Services   236,461   232,314   19,935     21,794  
Corporate   -   -   (28,793 )   (33,149 )
Total   944,714   1,023,571   41,342     34,652  
                     
                     

Seed and Grain
Operating profit of $28.7 million was 41% of the group total before corporate overhead, and was up 22%. Revenue was $323.5 million, which constituted 34% of group revenue, and was down 16%. The Company's focus on more profitable sales in this segment resulted in profit growth despite a decline in sales. Seed sales were strong in New Zealand and Australia, and were driven largely by higher-margin products, such as proprietary herbs and legumes. The Company's strategic shift in product mix contributed to the increase in operating margin, compared to fiscal 2014. However South America experienced extremely wet conditions during fiscal 2015, which reduced demand for both crop seed and agricultural chemicals.

Crop Protection, Nutrients, and Merchandise
Operating profit of $21.5 million was 31% of the group total before corporate overhead, and was down 4%. Revenue was $384.7 million, which constituted 41% of group revenue, and was down 5%. Revenue decline was due to the negative impact of changes in foreign currency exchange rates. Excluding this impact, operating profit increased due to strong performance in retail sales for Rural Supplies, Fruitfed and Agritrade businesses in New Zealand and Australia. Retail sales were down in the second half of the fiscal year, which is the typical seasonal pattern.

Rural Services
Operating profit of $19.9 million was 28% of the group total before corporate overhead, and was down 9%. Revenue was $236.5 million, which constituted 25% of group revenue, and was up 2%. The decrease in operating profit was driven by the Company's Real Estate business due to fewer farm listings coming to market compared to the prior fiscal year, as well as lower activity in dairy herd sales and reduced lamb prices. This was partially offset by high beef prices and strong demand from cattle processors in the Livestock business. Livestock profit grew almost 9%, on revenue growth of 5%. Profit from Other Rural Services was down 25% due to the reduced Real Estate market. Wool profits were largely in line with fiscal 2014.

Conference Call
Agria will discuss its financial results and outlook in a conference call on August 21, 2015 at 8:30 a.m. Eastern Time/8:30 p.m. Beijing time. The call will be hosted by Mr. John Fulton, Chief Financial Officer, and Mr. Kean Seng U, Head of Corporate and Legal Affairs. Investors interested in participating in the live call should dial +1 (719) 325-2435 and enter passcode 5708017. A simultaneous live webcast will be available on the Company's website at www.agriacorp.com. A replay of the call will be available either via telephone or webcast until August 28, 2015. The telephone replay can be accessed by dialing +1 (858) 384-5517 and entering passcode 5708017. The webcast replay can be accessed in the Investor Center on the Company's website.

About Agria Corporation
Agria (NYSE: GRO) is a global agricultural company with three principal business segments: Seed and Grain; Crop Protection, Nutrients and Merchandise; and Rural Services. The Seed and Grain segment is engaged in research and development, production and sale of a broad range of seed products and trading of seed and grain products globally. The Crop Protection, Nutrients and Merchandise segment operates an extensive chain of retail stores that supply farm input materials. The Rural Services segment provides livestock trading, wool trading, irrigation and pumping, real estate agency and other agriservices. For more information about Agria Corporation, please visit www.agriacorp.com.

Safe Harbor Statement:
This announcement contains forward-looking statements. These statements, including the management's commentary, are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Agria may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Agria's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in Agria's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this announcement unless otherwise stated and Agria does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

             
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(UNAUDITED)
 
   
(In conformity with IFRS as issued by the IASB)   For the year ended June 30,  
    2015     2014  
    US$'000     US$'000  
             
Revenue   944,714     1,023,571  
Cost of sales   (693,804 )   (764,995 )
Gross profit   250,910     258,576  
Other income   312     237  
Operating expenses   (209,880 )   (224,161 )
Operating profit   41,342     34,652  
Equity accounted earnings of associates   140     2,094  
Non-operating items   (1,891 )   4,750  
Fair value adjustments   (18 )   1,089  
Profit before interest and tax   39,573     42,585  
Net interest and finance costs   (12,318 )   (9,285 )
Profit before tax   27,255     33,300  
Income tax   (12,567 )   (7,153 )
Profit for the year   14,688     26,147  
             
Attributable to:            
Equity holders of the Company   (451 )   5,896  
Non-controlling interests   15,139     20,251  
    14,688     26,147  
Earnings/(loss) per ordinary share (US$)            
Basic   (0.004 )   0.05  
Diluted   (0.004 )   0.05  
             
No. of ordinary shares outstanding   110,766,600     110,766,600  
             
             
         
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
   
     
(In conformity with IFRS as issued by the IASB)   As at June 30   As at June 30
    2015   2014
    US$'000   US$'000
ASSETS        
Current assets:        
    Cash and cash equivalents   9,886   13,958
    Accounts receivable, prepayments and other current assets   189,938   223,274
    Inventories and biological assets   180,644   217,607
Total current assets   380,468   454,839
         
Non-current assets:        
    Property, plant and equipment, net   88,993   104,603
    Intangible assets   6,899   7,348
    Goodwill   3,299   3,278
    Other non-current assets   10,846   23,314
    Deferred tax asset   8,386   9,658
Total non-current assets   118,423   148,201
Total assets   498,891   603,040
         
LIABILITIES AND EQUITY        
Current liabilities:        
    Short-term bank borrowings and current portion of long-term bank borrowings   54,160   38,864
    Accounts payable, accrued expenses and other liabilities   201,310   226,854
Total current liabilities   255,470   265,718
         
Non-current liabilities:        
    Long-term bank borrowing, net of current portion   60,785   79,142
    Other long-term liabilities   15,118   42,367
Total non-current liabilities   75,903   121,509
Total liabilities   331,373   387,227
         
Equity:        
    Equity of the Company   56,602   75,286
    Non-controlling interests   110,916   140,527
Total equity   167,518   215,813
Total liabilities and equity   498,891   603,040
         
         
         

Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is completed on our year-end financial statements, which could result in significant differences from this unaudited financial information.