Sino Agro Food Inc (OTCBB:SIAF) posted revenue of 90.9 million in the second quarter of 2015 compared to revenue of $97 million in the same period, a year ago. The gross profit declined to $10.4 million in 2Q2015 as against $21.9 million in the comparable quarter in 2014. Also, the gross profit recorded from sale of goods dropped 18% to $19.8 million and gross profit from consulting services plunged 73% to $2.1 million in 2Q2015.
The expert comments
Solomon Lee, the CEO said that 2Q2015 results came below expectations, breaking a volley of record sales quarters. The dismal performance can be attributed to several factors including bad weather impact on ZSNP construction, the limited availability of eel fingerlings, passing of quotas to cease live seafood export and the inferior prices of live cattle.
The differentiating factors
Sino Agro’s CEO further stated that as a company focused on agricultural segment revenue varies according to weather conditions, variation in food and commodity prices, and other seasonal factors. All these factors were not favorable in 2Q2015 leading to a poor performance.
The company is taking relevant measures to offset the impact of these factors by enhancing distribution arm, which remains unaltered by these factors. If everything goes as planned, there can be substantial improvement in the bottom and top lines from coming quarters. With weather conditions getting better and implementation of new measures, the company anticipates strong growth in 2H2015.
Bertil Tiusanen, the CFO, stated that there are many external factors having a substantial impact on 2Q2015 financial performance. Considering these factors, it becomes touch to evaluate the implications on company’s operations going forward. The financial numbers of 2Q2015 will be a major setback in full year results.
In early morning trade on Wednesday, the stock price of Sino Agro Food Inc (OTCBB:SIAF) surged more than 0.90% and is trading close to $12.31.