Sino Agro Food, Inc. Reports Record Quarterly Revenue of $55.1M with EPS of $.16

GUANGZHOU, China, May 16, 2013 /PRNewswire/ -- Sino Agro Food, Inc. (OTC BB: SIAF.OB), an emerging integrated, diversified agriculture technology and organic food company ("the Company") with principal operations located throughout the People's Republic of China ("PRC"), is pleased to announce financial results for the quarter ended March 31, 2013:

Revenues of $55.1M in the first quarter continued a string of four consecutive sequential quarterly records. In the upcoming conference call, the Company will discuss 2013 guidance, anticipating continued record results.

This quarter's revenues exceeded revenues for the full year of 2011.  During the quarter, stockholders' equity increased by $24,750,595 to $241,841,337.

A primary driver of this quarter's revenue growth was the strategic and incremental layering of the Company's new businesses. This was the first quarter that included sales from the import and export operation, which sold nearly 600 tons of seafood, and contributed $5.7M to revenues.

Fishery Division Performance

Revenue from the fishery division increased by $20,772,686 or 187% to $31,867,295 for the three months ended March 31, 2013 from $11,094,609 for the three months ended March 31, 2012. The increase was primarily due to the Company's increased contract service income from fishery and prawn development contracts, and the sale of fish for the three months ended March 31, 2013 versus consulting income and sale of fish for the three months ended March 31, 2012.

The price of sleepy cod dropped sharply from $25/kg to just over $16/kg on average in the first quarter. Whereas the volume of sleepy cod sold at Jiang Men City A Power Fishery Development Co., Limited ("JFD"), which operates what the company refers to as "Fish Farm 1" averaged over 80 MT per month, the decrease in price contributed to a decrease in the Company's overall gross profit margin. The sensitivity of gross margins to sleepy cod prices, or the price of any fish or prawn species will be dramatically reduced as more varied species are sold. New fish and prawn species are expected be sold during 2013 and beyond.

The Company plans to nurture Flower Pattern Eels' fingerlings into adult eels (500 gram / eel and upward) that will be supplied to Fish Farm 1 and the open dam farm and for these farms to grow the adult eels into marketable sized eels (1.5 kg / eel and larger) which at present are selling at high prices of $27 - $28 per kg. The Company expects its first shipment of fingerlings imported from Madagascar to arrive in China during the third week of May 2013.

The price of live prawn species rose on average over 100% in the first quarter of this year versus the same period in 2012. Currently wholesale prices for Mexican White prawns average $12/kg to $32/kg, depending on size. There is a corresponding increase in grow out time.  Prices are much higher for other species including Green Prawns.  On April 22, 500,000 prawn flies were placed at Prawn Farm 1, commencing the production operation at the first indoor prawn farm in Asia. The Company expects to produce 250-300 MT of prawns in 2013.

In March of 2013, Prawn Farm 2 sold its first Green Prawn flies, and increased sales of Mexican White flies by 33% over February.

With the current work schedule planned to capacity for the fishery division, the Company does not expect to take on any new fish farm construction and development projects until the third quarter of 2013.

Beef Division Performance

Revenue from the Beef Division increased by $2,865,557 or 73% to $6,795,837 for the three months ended March 31, 2013 from $3,930,280 for the three months ended March 31, 2012. The increase was primarily due to the increase in productivity of the cattle rearing division of Qinghai Sanjiang A Power Agriculture Co. Ltd. ("SJAP") and related sales.

At SJAP, construction work is on-going targeting 17 new cattle houses and related facilities by the end of 2013. There are currently 12. The Company expects this to provide the capacity for the rearing of 6,000 head of cattle annually, based on a six-month rotation. Additional head of cattle are expected to be sold through the cooperative of local farmers. Construction of the abattoir, deboning factory and related packaging facilities commenced April 21, 2013. 

Cattle Farm 1 sold 450 head of cattle in the first quarter. On April 22, 2013, 180 head were being shipped to Beijing City to be sold to a wholesaler specializing in supplying top quality beef to top hotels and restaurants. The Company is currently establishing a Cattle Station and related facilities within the Central Cattle Market and Facility of Beijing City, to distribute its own aromatic beef to top hotels and restaurants. This is the first in a broader interstate wholesale distribution development plan.

Organic Fertilizer Division Performance

Revenue from the Organic Fertilizer Division increased by $8,069,001 to $8,082,062 for the three months ended March 31, 2013 from $13,061 for the three months ended March 31, 2012. The increase was primarily due to the start up at the Hunan Shenghua A Power Agriculture Co., Limited ("HSA") division of sales of pure organic mixed fertilizer ("POMF") and by additional revenues from the newly built Concentrated Livestock Feed ("CLSF") factory at SJAP. The Fertilizer Division contributed 14.7% of revenues in the quarter, versus 6.6% in the full year 2012. Gross profit of $3,990,186 accounted for 18.5% of total gross profit, versus 5.5% in the full year 2012.

The new POMF factory targets to reach 2013 sales of 30,000 MT; the new CLSF factory is designed with an annual capacity of 60,000 MT.

Cattle Farm Division Performance

Revenue from the cattle farm division increased by $7,420,491 to $8,362,557 for the three months ended March 31, 2013 from $942,066 for the three months ended March 31, 2012.  The increase was primarily due to the increase of production and sales of cattle in Cattle Farm 1 for the three months ended March 31, 2013.

At SJAP, the Xining cattle farm, an additional 1,500 acres of land will be cropped and pastured, bringing the total to 6,500 acres granted rent free to SJAP from the local government.

Shared Marketing, Distribution and Retail Services

Marketing, distribution, and retail activities were established in 2012 as services shared by the wholesale operations to enhance and facilitate sales.

In the first quarter of 2013, the Import-Export Division sold almost 600 MT of seafood from Norway and Southeast Asia, and generated revenues of $5.7M. In April 2013 the Chinese Authorities for Imported Quotas approved the application for import of Flower Pattern Eels, Mud Crabs and Lobsters via a third party entity acting for and on behalf of the Company. Arrangements have been for import from Madagascar, and the company intends to build and outfit packaging and holding facilities to receive and pack live seafood for export from Madagascar to China.

Construction is progressing well on the Seafood and Beef Wholesale Centers 1 and 2, such that each will generate its initial revenues from the Fishery and Beef Divisions and/or from other Chinese wholesalers in the second quarter.

Other development work is proceeding on schedule, including the new Trading Center and the Leonie chain's Central Kitchen and Bakery, which is scheduled to complete late in the second quarter. The third Leonie's restaurant started operation in March, and the fourth is scheduled to open in late May or early June.

Consolidated Results

Revenue

Revenue increased by $39,127,734 or 245% to $55,107,751 for the three months ended March 31, 2013 from $15,980,016 for the three months ended March 31, 2012. The increase was primarily due to the natural growth of revenue generated from the fishery, organic fertilizer, beef and cattle farm, and the maturity of on-going divisional businesses improving.

The following chart illustrates the changes by business segment from the three months ended March 31, 2013 to three months ended March 31 2013.

Cost of Goods

Cost of Goods Sold increased by $25,618,510 or 322% to $33,584,934 for the three months ended March 31, 2013 from $7,966,424 for the three months ended March 31, 2012.  The increase was primarily due to the Company increasing its scale of operation - fishery, organic fertilizer, beef and cattle farm for the three months ended March 31, 2013 as compared for the three months ended March 31, 2012.

Gross Profit

Gross profit increased by $13,509,225 or 169% to $21,522,817 for the three months ended March 31, 2013 from $8,013,592 for the three months ended March 31 2012.  The increase was primarily due to the corresponding increase in revenues from fishery organic fertilizer, and beef and cattle farm operations.

General and Administrative Expenses

General and Administrative expenses (including depreciation and amortization) in continuing operations decreased by $16,934 0r 0.76% to $2,205,388 for the three months ended March 31 2013 from $2,222,322 for the three months ended March 31 2012. The decrease was primarily due to a decrease in general office and corporate expenses, and wages and salaries amounting to $103,274 and $358,358 respectively, offset by increases in depreciation and amortization and miscellaneous expenses of  $231,304 and $190,738 respectively.

Earnings Call Information

The Company will host an earnings call and web conference on May 20, 2013 at 11:00 AM EDT to discuss financial results for the first quarter of 2013, with questions and answers. To participate in the conference call please use the following information:

An audio replay of the conference call will be made available in the Investor Relations section of the Company's web site.

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 People's 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 beef and lamb products, fish products, bioorganic fertilizer, stock feed and cash crops.

Not a Broker/Dealer or Financial Advisor

Sino Agro Food, Inc. is not a Registered Broker/Dealer or a Financial Advisor, nor does it hold itself out to be a Registered Broker/Dealer or Financial Advisor. All material presented in this press release, on the Company's website or other media is not to be regarded as investment advice and is only for informative purposes. Readers should verify all claims and conduct their own due diligence before investing in Sino Agro Food, Inc.

Investing in small-cap, micro cap and penny stock securities is speculative and carries a high degree of risk.

No Offer of Securities

None of the information featured in this press release constitutes an offer or solicitation to purchase or to sell any securities of Sino Agro Food, Inc.

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.

SOURCE Sino Agro Food, Inc.

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