Hybrid and genetically-modified crop seeds supplier Origin Agritech Limited (SEED), Thursday, reported a narrower loss for fiscal 2009, reflecting an increase in revenues and improvement in gross margins. The company also provided a revenue guidance for the full year 2010.
For fiscal 2009, the Beijing-based company's net loss was RMB 40.82 million or US$5.98 million as compared with a loss of RMB 43.29 million or US$6.37 million in the prior-year period. On a per share basis, net loss narrowed to RMB 1.77 or US$0.26 from a loss of RMB 1.88 in the 2008-year period.
On an adjusted basis, net earnings were US$1.91 million or US$0.08 per share compared to a loss of US$7.72 million or US$0.34 per share a year earlier. Adjusted results exclude repurchase-related special items, amortization of discount of convertible notes and gains from write-downs of fair value of embedded derivatives.
In the second quarter of 2009, Origin repurchased its outstanding convertible notes from Citadel Investment Group. Consequently, the agri-biotech farming specializer incurred a one-time loss of RMB 51.10 million or US$7.48 million on repurchase of convertible notes.
Revenues for the year increased 15.39% to RMB 592.49 million or US$86.76 million from RMB 513.49 million or US$75.63 million in fiscal 2008.
Exclusive of scrap, revenues from hybrid corn seeds were RMB 411.41 million versus RMB 355.89 million last year, hybrid rice seeds revenues rose to RMB 125.14 million from RMB 95.08 million in the prior year, and revenues from hybrid canola seeds were RMB 42.75 million compared to RMB 23.77 million in the year-ago period. However revenues from hybrid cotton seeds fell to RMB 9.92 million from RMB 16.62 million in the same period last year. Total normal sales for the period was RMB 589.27 million versus RMB 491.43 million a year earlier.
Origin said its scrap sales for the full-year 2009 only amounted to 0.54% of its total revenues with limited the impact on the company's overall gross margin. Excluding scrap sales and impairment of inventory, Origin's gross margins for the period were 35.60% as compared to 31.56% in the previous year.
For the year, gross profit surged 83.72% to RMB199.70 million or US$29.24 million from RMB108.70 million or US$15.94 million in the 2008-year period.
During the 12-month period, total operating expenses increased 1.91% to RMB 153.95 million or US$22.55 million from RMB 151.07 million or US$22.25 million in the comparable period prior year. Selling and marketing expenses were RMB 55.65 million or US$8.15 million versus RMB 53.20 million. Research and development expenses were RMB 33.47 million or US$4.90 million compared with RMB 24.51 million in the 2008-year period, whereas general and administrative costs declined to RMB 64.83 million or US$9.50 million from RMB 73.36 million last year.
For fiscal 2009, advances from customers surged 57.6% to US$32.21 million from US$20.44 million in the corresponding period last year.
Commenting on the results, president and chief executive officer Liang Yuan said, "As expected, Origin's financials for the fiscal 2009 period ended September 30, 2009 showed revenue growth, margin improvement, and bottom line increases from the fiscal year ended September 30, 2008." The company anticipates these trends to continue into fiscal 2010.
Looking ahead to fiscal 2010, Origin expects its revenues to be in a range of RMB 630 million to RMB 660 million, with hybrid rice and corn seed supply levels at normal levels. In 2010, the company expects to further develop its GM product pipeline as well as complementary product lines.
As of December 2009, Origin had 23 proprietary corn seed products, 18 proprietary rice seed products, three proprietary cotton seed products and three proprietary canola seed products, which are in commercial production and distribution. Currently, the company has nine breeding stations and employs 136 full time research personnel.
SEED is currently trading on the Nasdaq at $13.10 per share, down $0.44 or 3.25% on a volume of 6.69 million shares. In the past 52-week period, the shares have been trading in a range of $1.70 to $15.02.
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