Agricultural products provider Agria Corp. (GRO) Thursday reported a turn to loss in the first quarter, hurt by lower revenues and deferred income tax expenses. The company also reported a loss for the fourth quarter compared to a profit in the prior-year quarter. The company provided second quarter and full year 2008 revenue outlook.
Net loss for Beijing, China-based Agria was RMB58.0 million or RMB0.92 per ADS, compared to a profit of RMB50.9 million or RMB1.02 per ADS in the prior-year quarter.
Results were primarily impacted due to a RMB64.7 million or US$9.2 million settlement between shareholder, Brothers Capital Limited, and management of P3A and higher margin sheep breeding segment. The company also incurred a deferred income tax expense of RMB5.6 million relating to P3A in the first quarter of 2008, which did not exist in the same period in 2007.
Excluding share-based compensation expense of RMB 8.5 million and the P3A Settlement in the first quarter of 2008, net income for the first quarter was RMB8.5 million or RMBB 0.24 per ADS.
Revenue for the quarter decreased to RMB114.4 million from RMB118.7 million in the previous-year quarter.
On a segmental basis, revenue from the corn seed segment increased 10%, seedling segment increased 35%, while sheep breeding segment declined 77% from the prior-year quarter.
In U.S dollars, net loss for the quarter was $8.3 million or $0.13 per ADS and revenues were $16.3 million. Non-GAAP net loss was $2.2 million or $0.03 per share for the quarter.
Fourth quarter results
Net loss for the fourth quarter was RMB42.3 million or RMB0.74 per ADS, compared to a profit of RMB67.4 million or RMB1.35 per ADS in the year-ago quarter.
On a non-GAAP basis, net loss was RMB33.3 million or RMB0.58 per ADS for the quarter.
Revenue for the quarter surged to RMB318.1 million from RMB149.2 million in the same quarter a year ago.
Segment-wise, revenue from the corn seed increased 39.9%, sheep breading increased by 32.4%, and seedling segment increased by 40.2% from the year-ago quarter.
Revenues from the corn seed, sheep breeding and seedling segments accounted for 66%, 26% and 8%, respectively, of total revenues.
In U.S dollars, net loss for the quarter was $5.8 million or $0.10 per share and revenue, $43.6 million. Non-GAAP net loss was $4.6 million or $0.08 per share for the quarter.
Fourth quarter results reflect the impact of recognizing a deferred income tax expense of RMB 157.6 million (US$21.6 million) relating to operating subsidiary, Primalights III Agriculture Development Co., Ltd. starting in the fourth quarter of 2007, which did not exist in 2006.
Full year results
For full year 2007, Agria's net income decreased to RMB142.2 million or RMB2.68 per ADS from RMB253.9 million or RMB5.08 per ADS a year ago.
Revenue for the period was RMB670.8 million, up from RMB489.7 million last year.
In U.S dollar, net income for the period was $19.5 million or $0.37 per share and revenue was $92.0 million.
Outlook
Looking ahead to the second quarter of 2008, the company expects total revenues in the range of RMB125 million to RMB135 million or US$17 million to US$19 million.
For full year 2008, Agria expects revenues in the range of RMB738 million to RMB771 million or US$100 million to US$110 million.
GRO is currently trading at $4.64, down $1.99 or 30.023%, on a volume of 1.89 million shares.
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