August 13, 2010
Yongye quadruples Q2 earnings on-year
Yongye International Inc. announced Thursday (Aug 12) that its second-quarter earnings more than quadrupled against on-year on growth from its existing Chinese customers.
The results topped Wall Street forecasts, sending the plant and animal feed maker''s shares up US$0.19, or 2.3%, to US$8.52 in morning trading despite broader market losses. The China-based company booked a profit of US$24.2 million, or US$0.54 per share, in the quarter ended June 30. That''s up from US$6 million, or US$0.20 per share, in the same quarter a year ago.
Revenue climbed 93% to US$89.4 million from US$46.3 million. Yongye said a significant number of sales came from new geographic markets outside its core provinces in northern China. Analysts surveyed were looking for earnings of US$0.53 per share on revenue of US$80.4 million, on average. Yongye credited the results to more aggressive advertising and promotion efforts during the quarter, as well as adding a large number of new stores to its network.
Looking ahead, Yongye is forecasting 2010 revenue between US$180 million and US$185 million, up 83% to 89% on-year. The company also increased its year-end target for the number of independently-owned, branded stores selling Yongye''s Shengmingsu products to at least 23,000 by the end of 2010.
Yongye expects to complete its acquisition of the development rights to a lignite coal resource project by the end of the year, and expects the construction of its new production facility to be finished this month. Humic acid, which is extracted from lignite coal, accounts for the largest percentage of Yongye''s cost of goods sold and the company said the acquisition will help it mitigate fluctuations in market prices, quality and delivery.
The new facility will expand annual production capacity for Yongye''s Shengmingsu plant nutrient product from 15,000 tonnes per year to 35,000 tonnes, and boost capacity for its Shengmingsu animal nutrient product from 1,000 tonnes a year to 11,000 tonnes.