HONG KONG, Aug 23, 2011 (GlobeNewswire via COMTEX) -- Le Gaga Holdings Limited /quotes/zigman/626760/quotes/nls/gaga GAGA -10.62% ("Le Gaga" or "the Company"), one of the largest greenhouse vegetable producers in China as measured by the area of greenhouse coverage and one of the fastest growing major vegetable producers in China, today announced its financial results for the first fiscal quarter ended June 30, 2011.1
Highlights of the Quarter Ended June 30, 2011
-- Revenue increased by RMB40.0 million, or 48.0%, from RMB83.3 million for
the three months ended June 30, 2010 to RMB123.3 million (US$19.1
million) for the three months ended June 30, 2011.
-- Profit for the period decreased by RMB10.9 million, from RMB23.5 million
for the three months ended June 30, 2010 to RMB12.6 million (US$2.0
million) for the three months ended June 30, 2011.
-- Adjusted profit for the period2 (non-IFRS measure) increased by RMB11.6
million, or 39.5%, from RMB29.4 million for the three months ended June
30, 2010 to RMB41.0 million (US$6.3 million) for the three months ended
June 30, 2011. A reconciliation of the adjusted profit for the period to
profit for the period determined in accordance with IFRS was set forth
in Appendix V.
-- Adjusted EBITDA3 (non-IFRS measure) increased by RMB16.2million, or
40.5%, from RMB40.0 million for the three months ended June 30, 2010 to
RMB56.2 million (US$8.7 million) for the three months ended June 30,
2011. A reconciliation of the adjusted EBITDA to profit for the period
determined in accordance with IFRS was set forth in Appendix VI.
-- Basic and diluted earnings per share was RMB0.55 cents (0.09 US cents)
and RMB0.53 cents (0.08 US cents), respectively, for the three months
ended June 30, 2011. Basic and diluted earnings per ADS4 was RMB27.5
cents (4.25 US cents) and RMB26.5 cents (4.10 US cents), respectively,
for the three months ended June 30, 2011.
-- Cash generated from operating activities increased by RMB37.7 million,
or 84.2%, from RMB44.8 million for the three months ended June 30, 2010
to RMB82.5 million (US$12.8 million) for the three months ended June 30,
2011.
-- Revenue-per-mu increased 36.8% from RMB4,420 for the three months ended
June 30, 2010 to RMB6,046 for the three months ended June 30, 2011.
-- Production output increased 42.1% from 29,267 metric tons for the three
months ended June 30, 2010 to 41,592 metric tons for the three months
ended June 30, 2011. Production yield (production output per mu)
increased 25.0% from 1.6 metric tons for the three months ended June 30,
2010 to 2.0 metric tons per mu for the three months ended June 30, 2011.
-- Total arable land as of June 30, 2011 was 21,952 mu (1,463 hectare),
representing an increase of 1,550 mu compared to March 31, 2011, and an
increase of 3,102 mu compared to June 30, 2010.
-- Total greenhouse area as of June 30, 2011 was 7,150 mu (477 hectare),
representing an increase of 371 mu compared to March 31, 2011 and an
increase of 3,209 mu compared to June 30, 2010. Greenhouse land area as
a percentage of total arable land decreased from 33.2% as of March 31,
2011 to 32.6% as of June 30, 2011.
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4635 to US$1.00, the effective noon buying rate as of June 30, 2011 in The City of New York for cable transfers of RMB as set forth in H.10 weekly statistical release of the Federal Reserve Board.
2 Defined as profit for the period before the net impact of biological assets fair value adjustment and further adjusted to exclude the effects of non-cash share-based compensation and offering expenses charged to the income statement.
3 Defined as EBITDA (earnings before net finance income (costs), income tax expense, depreciation and amortization), as further adjusted to exclude the effects of non-cash share-based compensation, the net impact of biological assets fair value adjustment and offering expenses charged to the income statement.
4 American depositary shares, which are traded on the NASDAQ Global Select Market, each represents 50 ordinary shares of the Company.
Mr. Shing Yung Ma, the Chairman and Chief Executive Officer of Le Gaga, commented, "We are very pleased with our performance in the first fiscal quarter. Our farm base development is on track with various construction projects at different farm bases. Most of the construction activity in our new Xianyou and Putian farm bases is approaching completion and the farm bases will be ready for solanaceous production during the off-season winter months. We are also working on a number of initiatives to further improve our greenhouse vegetable production model. Training and development of our farm managers remain priorities for us. Furthermore, we have recently added a new independent director to our board of directors and established a corporate governance and nominating committee."
Mr. Auke Cnossen, the Chief Financial Officer of Le Gaga, added, "As a result of our increasing greenhouse coverage, solanaceous products accounted for a larger percentage of total production in the first fiscal quarter and revenue per mu has increased further. Solanaceous vegetables typically have higher ASP compared to lower value leafy vegetables and are particularly well suited for greenhouse production. More solanaceous production increases the seasonality of our revenues but also increases our annual productivity, with higher production during the winter months. More land preparation for solanaceous planting activities during August and September may result in the second fiscal quarter accounting for a lower percentage of annual sales compared to other quarters. Furthermore, we continue to see land rental rates for new land increase at a rapid pace. This trend further validates our focus on increasing productivity, as measured in revenue per mu, through our greenhouse business model."
Summary of Operating
Data
As of June 30, 2010 As of March 31, 2011 As of June 30, 2011
-----------------------------------------------------------------------------------------------------------------------------------
Under Under
construc construc
tion tion
or or Under
Reserve Reserve construction
Operating d Total Operating d Total Operating or Reserved Total
-----------------------------------------------------------------------------------------------------------------------------------
Arable
land
(1) 18,850 mu -- 18,850 mu 20,402 mu -- 20,402 mu 20,735 mu 1,217 mu 21,952 mu
(1,257 hectare) -- (1,257 hectare) (1,360 hectare) -- (1,360 hectare) (1,382 hectare) (81 hectare) (1,463 hectare)
Greenhou
se area
(2) 3,941 mu 3,941 mu 6,779 mu 6,779 mu 7,150 mu 7,150 mu
(263 hectare) (263 hectare) (452 hectare) (452 hectare) (477 hectare) (477 hectare)
Greenhou
se area
as a
percent
age of
total
arable
land 20.9% N/A 20.9% 33.2% N/A 33.2% 34.5% N/A 32.6%
Three Months
Ended June 30,
----------------
2010 2011
------- -------
Total production output (metric tons) 29,267 41,592
Production yield (metric tons per mu) (3) 1.6 2.0
Revenue-per-mu (RMB) (3) 4,420 6,046
(1) Total arable land area excludes land that we used on a temporary basis.
The Company has signed lease agreements for the lease of 3,950 mu in December 2010. As of June 30, 2011, 3,500 mu of
cleared land has been handed over to the Company for operation.
Land under construction or reserved includes newly leased land which has not yet been put into production and is
either under construction or in reserve for future development.
(2) As of June 30, 2010, there were 1,550 mu bamboo-made greenhouses and 2,391 mu steel-made greenhouses.
As of March 31, 2011, there were 789 mu bamboo-made greenhouses and 5,990 mu steel-made greenhouses.
As of June 30, 2011, there were 789 mu bamboo-made greenhouses and 6,361 mu steel-made greenhouses.
(3) For the purposes of calculating production yield and revenue-per-mu, average land area within each reporting
period also includes land that we used on a temporary basis to generate the production output and revenue.
Financial Results for the Three Months Ended June 30, 2010 and 2011
Revenue increased by RMB40.0 million, or 48.0%, from RMB83.3 million for the three months ended June 30, 2010 to RMB123.3 million (US$19.1 million) for the three months ended June 30, 2011. The increase in revenue was primarily attributable to (1) a net increase in average operating land, and (2) an increase in revenue-per-mu from RMB4,420 for the three months ended June 30, 2010 to RMB6,046 for the three months ended June 30, 2011, which was in turn primarily due to (i) an increase in production yield from 1.6 metric tons per mu for the three months ended June 30, 2010 to 2.0 metric tons per mu for the three months ended June 30, 2011, and (ii) an increase in the average selling price of our produce from RMB2,847 per ton in the three months ended June 30, 2010 to RMB2,965 (US$458.7) per ton in the three months ended June 30, 2011.
The increase in revenue-per-mu for the three months ended June 30, 2011 was primarily driven by (1) increased greenhouse coverage, leading to improved quality of our products and better product mix, (2) enhanced cultivation know-how, and (3) market inflation.
Cost of inventories sold increased by RMB27.0 million, or 34.0%, from RMB79.3 million for the three months ended June 30, 2010 to RMB106.3 million (US$16.4 million) for the three months ended June 30, 2011.
Adjusted cost of inventories sold5 (non-IFRS measure) increased by RMB17.1 million, or 57.4%, from RMB29.8 million for the three months ended June 30, 2010 to RMB46.9 million (US$7.3 million) for the three months ended June 30, 2011. Adjusted cost of inventories sold as a percentage of revenue increased from 35.8% for the three months ended June 30, 2010 to 38.0% for the three months ended June 30, 2011, primarily due to (1) increased depreciation due to more greenhouses, (2) increased labor costs associated with training of farm workers for new farms and (3) more direct materials, such as land films and plastic, as a percentage of revenue. A reconciliation of adjusted cost of inventories sold to cost of inventories sold determined in accordance with IFRS as set forth in Appendix IV.
5 Defined as cost of inventories sold before biological assets fair value adjustment.
Three Months Ended June 30,
-------------------------------
2010 2011
---------- -------------------
RMB RMB US$
---------- --------- --------
(In thousands)
Biological assets fair value adjustment included in cost of inventories sold (49,457) (59,405) (9,191)
Changes in fair value less costs to sell of biological assets 47,570 36,163 5,595
---------- --------- --------
Net impact of biological assets fair value adjustment (1,887) (23,242) (3,596)
========== ========= ========
The net impact of the biological assets fair value adjustment represents the net increase or decrease in the gain in fair value less cost to sell of crops on our farmland at the end of the reporting period compared to the end of the immediately preceding reporting period.
A net loss of RMB23.2 million was recognized arising from biological assets fair value adjustment for the three months ended June 30, 2011, as compared to a net loss of RMB1.9 million recognized for the three months ended June 30, 2010.
The net loss of RMB23.2 million for the three months ended June 30, 2011 primarily arose from the transition from solanaceous to leafy products. As the solanaceous season ended and the leafy season started during the current period, most of the crops on our farm land on June 30, 2011 were lower value leafy products, while most of the crops on our farmland on March 31, 2011 (the immediately preceding reporting period end) were higher value solanaceous products, resulting in a negative net impact.
The larger negative net impact for the three months ended June 30, 2011 compared to that of the three months ended June 30, 2010 primarily resulted from our extension of the solanaceous season, with more high value solanaceous product on our fields as of March 31, 2011 as compared to March 31, 2010.
Our packing expenses increased by RMB3.5 million, or 71.4%, from RMB4.9 million for the three months ended June 30, 2010 to RMB8.4 million (US$1.3 million) for the three months ended June 30, 2011, primarily due to an increase of RMB2.7 million in packing material consumed, in turn primarily due to (1) the increase in our sales volume of solanaceous products which require more packaging materials, (2) our effort to enhance our brand awareness, and (3) more long-distance transportation.
Our land preparation costs increased by RMB1.9 million, or 37.3%, from RMB5.1 million for the three months ended June 30, 2010 to RMB7.0 million (US$1.1 million) for the three months ended June 30, 2011, which was primarily due to an increase in greenhouse coverage which increased the unit land preparation cost during the same period of rotation.
Our selling and distribution expenses increased by RMB4.6 million, or 107.0%, from RMB4.3 million for the three months ended June 30, 2010 to RMB8.9 million (US$1.4 million) for the three months ended June 30, 2011, which was primarily due to an increase of RMB4.5 million in transportation costs, in line with the increase in our revenue and more long-distance transportation.
Our administrative expenses increased by RMB4.2 million, or 41.2%, from RMB10.2 million for the three months ended June 30, 2010 to RMB14.4 million (US$2.2 million) for the three months ended June 30, 2011, primarily due to (1) an increase of RMB1.1 million in non-cash share-based compensation expenses relating to our option grants, (2) an increase of RMB0.7 million for staff cost, (3) an increase of RMB0.6 million in audit related fees, and (4) an increase in other general expenses including legal and professional fees, depreciation and staff welfare.
We had net finance income of RMB150,000 (US$23,000) for the three months ended June 30, 2011, as compared to a net finance costs of RMB56,000 for the three months ended June 30, 2010. The net finance income of RMB150,000 for the three months ended June 30, 2011 was primarily due to (1) a net exchange gain of RMB2.7 million, and (2) interest income of RMB292,000, which was partially offset by interest expense of RMB2.8 million.
As a result of the foregoing factors, profit for the three months ended June 30, 2011 decreased by RMB10.9 million, from RMB23.5 million for the three months ended June 30, 2010 to RMB12.6 million (US$2.0 million) for the three months ended June 30, 2011.
Our adjusted profit for the period, increased by RMB11.6 million or 39.5% from RMB29.4 million for the three months ended June 30, 2010 to RMB41.0 million (US$6.3 million) for the three months ended June 30, 2011.
Our adjusted EBITDA increased by RMB16.2 million, or 40.5%, from RMB40.0 million for the three months ended June 30, 2010 to RMB56.2 million (US$8.7 million) for the three months ended June 30, 2011.
Basic and diluted earnings per share was RMB0.55 cents (0.09 US cents) and RMB0.53 cents (0.08 US cents), respectively, for the three months ended June 30, 2011. Basic and diluted earnings per ADS was RMB27.5 cents (4.25 US cents) and RMB26.5 cents (4.10 US cents), respectively, for the three months ended June 30, 2011.
Our operating cash inflow increased by RMB37.7 million, or 84.2%, from RMB44.8 million for the three months ended June 30, 2010 to RMB82.5 million (US$12.8 million) for the three months ended June 30, 2011, primarily due to (1) our increase in revenue and (2) a decrease in accounts receivables.
Cash used in investing activities increased by RMB55.4 million, or 97.5%, from RMB56.8 million for the three months ended June 30, 2010 to RMB112.2 million (US$17.4 million) for the three months ended June 30, 2011. The cash outflow in investing activities of RMB112.2 million for the three months ended June 30, 2011 was primarily due to our payment for construction in progress of RMB109.2 million which mainly consisted of (1) payment for construction of greenhouses of RMB61.0 million, (2) payment of RMB29.6 million for agricultural infrastructure, and (3) payment for land improvements of RMB13.1 million.
Business Outlook for the fiscal quarter ending September 30, 2011
The Company estimates that its revenue for the second fiscal quarter ending September 30, 2011 will be between RMB100 million and RMB110 million, representing a year over year growth rate of approximately 5% to 15%.
This forecast reflects the Company's current and preliminary view, which is subject to change.
Conference Call
The Company will host a conference call at 8:00 a.m. ET on 23 August 2011 (8:00 p.m. Hong Kong Time) to review the Company's financial results and answer questions. You may access the live interactive call via:
-- +1 866 549 1292 (U.S. Toll Free)
-- + 400 681 6949 (China Toll Free)
-- +852 3005 2050 (International)
-- Pass Code: 534242#
Please dial-in approximately 10 minutes in advance to facilitate an on-time start.
A replay will be available for two weeks after the call and may be accessed via:
-- +852 3005 2020
-- Passcode: 135415#
A live and archived webcast of the call, as well as a presentation with the Company's financial results will be available on the Company's website at www.legaga.com.hk/html/index.php .
About Le Gaga Holdings Limited /quotes/zigman/626760/quotes/nls/gaga GAGA -10.62%
Le Gaga is one of the largest greenhouse vegetable producers in China as measured by the area of greenhouse coverage and one of the fastest growing major vegetable producers in China. The Company sells and markets over 100 varieties of vegetables to wholesalers, institutional customers and supermarkets in China and Hong Kong with a trusted brand among customers. The Company supplies vegetables to supermarkets, such as Walmart in China and Wellcome, ParknShop and Vanguard in Hong Kong.
The Company currently operates farms in the Chinese provinces of Fujian, Guangdong and Hebei. The Company produces and sells high quality vegetables all-year-round leveraging its large-scale greenhouses, proprietary horticultural know-how and comprehensive database.
The Le Gaga Holdings Limited logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=8233
Safe Harbor Statement
This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. These forward-looking statements may include, but are not limited to, statements containing words such as "may," "could," "would," "plan," "anticipate," "believe," "estimate," "predict," "potential," "expects," "intends" and "future" or similar expressions. Among other things, the management's quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements speak only as of the date of this press release and are subject to change at any time. These forward-looking statements are based upon management's current expectations and are subject to a number of risks, uncertainties and contingencies, many of which are beyond the Company's control that may cause actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's final prospectus, dated October 28, 2010, filed with the Securities and Exchange Commission, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Potential risks and uncertainties include, but are not limited to: the Company's ability to continue to lease farmland or forestland; the legality or validity of the Company's leases of agricultural land; risks associated with extreme weather conditions, natural disasters, crops diseases, pests and other natural conditions; fluctuations in market prices and demand for the Company's products; risks of product contamination and product liability claims as well as negative publicity associated with food safety issues in China; risks of labor shortage and rising labor costs; the Company's ability to comply with U.S. public accounting reporting requirements, including maintenance of an effective system of internal controls over financial reporting; and the Company's susceptibility to adverse changes in political, economic and other policies of the Chinese government that could materially harm its business. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further information regarding risks and uncertainties faced by the Company is included in its filings with the U.S. Securities and Exchange Commission, including its final prospectus, dated October 28, 2010.
Use of Non-IFRS measures
Adjusted cost of inventories sold is defined as cost of inventories sold before biological assets fair value adjustment. We are primarily engaged in agricultural activities of cultivating, processing and distributing vegetables and have therefore adopted International Accounting Standard 41 "Agriculture", or IAS 41, in accounting for biological assets and agricultural produce. Unlike the historical cost accounting model, IAS 41 requires us to recognize in our income statements the gain or loss arising from the change in fair value less costs to sell of biological assets and agricultural produce for each reporting period. Cost of inventories sold determined under IAS 41 reflects the deemed cost of agricultural produce, which is based on their fair value (less costs to sell) at the point of harvest. Biological assets fair value adjustment is the difference between the deemed cost of the agricultural produce and the plantation expenditure we incurred to cultivate the produce to the point of harvest. Although an "adjusted" cost of inventories sold excluding these fair value adjustments is a non-IFRS measure, we believe that separate analysis of the cost of inventories sold excluding these fair value adjustments adds clarity to the constituent parts of our cost of inventories sold and provides additional useful information for investors to assess our cost structure. A reconciliation of adjusted cost of inventories sold to IFRS cost of inventories sold was set forth in Appendix IV.
Adjusted profit for the period represents profit for the period before the net impact of biological assets fair value adjustment and further adjusted to exclude the effects of non-cash share-based compensation and offering expenses charged to the income statement. We believe that separate analysis of the net impact of the biological assets fair value adjustments, non-cash share-based compensation and offering expenses adds clarity to the constituent part of our results of operations and provides additional useful information for investors to assess the operating performance of our business. A reconciliation of adjusted profit for the period was set forth in Appendix V.
Adjusted EBITDA is defined as EBITDA (earnings before net finance income (costs), income tax expense, depreciation and amortization), as further adjusted to exclude the effects of non-cash share-based compensation, the net impact of biological assets fair value adjustment and offering expenses charged to the income statement. We believe adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. You should use adjusted EBITDA as a supplemental analytical measure to, and in conjunction with, our IFRS financial data. In addition, we believe that adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of adjusted EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. We use these non-IFRS financial measures for planning and forecasting and measuring results against the forecast. Using several measures to evaluate the business allows us and investors to assess our relative performance against our competitors and ultimately monitor our capacity to generate returns for our shareholders. A reconciliation of the adjusted EBITDA to profit for the period was set forth in Appendix VI.
Appendix I
Le Gaga Holdings Limited
Unaudited Condensed Consolidated Income Statements
For the three months ended June 30, 2010 and 2011
---------------------------------------------------------------
Three Months Ended June 30,
2010 2011
---------- ---------------------
RMB RMB US$
---------- ---------- ---------
(In thousands, except per share
data)
Revenue 83,317 123,332 19,081
Cost of inventories sold (79,251) (106,276) (16,442)
Changes in fair value less
costs to sell related to
---------- ---------- ---------
Crops harvested during the
period 20,018 13,173 2,038
Growing crops on the
farmland at the period end 27,552 22,990 3,557
---------- ---------- ---------
Total changes in fair value
less costs to sell of
biological assets 47,570 36,163 5,595
Packing expenses (4,938) (8,431) (1,304)
Land preparation costs (5,084) (7,008) (1,084)
Other income 105 135 21
Research and development
expenses (1,334) (2,061) (319)
Selling and distribution
expenses (4,271) (8,882) (1,374)
Administrative expenses (10,236) (14,361) (2,222)
Other expenses (2,327) (133) (21)
---------- ---------- ---------
Results from operating
activities 23,551 12,478 1,931
Finance income 59 2,937 454
Finance costs (115) (2,787) (431)
---------- ---------- ---------
Net finance (costs)/income (56) 150 23
Profit before taxation 23,495 12,628 1,954
Income tax expense -- -- --
---------- ---------- ---------
Profit for the period 23,495 12,628 1,954
========== ========== =========
Earnings per
ordinary/preferred share
(in cents)
Basic 1.34 0.55 0.09
========== ========== =========
Diluted 1.32 0.53 0.08
========== ========== =========
Earnings per ADS (in cents)
Basic 67.00 27.50 4.25
========== ========== =========
Diluted 66.00 26.50 4.10
========== ========== =========
Appendix II
Le Gaga Holdings Limited
Unaudited Condensed Consolidated Balance Sheets
As of March 31 and June 30, 2011
-------------------------------------------------------
March 31,
2011 June 30, 2011
---------- ------------------
RMB RMB US$
---------- --------- -------
(In thousands)
Non-current assets
Property, plant and
equipment 575,246 599,072 92,685
Construction in
progress 24,294 83,828 12,969
Lease prepayments 2,413 2,387 369
Long-term deposits and
prepayments 56,991 54,980 8,506
Biological assets 6,049 6,409 992
---------- --------- -------
Total non-current
assets 664,993 746,676 115,521
---------- --------- -------
Current assets
Biological assets 73,662 47,633 7,370
Inventories 4,608 6,702 1,037
Trade and other
receivables 63,000 46,359 7,172
Cash 598,722 551,491 85,324
---------- --------- -------
Total current assets 739,992 652,185 100,903
---------- --------- -------
Total assets 1,404,985 1,398,861 216,424
========== ========= =======
Equity
Capital 687,706 687,706 106,398
Reserves 592,041 603,285 93,337
---------- --------- -------
Total equity 1,279,747 1,290,991 199,735
---------- --------- -------
Non-current liabilities
Bank loan 78,835 77,840 12,043
---------- --------- -------
Current liabilities
Bank loan 6,000 -- --
Trade and other
payables 36,321 25,948 4,014
Current taxation 4,082 4,082 632
---------- --------- -------
Total current
liabilities 46,403 30,030 4,646
---------- --------- -------
Total liabilities 125,238 107,870 16,689
---------- --------- -------
Total equity and
liabilities 1,404,985 1,398,861 216,424
========== ========= =======
Appendix III
Le Gaga Holdings Limited
Unaudited Condensed Consolidated Statements of Cash Flow
For the three months ended June 30, 2010 and 2011
--------------------------------------------------------------------------
Three Months Ended June 30,
2010 2011
---------- -------------------
RMB RMB US$
---------- --------- --------
(In thousands)
Operating activities
Profit before taxation 23,495 12,628 1,954
Adjustments for:
Amortization of lease prepayments 26 26 4
Depreciation 10,500 15,329 2,372
Equity settled share-based transactions 4,061 5,124 793
Changes in fair value less costs to sell
of biological assets (47,570) (36,163) (5,595)
Interest income (59) (292) (45)
Interest expense 8 2,787 431
Net loss on disposal of property, plant
and equipment 1,957 73 11
Foreign exchange gain (855) (1,326) (205)
---------- --------- --------
(8,437) (1,814) (280)
Changes in current biological assets due
to plantations (22,320) (40,731) (6,302)
Changes in inventories, net of effect of
harvested crops transferred to
inventories 76,175 100,987 15,624
Decrease in trade and other receivables 568 15,706 2,430
(Increase)/decrease in long-term deposits
and prepayments (1,412) 3,033 469
Increase in trade and other payables 214 5,277 816
---------- --------- --------
Cash generated from operations 44,788 82,458 12,757
Income tax paid -- -- --
---------- --------- --------
Net cash generated from operating
activities 44,788 82,458 12,757
---------- --------- --------
Appendix III
Le Gaga Holdings Limited
Unaudited Condensed Consolidated Statements of Cash Flow
For the three months ended June 30, 2010 and 2011
-----------------------------------------------------------------------
Three Months Ended June 30,
2010 2011
---------- ---------------------
RMB RMB US$
---------- ---------- ---------
(In thousands)
---------------------------------
Investing activities
Interest received 59 292 45
Plantations of non-current
biological assets (430) (518) (80)
Payment for the purchase of
property, plant and equipment (1,861) (3,751) (580)
Payment for construction in progress (55,186) (109,244) (16,902)
Proceeds from disposal of property,
plant and equipment 653 1,000 155
---------- ---------- ---------
Net cash used in investing
activities (56,765) (112,221) (17,362)
---------- ---------- ---------
Financing activities
Interest paid (1,114) (5,378) (832)
Proceeds from bank loans 53,632 -- --
Repayment of bank loans -- (6,000) (928)
---------- ---------- ---------
Net cash generated from/(used in)
financing activities 52,518 (11,378) (1,760)
---------- ---------- ---------
Net increase/(decrease) in cash 40,541 (41,141) (6,365)
---------- ---------- ---------
Cash at April 1 139,207 598,722 92,631
Effect of foreign exchange rate
changes (480) (6,090) (942)
---------- ---------- ---------
Cash at June 30 179,268 551,491 85,324
========== ========== =========
Appendix IV
Le Gaga Holdings Limited
Reconciliation of Non-IFRS adjusted cost of inventories sold
to cost of inventories sold
For the three months ended June 30, 2010 and 2011
-------------------------------------------------------------------------
Three Months Ended June 30,
---------------------------------
2010 2011
---------- ---------------------
RMB RMB US$
---------- ---------- ---------
(In thousands)
Cost of inventories sold (79,251) (106,276) (16,442)
Less: biological assets fair value
adjustment 49,457 59,405 9,191
---------- ---------- ---------
Adjusted cost of inventories sold (29,794) (46,871) (7,251)
========== ========== =========
Appendix V
Le Gaga Holdings Limited
Reconciliation of Non-IFRS adjusted profit for the period
to profit for the period
For the three months ended June 30, 2010 and 2011
-----------------------------------------------------------------
Three Months Ended June 30,
---------------------------
2010 2011
---------- ---------------
RMB RMB US$
---------- ------- ------
(In thousands)
---------------------------
Profit for the period 23,495 12,628 1,954
Add:
Non-cash share-based compensation 4,061 5,124 793
Offering expenses -- -- --
Net impact of biological assets
fair value adjustment 1,887 23,242 3,596
---------- ------- ------
Adjusted profit for the period2 29,443 40,994 6,343
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Appendix VI
Le Gaga Holdings Limited
Reconciliation of Non-IFRS adjusted EBITDA to profit for
the period
For the three months June 30, 2010 and 2011
-----------------------------------------------------------
Three Months Ended June 30,
-------------------------------
2010 2011
---------- -------------------
RMB RMB US$
---------- --------- --------
(In thousands)
-------------------------------
Profit for the period 23,495 12,628 1,954
Add:
Amortization of lease
prepayments 26 26 4
Depreciation 10,500 15,329 2,372
Finance costs 115 2,787 431
Income tax expense -- -- --
Non-cash share-based
compensation 4,061 5,124 793
Biological assets fair
value adjustment
included in cost of
inventories sold 49,457 59,405 9,191
Offering expenses -- -- --
Less:
Finance income (59) (2,937) (454)
Changes in fair value
less costs to sell of
biological assets (47,570) (36,163) (5,595)
---------- --------- --------
Adjusted EBITDA3 40,025 56,199 8,696
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