BEIJING, Aug 29, 2011 (MARKETWIRE via COMTEX) -- Agria Corporation /quotes/zigman/487479/quotes/nls/gro GRO +7.84% (the "Company" or "Agria"), a China-based company with investments in the agriculture sector, today announced that its New Zealand listed subsidiary, PGG Wrightson (nzx:PGW) ("PGW") has released its annual financial results for the fiscal year ended June 30, 2011. A copy of the PGW's financial statements can be downloaded from the following website: www.pggwrightson.co.nz/OurBusiness/MarketAnnouncements .
Xie Tao, Agria's Chief Executive Officer, said, "We are pleased with progress of PGW since our initial investment in 2009 and particularly since we increased our holding to 50.1% earlier this year. The balance sheet of PGW has been greatly strengthened. We are encouraged by PGW's outlook and are confident of improved financial performance for the next twelve months. We expect continued progress and growth as PGW directly benefits from continued strong demand for commodities worldwide and look forward to aiding the facilitation of PGW's future exploitation of business opportunities in China."
Agria intends file an amendment to its annual report on Form 20-F for the year ended December 31, 2010 to include PGW's financial results for the fiscal year ended June 30, 2011. The following is extracted from an announcement made by PGW to the New Zealand stock exchange accompanying the release of the financial results.
A 'defining year' for PGG Wrightson
Recent Key PGG Wrightson Developments:
-- Sale of PGW's NZ Farming Systems Uruguay and settlement of its
performance and management fees in December
-- Appointment of a new PGW' Managing Director, George Gould, in February
and new key roles identified in AgriServices
-- Continued expansion of PGW's AgriTech businesses in New Zealand and
Australia, and progress in new South American markets including Brazil
-- Successful completion of Agria's partial takeover of PGW in May
-- Re-commitment to PGW's wool broking business in June following the
unsuccessful capital raise by Wool Partners International
-- In June, PGW also confirmed the sale of our 50% stake in New Zealand
Merino for $7.6 m to grower owners, and most recently,
-- PGW entered into an agreement for the sale of its PGG Wrightson
Finance to Heartland New Zealand. Further to that PGW has every
expectation that the transaction will be fully concluded in the near
future following treasury approval this week.
The financial results of PGG Wrightson (nzx:PGW), New Zealand's leading rural services company, were broadly in line with expectations for the fiscal year ending June 30, 2011. Earnings before interest, tax, depreciation and amortization (EBITDA) were NZ$49.4 million from operating revenue of NZ$1,243.4 million for the fiscal year ending June 30, 2011. PGG Wrightson Finance has been excluded from the Group results for 2011. Factoring in the revaluation of PGW's wool interests, supply contract provisions and other one-off and fair value adjustments totaling NZ$47 million, resulted in a net loss after tax of NZ$30.7 million.
Sir John Anderson, PGG Wrightson Chairman said while both the livestock and rural supplies businesses performed well and benefited from improved returns at the farmgate, the group results reflected the impact of extreme wet spring and summer conditions in Australia, the Canterbury earthquakes and a number of restructuring costs.
"We can take a number of positives out of the performance. The balance sheet is strengthened from the divestment of certain non core assets while the successful conclusion of the partial takeover by Agria provides certainty to the business moving forward.
"Further, we have worked to refocus the group on its key businesses across New Zealand, Australia and South America, ensuring the company has the right people in the right places, while reinforcing our reputation and brand in our core markets."
In the past 12 months PGG Wrightson sold its stake in NZ Farming Systems Uruguay (NZFSU) and NZ Merino. The settlement of NZFSU's performance and management fees and internalization of its management agreement saw parent bank debt reduced to NZ$124.5 million at June 30, 2011 compared to NZ$177.9 million at the end of fiscal 2010. The sale of NZ Merino for NZ$7.6 million was closed before the end of the fiscal year 2011.
Sale of PGG Wrightson Finance On June 13, 2011 a sale and purchase agreement was entered into between PGG Wrightson Limited and Heartland New Zealand Limited (Heartland) for the sale of all of the shares in PGG Wrightson Finance Limited (PWF) from PGG Wrightson Limited. This transaction is approaching the final approval stage and progress has been in line with the timetable between Heartland and PGG Wrightson. More details will be made available once the transaction is concluded.
Outlook George Gould, PGG Wrightson Managing Director said the results tell a story about a company that has taken stock of its position and moved on -- not just operationally, but also in the form of one off write downs and divesting from businesses such as Finance and merino where an ownership position is no longer a pre-requisite.
"We are refocusing on getting the basics right -- ensuring that we build on our leading brand and tap into the expertise that we've built up over more than 100 years of providing services and products to New Zealand and international farming businesses.
"Our focus in these results was about the performance of our core businesses, the ones that are the cornerstone of our business. But it is equally our aligned businesses -- and these include Real Estate, Irrigation and Pumping, Insurance, Agriculture New Zealand and Livestock Export that hold the potential for substantive growth in the coming years."
Mr. Gould said the company was also awake to the potential opportunities afforded by expanding our seeds business in core southern hemisphere markets such as Australia and Brazil, and in growth agricultural economies such as China.
The Board and Management of PGG Wrightson will continue to work towards the goal of long term profitability and sustainable returns on behalf of its shareholders and employees. While the company is conscious of volatility in the wake of the emerging global fiscal crisis, we are nevertheless planning for improved earnings for the coming financial year.
About Agria Corporation
Agria Corporation /quotes/zigman/487479/quotes/nls/gro GRO +7.84% is a China-based agriculture company with operations in China and internationally. In China, we engage in research and development, production and sale of seed products, including field corn seeds, edible corn seeds and vegetable seeds. We own through Agria Asia a 50.01% equity interest in PGW, New Zealand's largest agricultural services company. PGG Wrightson reported turnover of NZ$1.2 billion (US$1.0 billion) for the twelve months ended June 30, 2011. For more information about PGW, please visit www.pggwrightson.co.nz . For more information about Agria Corporation, please visit www.agriacorp.com .
Safe Harbor Statement: This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Agria may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about beliefs and expectations of Agria or PGW, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in Agria's filings with the U.S. Securities and Exchange Commission and those risks outlined in PGW's filing with the New Zealand Stock Exchange. All information provided in this press release is as of the date of this announcement unless otherwise stated, and Agria does not undertake any obligation to update any forward-looking statement, except as required under applicable law.