26th Feb 2014 11:14
LONDON (Alliance News) - Citrus fruits producer Asian Citrus Holdings Ltd Wednesday said its swung to a huge loss in the first-half of its financial year, as revenues fell by 16% and it was hit by a poor winter harvest and lower selling prices.
For the six months to the end of December 2013, the group swung to a pretax loss of RMB543,7 million, compared with a profit of RMB124.7 million for the period a year earlier, due to a poor winter orange crop production which was hit by "persistent heavy rainfall," which in turn also meant it had to use more fertilisers and pesticides in its plantations due to the bad weather. Its net loss for the period was RMB548.0 million.
Revenues dropped by 16% to RMB748.3 million, down from RMB892.0 million a year earlier, it said, as total orange production declined 8.3% to 147,927 tonnes, due to the replanting programme at its Hepu Plantation as well the bad weather conditions. Its Xinfeng plantation contributed to just over 50% of total revenue, down slightly on the previous year, while slightly higher sales came from its processed fruit during the period, as orange production declined.
The China-based orange plantation operator already issued a profit warning at the end of January, warning that first-half revenues and profits would be lower than in the previous year due to a poor harvest and lower selling prices for the crop.
"In order to maintain production volume, a higher level of direct costs is expected to be incurred in the short term to alleviate the leaching of soil nutrients caused by the heavy rainfall. Given the poor first half year results and these ongoing costs, the board has decided not to pay an interim dividend. The board will consider its recommendation for a final dividend in light of the Group's full year performance," the company said in a statement.
Chairman Tony Tong said it is too early to say whether these factors will also affect its full-year result, because the situation may be different for its summer orange crop in the second-half of the year.
"The second half year will reflect the price achieved for the group's summer orange crop and the impact of weather on the volume of fertilisers and pesticides used," he said.
Shares in Asian Citrus Holdings were down 5.8% at 13.90 pence per share Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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