FEED - Revenues Go Hog Wild
March 9, 2010 by World Market Media
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AgFeed Industries Inc. (NASDAQ: FEED), one of the largest independent hog production and animal nutrient companies in China, today announced record levels of revenue in both of its operating units: hog production and animal nutrition.
Financial Highlights for 2009
- Record revenue of $173.2M, a 20% increase over 2008
- Production of 680,000 hogs and 117,000 tons of feed, a 66% and 56% increase respectively
- All of this resulted in operating earnings of $0.31/share
These are some huge numbers considering the difficult operating and market environment for hogs in China. This past year hog prices hit a three-year low in China and FEED was still able to put up record numbers.
The company is well positioned to become a major player in both the animal nutrition and hog production industry. According to China Research & Intelligence, there were 13,600 feed enterprises in China in 2008. Based on the data and trends provided by this research it is believe that today the number of feed enterprises has fallen to approximately 10,000.
This consolidation bodes well for FEED according to Dr. Li, chairman of the company; he says “As this consolidation continues, we will continue to use our technical superiority and innovative marketing model to increase our market position.”
FEED has also positioned itself well for future sow production, they are working with Hypor on animal genetics and by 2011 they believe they will have birthrates around 18.2 when the average birth rate of sows in China is 16.
They also expect an increase in sow base for 2011 which according to the president of the hog division could allow for the production of 1,250,000 hogs by 2011.
The company did a great job in 2009 and management sees that trend continuing the next few years, they definitely have the pieces in place.
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