WUHAN CITY, China, Aug. 20, 2018 /PRNewswire/ -- Renmin Tianli Group, Inc. ABAC ("Renmin Tianli" or the "Company"), a producer of breeder hogs, market hogs and black hogs, as well as specialty processed black hog pork products sold through retail outlets and the internet, with headquarters in Wuhan City, Hubei Province, China, today announced its financial results for the three and six months ended June 30, 2018.

Mr. Luchang Zhou, Chief Executive Officer of Renmin Tianli, commented, "Despite a 20% increase in the number of hogs sold from our hog farming business, overall revenues decreased slightly during the second quarter primarily due to decreases in average selling prices for both hog farming and retail as well as a decline in retail sales volume. Overall margins and profitability also decreased on a year-over-year basis as the hog industry faced continued pricing pressure on the back of increased hog supply and sluggish consumer demand. However, we have seen an improving trend in hog prices since July and, if this trend continues, anticipate a gradual recovery in our business in the second half of the year."

Second Quarter 2018 Financial Results

 

For the second quarter of 2018, revenues decreased by $0.04 million, or 0.7%, to $6.18 million from $6.22 million for the same period of last year. The slight decrease in overall revenues was due to a decrease in revenues from black market hogs and specialty black hog pork products through retail, partially offset by increases in revenues from our regular breeder hog and regular market hog sales.

Revenues from hog farming, which includes sales of regular breeder hogs, regular market hogs, and black hogs, increased by $0.33 million, or 5.9%, to $5.89 million for the second quarter of 2018 from $5.56 million for the same period of last year. The Company sold a total of 38,599 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $153 per hog during the second quarter of 2018, compared to 32,179 hogs sold and a blended average selling price of $173 per hog for the same period of last year.

 

Revenues for the second quarter of 2018 from regular breeder hog sales increased by 20.8% to $1.00 million with the number of regular breeder hogs sold increasing by 13.8% to 3,806 hogs and the average selling price of regular breeder hogs increasing by 6.2% to $262 per hog. Revenues for the second quarter of 2018 from regular market hog sales increased by 13.4% to $2.93 million as the number of regular market hogs sold increased by 27.9% to 22,923 hogs while the average selling price of regular market hogs decreased by 11.3% to $128 per hog. Revenues for the second quarter of 2018 from black market hogs decreased by 8.9% to $1.96 million with the number of black hogs sold increasing by 8.8% to 11,870 hogs and the average selling price of black hogs decreasing by 16.3% to $165 per hog.

We sold 65,319 kilograms of specialty black hog pork products through retail at approximately $4 per kilogram, generating revenues of $0.29 million for the second quarter of 2018. This compared to138,123 kilograms sold at approximately $5 per kilogram and revenues of $0.66 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $2.25 million in revenues from our black hog program for the second quarter of 2018, compared to $2.81 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.60 million, or 11.2%, to $5.99 million for the second quarter of 2018 from $5.39 million for the same period of last year. Cost of goods sold for hog farming increased by $0.81 million, or 16.4%, to $5.77 million for the second quarter of 2018 from $4.95 million for the same period of last year. Cost of goods sold for retail decreased by $0.21 million, or 48.2%, to $0.23 million for the second quarter of 2018 from $0.44 million for the same period of last year.

Overall gross profit decreased by $0.65 million, or 77.5%, to $0.19 million for the second quarter of 2018 from $0.84 million for the same period of last year. This decrease in our gross profit was the result of a decrease in gross profit of $0.49 million, or 79.7%, for our hog farming segment, combined with a decrease in gross profit of $0.16 million, or 72.0%, for retail. Gross profit for hog farming and retail were $0.12 million and $0.06 million, respectively, for the second quarter of 2018, compared to $0.61 million and $0.23 million, respectively, for the same period of last year.

Overall gross margin was 3.0%, with gross margins for hog farming and retail of 2.1% and 21.8%, respectively, for the second quarter of 2018. This compared to overall gross margin of 13.4%, and gross margins for hog farming and retail of 11.0% and 34.1%, respectively, for the same period of last year.

Operating income (loss)

Total operating expenses, including general and administrative expenses and selling and marketing expenses, decreased by $0.16 million, or 19.9%, to $0.62 million for the second quarter of 2018 from $0.78 million for the same period of last year.

Operating loss was $0.44 million for the second quarter of 2018, compared to operating income of $0.06 million for the same period of last year. Operating loss margin for the second quarter of 2018 was 7.1%, compared to operating profit margin of 0.9% for the same period of last year.

Net Income (loss) and Earnings (Loss) Per Share

Net loss was $0.42 million, or a loss share of $0.052, for the second quarter of 2018, compared to net income of $0.06 million, or earnings per share of $0.008, for the same period of last year.

First Half 2018 Financial Results

For the first half of 2018, revenues increased by $0.50 million, or 3.9%, to $13.41 million from $12.90 million for the same period of last year. The increase in overall revenues was due to an increase in revenues from regular hog sales partially offset by a decrease in revenues from our black hog program.

Revenues from hog farming, which includes sales of regular breeder hogs, regular market hogs, and black hogs, increased by $1.02 million, or 8.9%, to $12.56 million for the first half of 2018 from $11.54 million for the same period of last year. The Company sold a total of 75,972 regular breeder hogs, regular market hogs and black hogs with a blended average selling price of $165 per hog during the first half of 2018, compared to 62,396 hogs sold and a blended average selling price of $185 per hog for the same period of last year.

 

Revenues for the first half of 2018 from regular breeder hog sales increased by 31.8% to $2.01 million with the number of regular breeder hogs sold increasing by 23.2% to 7,616 hogs and the average selling price of regular breeder hogs increasing by 7.0% to $264 per hog. Revenues for the first half of 2018 from regular market hog sales increased by 16.3% to $6.31 million as the number of regular market hogs sold increased by 30.3% to 45,231 hogs while the average selling price of regular market hogs decreased by 10.7% to $140 per hog. Revenues for the first half of 2018 from black market hogs decreased by 7.6% to $4.24 million with the number of black hogs sold increasing by 7.6% to 23,125 hogs and the average selling price of black hogs decreasing by 14.1% to $183 per hog.

We sold 172,790 kilograms of specialty black hog pork products through retail at approximately $5 per kilogram, generating revenues of $0.85 million for the first half of 2018. This compared to 274,804 kilograms sold at approximately $5 per kilogram and revenues of $1.37 million for the same period of last year. These revenues, combined with the sales of black market hogs, led to $5.09 million in revenues from our black hog program for the first half of 2018, compared to $5.95 million for the same period of last year.

Gross profit

Cost of goods sold increased by $0.92 million, or 8.3%, to $12.05 million for the first half of 2018 from $11.13 million for the same period of last year. Cost of goods sold for hog farming increased by $1.23 million, or 12.0%, to $11.44 million for the first half of 2018 from $10.22 million for the same period of last year. Cost of goods sold for retail decreased by $0.31 million, or 33.7%, to $0.61 million for the first half of 2018 from $0.91 million for the same period of last year.

Overall gross profit decreased by $0.42 million, or 23.4%, to $1.36 million for the first half of 2018 from $1.77 million for the same period of last year. This decrease in our gross profit was the result of a decrease in gross profit of $0.21 million, or 15.7%, for our hog farming segment and a decrease in gross profit of $0.21 million, or 45.8%, for retail. Gross profits for hog farming and retail were $1.11 million and $0.25 million, respectively, for the first half of 2018, compared to $1.32 million and $0.45 million, respectively, for the same period of last year.

Overall gross margin was 10.1%, with gross margins for hog farming and retail of 8.9% and 28.9%, respectively, for the first half of 2018. This compared to overall gross margin of 13.7%, and gross margins for hog farming and retail of 11.4% and 33.2%, respectively, for the same period of last year.

Operating income (loss)

Total operating expenses, including general and administrative expenses and selling and marketing expenses, increased by $0.07 million, or 3.9%, to $1.76 million for the first half of 2018 from $1.69 million for the same period of last year.

Operating loss was $0.40 million for the first half of 2018, compared to operating income of $0.08 million for the same period of last year. Operating loss margin for the first half of 2018 was 3.0%, compared to operating profit margin of 0.6% for the same period of last year.

Net Income (loss) and Earnings (Loss) Per Share

Net loss was $0.36 million, or a loss per share of $0.045, for the first half of 2018, compared to net income of $0.10 million, or earnings per share of $0.012, for the same period of last year.

Financial Condition

As of June 30, 2018, the Company had cash and cash equivalents of $62.86 million, compared to $62.64 million at the end of 2017. Working capital as of June 30, 2018 was $65.66 million as compared to $65.12 million at December 31, 2017. Net cash provided by operating activities for the six months ended June 30, 2018 was $1.00 million, compared to $2.64 million for the same period of last year.

Recent Developments

On April 30, 2018, the Company completed the acquisition of a 10% equity interest in Youyang County Jinzhu Forestry Development Co. Ltd. ("Jinzhu Forestry"), a bamboo cultivation and processing facility located in Youyang County, Chongqing, for a total consideration of RMB 18 million (approximately $2.8 million) and 2,000,000 shares of Renmin Tianli's common stock. Jinzhu Bamboo commenced operations in April 2016. It currently operates a bamboo plantation of approximately 3,853.5 mu (approximately 635 acres) on which it will construct a bamboo processing facility.

About Renmin Tianli Group, Inc.

Renmin Tianli Group, Inc. (the "Company"), previously known as Aoxin Tianli Group, Inc., is in the business of breeding, raising and selling breeder and market hogs in China. The Company also sells specialty processed black hog pork products through supermarkets and other retail outlets, as well as the internet.

Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:

Tony Tian, CFA

Weitian Group LLC

Phone: +1-732-910-9692

Email: ttian@weitianco.com

 

 

 

 

 

 

 

 

 

View original content:http://www.prnewswire.com/news-releases/renmin-tianli-group-inc-reports-unaudited-financial-results-for-the-second-quarter-2018-300699440.html

SOURCE Renmin Tianli Group, Inc.