Origin Agritech Limited (SEED) Reports FY11 Financial Results

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Origin Agritech Limited (NASDAQ: SEED) today announced unaudited financial results for the year ended September 30, 2011.

During the fiscal year 2011, the company generated revenues of RMB567.43 million (US$89.29 million), a slight decrease of 2.98% from September 30, 2010 with RMB584.86 million (US$87.28 million). This slight decrease was mainly due to lower production at our corn seeds production base in southern China, where a severe drought presented extreme difficulty for farming.

The decline in sales quantity in corn seeds was somewhat offset by a 17.25% price increase, netting a 2.92% year-over-year decrease in total hybrid corn seed revenues in fiscal 2011. Constrained capacity also limited economies of scales, hence impacting the gross margin for corn seeds.

Gross profit for the fiscal year ended September 30, 2011 were RMB195.84 million (US$30.82 million), compared with RMB231.27 million (US$34.51 million) during the previous fiscal year. The gross profit decline is mainly due to the decrease in the production of corn because of adverse weather in seed production area, the increase in the rental fee of farmer’s land, and the intense industry competition.

Income from operations for the year ended September 30, 2011 were RMB12.61 million (US$1.99 million), compared with the income from operations from September 30, 2010 of RMB64.32 million (US$9.60 million).

Net loss attributable to Origin for the fiscal year of 2011 was RMB 23.08 million (US$3.63 million) compared with a net profit attributable to Origin of RMB49.05 million (US$7.32 million) in the year ended September 30, 2010. Of note, this amount included the net loss from the liquidation of our investment of Jilin Changrong of RMB13.58 million (US$2.14 million).

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