VANCOUVER, Nov. 30 /CNW/ - IND DairyTech Limited (TSXV 'IND', formerly China One Corporation) ("IND" or the "Company") today announced financial results for the quarter ended September 30, 2009. The unaudited consolidated interim financial statements along with management's discussion and analysis have been filed with SEDAR.
Revenue for the quarter was $4,773,160 compared to $682,466 in the third quarter of 2008. Net loss for the quarter was $288,564 or $0.003 per share as compared to a loss of $629,246 or $0.013 per share in the second quarter of 2008. Revenue in the quarter includes $1,601,816 from milk sales $3,160,990 from cow sales and $10,354 from semen sales.
During the third quarter of 2009, the milk revenue increased to $1.6 million from $1.0 million in the last quarter. The gross margin of milk sales is also steadily improving due to the higher raw milk price and increasing volume of production. The management expects continuous milk revenue growth in the quarters going forward. The Company also delivered 1,057 cows to Yili Group, realizing $3.2 million revenue. By the end of the third quarter, the Company had a herd size of 11,379, compared to 7,008 at the prior year end.
During October 2009, the Company signed up additional co-operation farms to continue its expansion plan throughout China. The Company, through its Chinese subsidiary, also signed two joint ventures with local partners to develop two farms (the "JV Farms") in Jiangsu and Sichuan provinces. The Company owns 70% equity interest of both joint ventures. Including the planned herd capacities of the new co-operation farms and the JV Farms, the Company is expected to control a herd capacity of up to 60,000 spread over nine provinces in China. The management will continue the Company's expansion plan, aiming to become one of the largest independent farm management companies in China.
As previously announced, the Company has entered into an agreement in principle with SAIF Partners III L.P. ("SAIF") under which SAIF is expected to purchase on a private placement basis up to 59,661,014 Series A Preferred Shares of the Company ("Preferred Shares") at a weighted average price of approximately CAN$0.52 per Preferred Share for aggregate consideration of up to approximately CAN$30.8 million (RMB 200 million) (the "Placement"). The Placement will be closed in two tranches with ratchet provisions based on a performance criteria. For further details, please refer to the Company's news release on November 19, 2009, which is available on SEDAR at www.sedar.com. The Placement is subject to completion of standard technical, legal and financial due diligence and the negotiation and entering into of definitive documentation and receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
In November 2009, IND's subsidiary, IND Lifetech Group Ltd. ("IND Lifetech") entered into an agreement to form a joint venture company with Shanghai KP Technology Investment Development LLC ("Shanghai KP") pursuant to which IND's Chinese subsidiary, IND Lifetech (China) Co., Ltd. ("IND China") will issue to Shanghai KP 2.39% of the total equity interest in IND China at a premium price of RMB 5 million (approximately $781,250) to be paid in cash. This joint venture agreement is subject to TSX Venture Exchange approval. IND Lifetech currently holds 100% of the equity interest in IND China. IND Lifetech also has the option to repurchase Shanghai KP's interest in IND China at the same price if certain objectives of IND China are not achieved. Shanghai KP is controlled by Mr. Shulin Sun, a director of IND. It is expected that Mr. Sun will be appointed as a senior officer of IND China and will no longer be considered an independent director of IND.
ABOUT IND DAIRYTECH LIMITED
IND, through its operating subsidiaries, is an emerging raw milk producer in China that is seeking to become a leading provider of high quality raw milk to the Chinese dairy industry. To meet China's increasing demand for dairy products, the Company is using Canadian cattle genetics and North American farming practices to establish and develop its dairy herd in China.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION AND NON-GAAP MEASURES
Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to milk revenue growth going forward, the expected herd capacity of the farms controlled by IND, the expansion plans of IND, the private placement of preferred shares, and the joint venture with Shanghai KP, as well as information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release describes the Company's expectations as of the date of this news release. Material factors or risks which could cause actual results or events to differ materially from a conclusion in such forward-looking information include the risk that milk revenues do not continue to growth or may even contract, the herd capacity of the farms may be lower than expected, the expansion plans may need to be revised or halted, the private placement of preferred share may not complete or may be completed on revised terms, and the joint venture with Shanghai KP may not complete or may be completed on revised terms, as well as the risks set out in the risk factors section of IND's Management's Discussion and Analysis for the year ended December 31, 2008 and for the six-month period ended June 30, 2009, and IND's press releases issued subsequent thereto, all filed with Canadian securities regulators and available on SEDAR at www.sedar.com.
IND has also included in this news release certain figures, such as gross margin figures, which are non-GAAP measures. Readers are cautioned that such measures are not recognized under Canadian GAAP and should not be construed to be an indicator of performance or liquidity or cash flows. IND's method of calculating this measure may differ from the method used by other entities and accordingly IND's measure may not be comparable to the measure used by other entities.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE PRESENTS THE EXPECTATIONS OF IND AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE IND MAY ELECT TO, IND DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.
SOURCE IND DAIRYTECH LIMITED
For further information: For further information: Jesse Zhu, Chief Executive Officer, IND DairyTech Limited, (604) 522-1619, email@example.com; James Xiang, Chief Financial Officer, IND DairyTech Limited, (416) 886-1261, firstname.lastname@example.org