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Wall Street JournalChina Green Agriculture, Inc. Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2024
China Green Agriculture, Inc. Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2024
China Green Agriculture, Inc. has reported a net loss of $1.4 million for the quarter ended March 31, 2024, compared to a net loss of $1.2 million for the same period in 2023. The company’s total assets increased to $14.8 million from $13.7 million, while total liabilities increased to $1.6 million from $1.5 million. The company’s cash and cash equivalents decreased to $1.2 million from $1.3 million. The company’s revenue for the quarter was $0.4 million, compared to $0.3 million for the same period in 2023.
Overview
The company is primarily engaged in producing and selling fertilizer products in China and the United States. It operates four main business segments:
- Jinong - produces humic acid fertilizers in China
- Gufeng - produces compound and blended fertilizers in China
- Yuxing - develops agricultural products like fruits and vegetables in China
- Antaeus - mines Bitcoin in the United States
In the most recent quarter, fertilizer products generated 88.6% of total revenue. Agricultural products generated 9.9% of revenue, while Bitcoin mining generated 1.5% of revenue.
Recent Developments
- Jinong launched 4 new fertilizer products but eliminated 66 unqualified distributors in the most recent quarter
- Gufeng did not launch any new products or add any new distributors
Financial Performance
| Key Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue | $32.9 million | $45.3 million | -27.2% |
| Net Loss | $10.9 million | $0.2 million | -5849.5% |
- Revenue decreased mainly due to lower fertilizer sales volume
- Net loss increased significantly due to lower sales and much higher general and administrative expenses
Segment Performance
| Segment | Q3 2024 Net Income | Q3 2023 Net Income | Explanation |
|---|---|---|---|
| Jinong | $(3.5) million | $(2.2) million | Lower sales, higher expenses |
| Gufeng | $(10.6) million | $0.1 million | Much lower sales, higher expenses |
| Yuxing | $(0.9) million | $0.6 million | Lower sales, higher expenses |
| Antaeus | $(0.04) million | N/A | Startup costs |
- All segments showed declines in profitability compared to prior year quarter
- Gufeng performed the worst with a large net loss due to product quality issues
Liquidity
- Cash balance declined 13% from June 2023 to $61.6 million
- Company believes it has sufficient resources to fund operations for next 12 months
- May raise additional capital if needed to pursue acquisitions or other growth
Accounts Receivable
- Accounts receivable declined 9% from June 2023
- Allowance for doubtful accounts was 78% of receivables, up from 77%
Inventories
- Total inventories declined 21% from June 2023, mostly due to 52% drop in Gufeng inventories
- Company recorded $4 million inventory impairment loss in recent quarter
Outlook
The fertilizer business continues facing challenges like product quality concerns and reduced customer demand. However, the company is taking steps to align itself with sustainable practices by shifting more production to liquid fertilizers. It is also expanding into new areas like Bitcoin mining to diversify revenue streams. While the near-term outlook remains muted, the company believes it has sufficient resources to continue funding operations and future strategic growth initiatives.