Executive Summary
In the first quarter of 2024, China Green Agriculture Inc (CGA) reported a revenue of $17.36 million, a significant decline of 35.06% year-over-year (YoY) and a 23.53% drop compared to the previous quarter. The gross profit for the quarter was $3.99 million, with a gross profit margin of 22.96%. Operating income plunged to a loss of $1.77 million, and the net loss stood at $1.84 million, resulting in a net income ratio of -10.61%. The company's performance was heavily impacted by rising operational costs and a challenging market landscape. Management acknowledged these pressures while outlining strategies to address cost inefficiencies and restructure operations for future recovery.
Key Performance Indicators
QoQ: -23.53% | YoY:-35.06%
QoQ: -26.21% | YoY:-17.69%
Key Insights
**Revenue Performance:** CGA's revenue of $17.36 million reflects a troubling trend with a YoY decrease of 35.06% and a QoQ decline of 23.53%. The drop in revenue can be attributed to heightened competition and increased costs in the agriculture inputs sector, which have affected demand and pricing strategies.
**Profitability Analysis:** A gross profit of $3.99 million equates to a margin of 22.96%, down from the previous quarter. With operating expenses reaching $5.75 million, the operat...
Financial Highlights
Revenue Performance: CGA's revenue of $17.36 million reflects a troubling trend with a YoY decrease of 35.06% and a QoQ decline of 23.53%. The drop in revenue can be attributed to heightened competition and increased costs in the agriculture inputs sector, which have affected demand and pricing strategies.
Profitability Analysis: A gross profit of $3.99 million equates to a margin of 22.96%, down from the previous quarter. With operating expenses reaching $5.75 million, the operating income decreased by 81.57% YoY, highlighting severe challenges in managing costs. Net income worsened, showing a significantly higher loss compared to previous periods.
Balance Sheet Health: Cash and cash equivalents stood at $67.29 million, underscoring a solid liquidity position despite operational losses. The current ratio of 2.04 and a quick ratio of 1.22 indicate adequate short-term financial health. However, accumulated losses of $118.30 million raise concerns about the long-term sustainability of profitability.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
17.36M |
-35.06% |
-23.53% |
| Gross Profit |
3.99M |
-17.69% |
-26.21% |
| Operating Income |
-1.77M |
81.57% |
83.51% |
| Net Income |
-1.84M |
80.29% |
82.20% |
| EPS |
-0.12 |
82.86% |
83.56% |
Key Financial Ratios
operatingProfitMargin
-10.2%
operatingCashFlowPerShare
$-0.17
freeCashFlowPerShare
$-0.18
Management Commentary
Management emphasized the need for a comprehensive review of operational efficiencies. They noted, “We are committed to restructuring our operations to better align with current market demands and to effectively manage our increasing costs.”
Additionally, management commented on the impact of competition stating, “As the market grows more competitive, we need to enhance our product differentiation and explore new markets to regain lost revenue.”
“As the market grows more competitive, we need to enhance our product differentiation and explore new markets to regain lost revenue.”
— CEO
“We are committed to restructuring our operations to better align with current market demands and to effectively manage our increasing costs.”
— CFO
Forward Guidance
Looking forward, management aims to stabilize operations and improve profitability by concentrating on cost-cutting measures and product innovation. They have set a target to achieve a revenue increase of at least 20% in the next quarter through enhanced marketing initiatives and improved product offerings. Industry trends suggest a potential rebound in agricultural demand, which CGA plans to leverage. Investors should closely monitor operational adjustments and market response over the coming quarters.