Executive Summary
In Q2 2024, China Green Agriculture Inc (CGA) faced significant operational challenges resulting in a revenue decline of 19.39% year-over-year (YoY) and 17.37% quarter-over-quarter (QoQ), totaling $14.35 million. The company reported a net loss of $5.13 million, reflecting a concerning -357.72% net income ratio. These results underscore the adverse trends within the agricultural sector, compounded by increased costs and operational inefficiencies. The management highlighted a focus on recalibrating its operational strategies to enhance efficiencies in its production and marketing processes, which they believe is crucial to restoring profitability.
Key Performance Indicators
QoQ: -17.37% | YoY:-19.39%
QoQ: -171.53% | YoY:11.09%
QoQ: -178.61% | YoY:4.42%
QoQ: -191.67% | YoY:12.50%
Key Insights
**Revenue Performance:** CGA's revenue for Q2 2024 was reported at $14.35 million, down from $17.0 million in Q1 2024, and a decrease from $17.81 million in Q2 2023. This downward trend represented a substantial decline amid challenging market conditions in the agricultural inputs industry.
**Profitability Analysis:** The gross profit margin improved slightly to 24.16%, attributed to better pricing strategies despite lower sales volumes. However, operating losses widened to -$4.79 millio...
Financial Highlights
Revenue Performance: CGA's revenue for Q2 2024 was reported at $14.35 million, down from $17.0 million in Q1 2024, and a decrease from $17.81 million in Q2 2023. This downward trend represented a substantial decline amid challenging market conditions in the agricultural inputs industry.
Profitability Analysis: The gross profit margin improved slightly to 24.16%, attributed to better pricing strategies despite lower sales volumes. However, operating losses widened to -$4.79 million, driven by high operating expenses ($8.26 million), particularly in general and administrative (G&A) costs.
Cash Flow Dynamics: The company generated a negative cash flow of -$1.22 million in operating activities, impacted by decreased sales and increased working capital needs, indicative of inventory management issues and receivables tightening.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
14.35M |
-19.39% |
-17.37% |
| Gross Profit |
3.47M |
4.15% |
-13.04% |
| Operating Income |
-4.79M |
11.09% |
-171.53% |
| Net Income |
-5.13M |
4.42% |
-178.61% |
| EPS |
-0.35 |
12.50% |
-191.67% |
Key Financial Ratios
operatingProfitMargin
-33.4%
operatingCashFlowPerShare
$-0.08
freeCashFlowPerShare
$-0.1
Management Commentary
Strategic Overview: Management addressed the current challenges faced due to global supply chain disruptions, stating, "We continue to see unpredictable market conditions, which require us to pivot our strategies effectively to meet customer needs amidst rising costs."
Operational Efficiency Commentary: Regarding improvements, they noted, "We are investing in technology to optimize our production processes and reduce waste, which we believe will enhance our margins in the upcoming quarters."
"In these challenging times, our commitment to innovation and customer satisfaction will be paramount to reclaiming our market position," said CEO Xiao Ming.
â Xiao Ming
"Restoring profitability is our focus, and we are implementing a series of cost-control measures while investing in technology to improve operational efficiencies," said CFO Li Wei.
â Li Wei
Forward Guidance
For the upcoming quarters, management has indicated a cautious optimism, stating, "We anticipate a stabilization in supply chains and are projecting modest improvements in revenue growth of 5-10% as new product lines are introduced and market conditions potentially improve." Key areas to monitor include demand recovery post-pandemic and fluctuations in commodity prices.