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Le Gaga Second Quarter FY 2011 Earnings Release

HONG KONG, Nov. 29, 2010 (GLOBE NEWSWIRE) -- HONG KONG, November 29, 2010 - Le Gaga Holdings Limited (Nasdaq:GAGA) ("Le Gaga" or "the Company"), one of the largest greenhouse vegetable producers in China as measured by the area of greenhouse coverage and one of the fastest growing major vegetable producers in China, today announced its financial results for the second fiscal quarter ended September 30, 2010. [1]

Highlights of the Quarter Ended September 30, 2010

  • Revenue increased by RMB 29.5 million, or 44.8%, from RMB 65.8 million for the three months ended September 30, 2009 to RMB 95.3 million (US$14.2 million) for the three months ended September 30, 2010.
  • Results from operating activities decreased by RMB 17.0 million, or 27.1%, from RMB 62.7 million for the three months ended September 30, 2009 to RMB 45.7 million (US$6.8 million) for the three months ended September 30, 2010.
  • Profit for the period decreased by RMB 15.8 million, or 25.3%, from RMB 62.4 million for the three months ended September 30, 2009 to RMB 46.6 million (US$7.0 million) for the three months ended September 30, 2010.
  • Adjusted profit for the period (Non-IFRS measure, defined as profit for the period before the net impact of biological assets fair value adjustments and excluding the effects of non-cash share-based compensation and the initial public offering expenses charged to the income statement) increased by RMB 12.1 million, or 45.3%, from RMB 26.7 million for the three months ended September 30, 2009 to RMB 38.8 million (US$5.8 million) for the three months ended September 30, 2010. A reconciliation of the adjusted profit for the period to profit for the period determined in accordance with IFRS was set forth in Appendix V.
  • Adjusted EBITDA (Non-IFRS measure, defined as EBITDA (earnings before net finance income (expense), income tax expense (benefit), depreciation and amortization), as further adjusted to exclude the effects of non-cash share-based compensation, the net impact of biological assets fair value adjustments and the initial public offering expenses charged to the income statement) increased by RMB 14.0 million, or 39.8%, from RMB 35.0 million for the three months ended September 30, 2009 to RMB 49.0 million (US$7.3 million) for the three months ended September 30, 2010. A reconciliation of the adjusted EBITDA to profit for the period determined in accordance with IFRS was set forth in Appendix VI.
  • Basic and diluted earnings per share was RMB 2.59 and 2.56 cents, respectively, for the three months ended September 30, 2010, representing a decrease of 30.4%, in each case, from the three months ended September 30, 2009.
  • Basic and diluted earnings per ADS [2] was RMB 129.5 and 128.0 cents, respectively, for the three months ended September 30, 2010, representing a decrease of 30.4%, in each case, from the three months ended September 30, 2009.
  • Cash generated from operating activities increased by RMB 2.9 million, or 7.9%, from RMB 37.5 million for the three months ended September 30, 2009 to RMB 40.4 million (US$6.0 million) for the three months ended September 30, 2010.
  • Total arable land as of September 30, 2010 remained the same at 18,850 mu (1,257 hectares) as compared to June 30, 2010, and increased by approximately 600 mu, as compared to September 30, 2009. 
  • Total greenhouse area as of September 30, 2010 was 4,907 mu (327 hectares), representing an increase of 966 mu compared to June 30, 2010 and an increase of 861 mu compared to September 30, 2009. As a result, greenhouse land area as a percentage of total arable land increased from 20.9% as of June 30, 2010 to 26.0% as of September 30, 2010.
  • Production output increased 39.6% from 22,971 metric tons for the three months ended September 30, 2009 to 32,064 metric tons for the three months ended September 30, 2010. Production yield (production output per mu) increased 31.7% from 1.3 metric tons for the three months ended September 30, 2009 to 1.7 metric tons per mu for the three months ended September 30, 2010. 
  • Revenue per mu increased 36.3% from RMB 3,701 for the three months ended September 30, 2009 to RMB 5,046 for the three months ended September 30, 2010.

Mr. Shing Yung Ma, chairman and chief executive officer of Le Gaga, commented, "We are very pleased with our performance in the second fiscal quarter as we achieved record total revenue, adjusted profit, revenue per mu and adjusted profit per mu. Our strong revenue growth and operational performance in the second fiscal quarter demonstrates the strength of our greenhouse vegetable cultivation business model and strong cultivation know-how." Mr. Ma further commented, "Our revenue growth was a direct result of our expanding greenhouse area, improving cultivation know-how, and ability to leverage our comprehensive information database. Following our successful IPO on the NASDAQ, we have continued to strengthen our brand and recognition among our customers and provide more high quality and safe vegetables to an increasing number of consumers. Going forward, we will continue to focus on expanding our greenhouse coverage and arable land area, invest in research and development to enhance our cultivation know-how, expand our sales, marketing and distribution network, strengthen our brand awareness across all of our sales channels and invest in the development of our farm managers." Mr. Auke Cnossen, chief financial officer of Le Gaga, added, "As demonstrated by our solid financial performance this quarter, we are excited about the large growth opportunities ahead of us. With our solid cash on hand and strong operating cash flows, we are confident that we have enough capital to execute our expansion plans. We will continue to expand our greenhouse area in Fujian and Guangdong Provinces while expanding our sales and distribution into the Yang Tze River Delta. We are on track to add the required greenhouse area and arable land to achieve our revenue and profit growth targets."

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