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Le Gaga Third Quarter FY 2011 Earnings Release

HONG KONG, Feb. 22, 2011 (GLOBE NEWSWIRE) -- 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 third fiscal quarter ended December 31, 2010. 1

Highlights of the Quarter Ended December 31, 2010

  • Revenue increased by RMB 33.5 million, or 45.6%, from RMB 73.4 million for the three months ended December 31, 2009 to RMB 106.9 million (US $16.2 million) for the three months ended December 31, 2010.  
  • Results from operating activities increased by RMB 25.9 million, or 136.3%, from RMB 19.0 million for the three months ended December 31, 2009 to RMB 44.9 million (US $6.8 million) for the three months ended December 31, 2010.  
  • Profit for the period increased by RMB 26.1 million, or 138.1%, from RMB 18.9 million for the three months ended December 31, 2009 to RMB 45.0 million (US $6.8 million) for the three months ended December 31, 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 14.3 million, or 52.0%, from RMB 27.5 million for the three months ended December 31, 2009 to RMB 41.8 million (US $6.3 million) for the three months ended December 31, 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 (costs), income tax expense, depreciation and amortization), as further adjusted to exclude the effects of non-cash share-based compensation, the net impact of biological assets fair value adjustment and the initial public offering expenses charged to the income statement) increased by RMB 17.0 million, or 45.5%, from RMB 37.4 million for the three months ended December 31, 2009 to RMB 54.4 million (US $8.2 million) for the three months ended December 31, 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 2.09 (0.32 US cents) and 2.01 cents (0.30 US cents), respectively, for the three months ended December 31, 2010, representing an increase of 85.0% and 81.1%, respectively, from those in the three months ended December 31, 2009.  
  • Basic and diluted earnings per ADS 2 was RMB 104.5 (15.83 US cents) and 100.5 cents (15.23 US cents), respectively, for the three months ended December 31, 2010, representing an increase of 85.0% and 81.1%, respectively, from those in the three months ended December 31, 2009.  
  • Cash generated from operating activities decreased by RMB 24.2 million, or 92.4%, from RMB 26.2 million for the three months ended December 31, 2009 to RMB 2.0 million (US $308,000) for the three months ended December 31, 2010.  
  • Total arable land as of December 31, 2010 was 20,047 mu (1,337 hectare), increased by 1,197 mu, as compared to September 30, 2010, and increased by 1,201 mu, as compared to December 31, 2009.  
  • Total greenhouse area as of December 31, 2010 was 5,339 mu (356 hectare), representing an increase of 432 mu compared to September 30, 2010 and an increase of 482 mu compared to December 31, 2009. As a result, greenhouse land area as a percentage of total arable land increased from 26.0% as of September 30, 2010 to 26.6% as of December 31, 2010.  
  • Production output increased 34.8% from 23,977 metric tons for the three months ended December 31, 2009 to 32,318 metric tons for the three months ended December 31, 2010. Production yield (production output per mu) increased 30.8% from 1.3 metric tons for the three months ended December 31, 2009 to 1.7 metric tons per mu for the three months ended December 31, 2010.   
  • Revenue-per-mu increased 49.7% from RMB 3,851 for the three months ended December 31, 2009 to RMB 5,764 for the three months ended December 31, 2010.

Mr. Shing Yung Ma, chairman and chief executive officer of Le Gaga, commented, "We are very pleased with our performance in the third fiscal quarter as we achieved record total revenue, adjusted profit and revenue-per-mu. Our greenhouse vegetable cultivation business model and cultivation know-how continue to deliver strong results. Since our IPO, we have continued to focus on our greenhouse and arable land expansion. We will continue to invest in research and development to enhance our cultivation know-how as well as in the development of our sales, marketing and distribution network. Furthermore, training and development of our farm managers remains an investment priority for us." Mr. Auke Cnossen, chief financial officer of Le Gaga, added, "Our greenhouse business model serves us well in the current operating environment. Our greenhouses allow us to produce during the winter and capture the higher selling prices during this season. We also benefit from better quality produce as a result of a better growing environment and stronger protection of our produce against the elements in the greenhouses. Expansion of our greenhouse coverage means higher production yield and revenue-per-mu. Higher greenhouse coverage also means more efficient use of production inputs such as fertilizers, seeds, water and labor and lower fixed production costs such as land rental and farm overhead as a percentage of revenue."

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