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GLG reports H1 losses after filing delay

By Caroline Scott-Thomas , 20-Aug-2012

GLG reports H1 losses after filing delay

Stevia supplier GLG Life Tech has reported losses in the 2011 fiscal year and the first half of 2012, following a filing delay that led it to stop trading on the Toronto Stock Exchange.

GLG Life Tech received a full cease trade order from the British Columbia Securities Commission in early May, as the company said the reporting of its year-end financial statements was delayed due to a requirement to obtain further audit evidence, primarily from third parties. GLG stressed at that time that auditors had not found evidence of any wrongdoing at the company.

Last week, the company reported a net loss of C$90.5m for the year ended December 31, 2011, compared to a net loss of C$3.1m during 2010. Revenue fell 58% during the year, from C$58.9m to C$24.8m.

For the first quarter of fiscal 2012 ended March 31, GLG reported a net loss of C$6.2m compared to net loss of C$5.8m in the prior year period, while revenue slumped 88% from C$7.4m to C$0.9m. For the second quarter ended June 30, the company had a net loss of C$8.3m compared to a net loss of C$12.5m a year earlier. Revenue in the second quarter was down 56%, from C$15.2m to C$6.8m.

Only two of the company’s manufacturing facilities were operating in the first six months of the year, and incurred capacity charges of C$3m, it said.

Despite the losses, GLG Life Tech said it expects its gross profit margins to improve as its latest generation stevia leaf (Huinong 3, or H3) comes into use in the second half of 2012.

“H3 is expected to deliver reduced stevia leaf processing costs starting in the fourth quarter 2012,” the company said. “The H3 plant variety have approximately 76% RA [rebaudioside A] in the plant leaf, which is 26% higher than the first generation (H1) seeds, and will generate 46% more leaf per acre than the earlier H1 plants as well.”

In an email accompanying its financial statements, a company spokesperson said: We do not anticipate a lengthy delay until our shares will resume trading on the TSX.”

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