GLG Life Tech widens Q1 loss on higher costs

15-May-2011 - Last updated on 16-May-2011 at 16:07 GMT

Related tags Stevia China

Stevia supplier GLG Life Tech has reported a wider loss in the first quarter of 2011 on higher costs, the company has said.

For the first quarter ended March 31, the company reported revenue of C$7.4m, down 10 percent on the same period last year. Net loss for the quarter was C$5.8m, or 20 cents per share, compared to C$1.4m, or 5 cents per share, a year earlier.

The company said that C$5.8m of revenue came from sales of its stevia extracts, 28 percent down on the same period last year. It said that this was largely due to lower prices for its RA 80 stevia extract, which were 25 percent lower year-on-year, although sales volumes were flat – and a 6 percent decrease in the US dollar/Canadian dollar exchange rate.

Meanwhile C$1.6m of the company’s revenues came from sales of consumer products through its new AN0C joint venture in China. AN0C launched its first six ready to drink teas in China in the last week of March. The company also expects to launch three juice drinks and three dairy drinks in China during 2011, it said.

Expenses related to sales, general and administrative costs nearly doubled to C$5.7m in the quarter, compared to Q1 2010.

GLG said it expects 2011 to be “a pivotal year for the company as it continues to grow its stevia business and launch its consumer products joint venture AN0C” and its expects its stevia business to grow 53 to 70 percent during the year compared to 2010, with the largest portion of that growth coming from China.

The company announced its joint venture with China Agriculture Health Foods Company in December 2010, to market products on the Chinese market under the brand Dr. Zhang’s All Natural and Zero Calorie (AN0C).

GLG also signed a five year supply agreement with Chinese company FXY in September last year, which includes a plan to supply sugar-stevia blends to the China Sugar Reserve.