Shengtai Pharmaceutical (SGTI) Posts FY 2011 Financial Results

Shengtai Pharmaceutical Inc., a manufacturer and distributor in China of glucose and starch as pharmaceutical raw materials and other starch and glucose products, today reported its financial results for the 12 months ended June 30, 2011.

Sales revenue for fiscal 2011 was $171.7 million, a 48 percent increase compared to full-year 2010. The company attributes the increase to ramped-up sales volume and average selling prices. Export sales increased 60 percent as a result of an uptick in the global economy combined with the company’s reorganization of its exporting department and high product demand.

Costs of sales for the year ended June 30, 2011, was $148.5 million, up 51 percent over the comparable 12 months of 2010.

Gross profit for the year ended June 30, 2011, increased 30 percent to $23.1 million compared with $17.6 million the same period in 2010. For fiscal 2011, gross profit margin was 13 percent, a decrease from 15 percent reported for the same period in 2010.

Shengtai Pharmaceutical reported net income for fiscal year 2011 at $7.6 million, or $0.80 per share, a 139 percent increase over net income of $3.1 million, or $0.33 per share, reported for the same period in 2010.

The company posted net cash provided by operating activities at $5.0 million, a 47 percent decrease compared to $9.5 million for 2010.

Qingtai Liu, CEO of Shengtai Pharmaceutical, said domestic and international sales both increased to improved figures, as did strong customer demand and increased corn storage.

“Customer deposit also increased which shows a strong customer demand for our products. We also successfully expanded our corn storage from 36,000 tons 50,000 tons and our cornstarch annual production capacity from 300,000 tons to 400,000 tons,” Liu stated in the press release. “The storage expansion allowed us to lock in raw material prices by storing more raw material while the raw material prices are increasing. The expansion of cornstarch production line allows us to produce more cornstarch and related products to meet the increased demand for our cornstarch and related products, and provide more cornstarch as raw material for our glucose production.”

Moving forward, Liu said the company will focus on continuing the improvements with competitive pricing and customer satisfaction, among other initiatives.

“Most importantly, our company will take a few steps to keep our gross profit stable. We will continue to store more raw material corn inventory when the corn prices are increasing. At the same time, we will enhance our sales policy in monitoring pricing,” Liu stated.

For more information visit www.shengtaipharmaceutical.com

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