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2016-03-31

Sino Agro Food: Sino Agro Food Inc. Reports FY 2015 Audited Results

Revenue Increases 6% to USD 429.1M with EPS of USD 3.60

March 30, 2016

GUANGZHOU, China-- Sino Agro Food, Inc. (OTCQX: SIAF | OSE: SIAF-ME).

The Company achieved the following annual results, comparing 2015 to
2014:

+----------------------------------------------+-----------+------------+---------+
|(USDm, except per share and margin data) | FY '15| FY '14|% |
+----------------------------------------------+-----------+------------+---------+
|Revenue | 429.1| 404.3| 6%|
+----------------------------------------------+-----------+------------+---------+
|Gross Profit | 111.2| 129.3| -14%|
+----------------------------------------------+-----------+------------+---------+
|Gross Profit Margin | 25.0%| 32.0%| |
+----------------------------------------------+-----------+------------+---------+
|Net Income | 91.8| 114,2| -19%|
+----------------------------------------------+-----------+------------+---------+
|Net Income attributable to SIAF | 66.4| 92.0| -28%|
+----------------------------------------------+-----------+------------+---------+
|Earnings Per Share (USD) - fully diluted | 3.60| 5.53| -35%|
+----------------------------------------------+-----------+------------+---------+
|Diluted weighted average number of shares (M)| 18.6| 16.7| 11%|
+----------------------------------------------+-----------+------------+---------+

Key Points

Revenue for 2015 increased by 6 percent to USD 429.1M (404.3). Revenue
from the sale of goods increased by 4.4 percent to USD 338.7M
(324.2). Revenue from project development and management fees
increased by 13.0 percent to USD 90.4M (80.1).

Stockholders' equity increased by 21 percent to USD 483.5M (399.6) or
USD 24.66 per share, based on the weighted average number of fully
diluted outstanding shares in the year, an increase of USD 83.9M or
USD 4.52 per share in 2015.

· Aquaculture revenue from the sale of goods decreased by 19 percent
to USD 87.3M (107.3). The decrease was mainly due to lower sales of
eels (-44%) and sleepy cod (-83%) only partially offset by an
increase in prawn sales (50%). Despite higher overall production
volume with annual seafood production of 6,762 MT, revenue decreased
due to a sales mix with a lower share of eels which demand a higher
price per kilo than prawns.

· Aquaculture revenue from project development increased by 15
percent to USD 86.6M (75.2). Construction and development work done
on the Zhongshan MegaFarm totaled USD 65.4M.

· Integrated Cattle Farm sale of goods increased by 44 percent to
USD 144.6M (102.0). Mainly due to increased imported beef, deboning
activity accounted for 104% of the increase, jumping to USD 57.6M
(13.2). Revenue from live cattle increased by 3% to USD 64.9M (63.1)
due to the sale of 21% more head of cattle offset by average prices
falling $308 per head, from RMB 32/Kg in 2014 to RMB 24/Kg in 2015.
Prices averaged RMB 20/Kg. in the fourth quarter of 2015.

Gross profit for 2015 decreased 14 percent to USD 111.2M (129.3),
equivalent to a margin of 25.0% (32.0%). The group gross profit and
margin were impacted by the following segments, in falling order:

· Aquaculture gross profit from the sale of goods decreased by 34
percent to USD 20.1M (30.4) equivalent to a margin of 23.1 percent
(28.3%). The reduction in margin was mainly due to a drop in eel
margins caused by lower quality supply of eel elvers forcing sales of
smaller grown-out eels. Secondarily, the sales mix included a higher
portion of lower margin mixed seafood. The Company aims to grow
aquaculture profits by increasing volumes and by stocking the more
profitable species, according to the prevailing supplies and market
prices.

· Gross profit for product development decreased by 14 percent to
USD 33.3M equivalent to a margin of 36.9 percent (44.8%). The
Zhongshan MegaFarm derives lower margins than earlier fish farms, due
to larger scale.

· Within the Integrated Cattle Farm business segment, overall gross
profit increased by 8 percent to USD 33.3M (30.8) equivalent to a
margin of 23.0 percent (30.2%), mainly due to an increase of 191
percent to USD 15.1M (3.9) in value added processing of local and
imported beef. However, the gross profit from the sale of live cattle
decreased by 43.8 percent to USD 9.3M (16.3), equivalent to a margin
of 14.1 percent (25.6%), due to deteriorating prices for standard
domestic beef.

· Seafood and Meat Trading gross profit decreased by 66% to USD 4.7M
(14.0) equivalent to a margin of 12.5% (27.5%). The margin
contraction is due to a different sales mix with higher share of
Australian beef imports sold with lower margin. Actions have been
taken to diversify to other seafood import sources and increase
volumes in addition to beef imports. Gross profit for imported beef
increased 89.2 percent to USD 3.1M (1.7).

· Fourth quarter Gross profit from Seafood and Meat Trading
decreased by 88% percent to USD 1.2M (9.7) equivalent to a margin of
11.1% (65.4%). The Import / Export segment decrease explains 97% of
the group's gross profit decrease in the fourth quarter.

G&A expenses increased by 19 percent to USD 18.6M (15.6) in 2015,
representing 5.5 percent (4.8%) of revenue. The increase reflects
ongoing heightened expenses related to various corporate exercises
including listing costs.

As of December 31 2015, the Company had unrestricted cash and cash
equivalents of USD 7.23M (3.03) and net working capital of USD 322.4M
(229.4). Current liabilities decreased from USD 52.3M at year-end
2014 to USD 28.4M at year-end 2015.

As of December 31, 2015, the outstanding common share count was
20,133,757, versus 17,162,716 at December 31, 2014. Of the 2,971,041
shares added, 707,077 were issued upon conversion of outstanding
preferred shares, and 1,888,304 were issued as security for trade and
other loans. These collateralized shares will be returned to the
treasury upon loan repayment. Net of these shares and others to
adjust and correct the total after the reverse split exercise, the
outstanding share count increased less than .9 percent in 2015.

Outlook and Subsequent Events

The Company anticipates improved gross profits and margins in 2016 by
scaling existing operations and from newly built facilities
initiating production:

· Continue to grow beef imports and utilize more available
processing capacity at Sanjiang A Power Agriculture Co., Ltd.
("SJAP). Continue to upgrade the herd of live cattle to 550-day grain
fed and Wagyu Simmental and Charolais cattle in order to expand
profit margins.

· Drive incremental aquaculture sale of goods through current and
new A Power Module capacity at the Zhongshan MegaFarm.

· Utilize the credit trade facility and existing capacity at the
Shanghai Distribution Center to increase volumes of imported beef.

The Company has achieved several significant corporate and divisional
milestones already in 2016

· On January 13ththe Company's shares commenced trading on the Oslo
Bors' Merkur Market.

· On January 19ththe Company's shares commenced trading on OTCQX
Premier, upgrading from the OTCQB Venture Market.

· On February 11ththe Company engaged ECOVIS David Yeung Hong Kong
("ECOVIS") as its new independent registered public accounting firm.
The Company has engaged ECOVIS for its ability to adapt its services
to the Company's demands and believes that as the world's 18thlargest
firm, ECOVIS is capable to meet whatever these demands require in a
timely manner.

· On February 23rdthe Company stocked the first test tanks with 1.2
million postlarvae prawns. In March a total of 2.4 million were
stocked, as the first cycle of prawns progresses.

CEO Commentary

Sino Agro Food's Chairman and CEO Solomon Lee summarized the year,
stating that "2015 was very much a transitional year during which we
have continued to build operational capacity to support production
well beyond current revenue. Further, we have laid the groundwork for
financial restructurings. We expect to capitalize on these efforts in
2016.

"Operationally, during the fourth quarter we continued to see the same
challenges as in the third, which consisted primarily of structurally
lower prices for domestic beef in China, lower market prices for some
fish species, certain supply shortages of juvenile animals for
aquaculture grow out, weather related construction delays, and
changing import and export regulatory policies for food into China.
Nonetheless, we remained profitable while providing the underpinnings
for increasing revenue in most businesses and improving margins in
many.

"We will continue to build scale in our three main operations in 2016:
Aquaculture, value added processing of meat products at SJAP and
wholesale imports of beef and seafood from abroad. As well as having
significant scale up potential, these segments provide the highest
return on invested capital.

"Our focus in Aquaculture is on the Zhongshan MegaFarm, where we
achieved some major milestones. We have completed construction of the
first two buildings in the project's first phase and started
construction of the third. The first test tanks were stocked in
February with 1.2 million postlarvae prawns. In March 2.4 million
were stocked, as the first cycle progresses. Considerable investments
made in 2014 and 2015 by the project owner at the Zhongshan MegaFarm
will start generating sale of goods revenue in 2016.

Gross profit in the Integrated Cattle segment grew by 8%, more than
countering diminished prices for domestic beef by expanding value
added processing of imported beef. Meanwhile, phasing out of existing
large-muscled Charolais and Simmental breeds in favor of more premium
breeds continues, with circa 3,000 head of beef cattle currently
being fattened. We expect this to improve live cattle margins later
in 2016 and in 2017; albeit, with somewhat lower live cattle volume.

"We have initiated restructuring of the Aquaculture segment in
preparation for a separate listing in Norway, the leading capital
market for seafood. Contracts are currently being consolidated into
our Hong Kong based Tri-way Industries Ltd. subsidiary..

"Steps are also being taken in preparation for separate listing of
other of our subsidiaries, again in an effort to align those
operations and assets into proper market valuations."

2015 Annual Report

For detailed segment operational performance and developments, please
take the time to read our latest 10-Q filing, or refer to the annual
report posted to the Company website: 2015 Annual and Interim Results
(http://sinoagrofood.investorroom.com/q4-2015_interim_report)

Earnings Call Information

The Company will host an earnings call on Monday, April 18, 2016 at
10:00 AM EDT/4:00 PM CET to discuss annual financial results for
2015, with questions and answers. To participate in the conference
call please use the following information:

+--------------------------------------+--------------------------------------+
|SIAF 2015 Annual Results Call |
|Information |
+--------------------------------------+--------------------------------------+
|Date: April 18, 2016 |Time: 10:00 AM, EDT/4:00 PM CET |
+--------------------------------------+--------------------------------------+
|Participant Dialing Instructions: |
+--------------------------------------+--------------------------------------+
|SE: +46 8 5059 63 06NO: +47|UK: +44 203 139 48 30CN: +86|
|23 50 05 59US: + 1 (866) 928-7517|400 681 54 21 |
+--------------------------------------+------------...

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