GLG Life Tech Corp. (TSX: GLG), a vertically integrated leader in the agricultural and commercial development of high quality stevia, announces financial results for the six months ended June 30, 2013. The complete set of interim financial statements and management discussion and analysis are available on SEDAR and on the Company’s website glglifetech.com.
The Company has focused in 2013 on increasing its international customer base and its international sales grew by 333 percent in the second quarter of 2013 compared with the second quarter of 2012. As previously disclosed, since the conclusion of the regulatory reviews and the resumption of the trading of the Company’s stock on the TSX in late June 2013, international sales orders have increased significantly from the levels achieved in the first half of 2013. The Company expects this change in business focus towards international customers will result in more predictable recurring revenue streams compared to large one-off or irregular purchases from other stevia providers.
The Company has also made progress in developing its business with COFCO in China. There are currently three main healthy food and beverage formulation projects underway pursuant to the Company’s previously announced strategic collaboration for the Chinese market with COFCO Nutrition and Health Research Institute Co Ltd., a 100 percent owned subsidiary of China National Cereals, Oils, and Foodstuff Corporation. Two projects are targeted at dairy products for the COFCO Mengniu Dairy Subsidiary and one is for COFCO’s China Foods subsidiary. The objective of these formulation projects is to create reduced calorie healthier products for COFCO subsidiaries and introduce products into the China market. The two partners are also assessing some of GLG’s existing stevia sweetened products for distribution in China including tabletop. Lastly, the two parties are in discussions on advancing the China Sugar Reserve Healthy Sugar project.
Revenue for the quarter was $3.4 million, 49 percent lower than the prior period. Revenue for the six months ended June 30, 2013 was $6.7 million, 13 percent lower than the prior period. Revenue reductions during the first half of 2013 were driven by the Company’s change in business focus to international customers and recurring revenue compared with a focus on selling large amounts of stevia extract to other stevia providers in 2012.
The Company’s quarterly net loss was $6.7 million compared with $6.0 million in the corresponding quarter in 2012. For the six month period, the net loss was $10.4 million compared with $9.8 million in the comparable period in 2012. Net losses include capacity charges of $1.7 million incurred during the second quarter and $3.2 million incurred during the six month period ended June 30, 2013.
Cash flow from operations during the quarter was $0.2 million, a $3.8 million improvement from cash used in operations of $3.6 million in the prior period. Cash increased by $2.9 million during the quarter to $4.8 million.
Working capital has significantly improved to a deficit of $0.3 million as at June 30, 2013 compared to a working capital deficit of $33.9 million as at December 31, 2012. The Company has successfully refinanced its short term loans with all of its lenders during the six months ended June 30, 2013.