Imperial Ginseng Loss Narrows
VANCOUVER - May 15/02 - SNS -- Imperial Ginseng Products Ltd. experienced a net loss across the first nine months of the current fiscal year and during the latest quarter.
For the three and nine month periods ended on March 31, 2002, Imperial Ginseng had sales of $2.7 million and $5.2 million and a net loss of $400,000 and $600,000, respectively.
This compares to revenues of $2.6 million and $7.4 million, a net loss of $700,000 and $1.5 million, respectively, for the same periods in the prior year.
Company President James Chang said the Company harvested approximately 139 acres of four-year-old ginseng from its farms in Ontario and in British Columbia and produced a total of approximately 381,000 pounds of ginseng in the first half of fiscal 2002. Nearly all the B.C. ginseng and 80% of the merchandise harvested in Ontario has been sold.
Notwithstanding the further strengthened root prices realized from its Ontario root, a severe rust problem has significantly affected the root prices realized from the Company's BC operation.
The average prices realized by the Company for the nine months period ended on March 31, 2002 of approximately $13 per pound is significantly lower than the $15 per pound average price realized during the same period in the prior year.
Since the Company had already suspended planting in BC in the fall of 2001, the Company expects to achieve a near break-even on its operating cash flow.
Imperial Ginseng says the world market has been gaining strength in recent months. "This continued price recovery and the Company's strategic decision to significantly increase seeding at its Ontario farm is expected to reverse its current loss situation within the next 2 to 3 years. Since China now is officially a member of WTO, the Company also plans to take the opportunity to re-enter the China market to maximize its profits and cash flow," Chang said.
"It is conceivable, however, that China, the 6th largest economy in the world, needs to go through a major transitional and adjustment period after its admission to the WTO.
"The Company also expects that the ginseng industry, which relies primarily on the China market, could also go through an adjustment period. Specifically, the Company expects that the world ginseng root prices may show further fluctuations in the short term as the primary market, i.e., China undergoes major structural changes."
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