China Shengmu Organic Milk : Announcements and Notices - Interim Results Announcement for the Six-month Period Ended 30 June 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2019

FINANCIAL HIGHLIGHTS

	For the six-month period ended 30 June
	2019	2018	Movements
	RMB'000	RMB'000
Revenue	1,420,582	1,400,105	1.5%
Gross profit	517,404	434,880	19.0%
Profit/(loss) from continuing operations	32,233	(722,170)	754,403
Loss from a discontinued operation	(52,991)	(556,033)	503,042
Loss for the period	(20,758)	(1,278,203)	1,257,445

In this announcement "we", "us" and "our" refer to the Company (as defined below) and where the context otherwise requires, the Group (as defined below).

Translated English names of Chinese natural persons, legal persons, governmental authorities, institutions or other entities for which no official English translation exists are unofficial translations for identification purpose only.

- 1 -

The board (the "Board") of directors (the "Directors") of China Shengmu Organic Milk Limited (the "Company" or "China Shengmu") herein presents the unaudited consolidated interim results of the Company and its subsidiaries (the "Group" or "Shengmu") for the six- month period ended 30 June 2019 (the "2019 Interim Period" or the "Interim Period"), together with the comparative figures for the six months period ended 30 June 2018 (the "2018 Interim Period") as follows:

INTERIM CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

		For the six months ended 30 June
	Notes	2019		2018
		(Unaudited)	(Unaudited)
					Restated*
		RMB'000	RMB'000
CONTINUING OPERATIONS
REVENUE	3	1,200,780		969,370
Cost of sales		(756,195)	(682,506)
Gross profit		444,585		286,864
Loss arising from changes in fair value less
costs to sell of biological assets		(163,495)	(886,071)
Other income and (losses)/gains		(16,472)	16,351
Selling and distribution expenses		(17,809)	(27,583)
Administrative expenses		(57,336)	(37,148)
Impairment losses on financial and
contract assets, net		(12,802)	(1,016)
Finance costs		(122,860)	(70,650)
Share of losses of associates		(21,361)	(3,398)
PROFIT/(LOSS) BEFORE TAX FROM
CONTINUING OPERATIONS		32,450		(722,651)
Income tax (expense)/credit	4	(217)	481
PROFIT/(LOSS) FOR THE PERIOD
FROM CONTINUING OPERATIONS		32,233		(722,170)
DISCONTINUED OPERATION
Loss for the period from
a discontinued operation	5	(52,991)	(556,033)
LOSS FOR THE PERIOD		(20,758)	(1,278,203)

- 2 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME (CONTINUED)
		For the six months ended 30 June
	Note	2019		2018
		(Unaudited)	(Unaudited)
		RMB'000	Restated*
		RMB'000
Profit/(loss) attributable to:
Owners of the parent		(73,501)	(1,158,623)
Non-controlling interests		52,743		(119,580)
		(20,758)	(1,278,203)
LOSS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS
OF THE PARENT	7
Basic
- For loss for the period		(RMB0.012)	(RMB0.182)
- For loss for continuing operations		(RMB0.003)	(RMB0.095)
Diluted
- For loss for the period		(RMB0.012)	(RMB0.182)
- For loss for continuing operations		(RMB0.003)	(RMB0.095)
Exchange differences on translation
of foreign operations		(1,903)	(4,198)
Net other comprehensive loss that may
be reclassified to profit or loss in
subsequent periods		(1,903)	(4,198)
OTHER COMPREHENSIVE LOSS
FOR THE PERIOD, NET OF TAX		(1,903)	(4,198)
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD		(22,661)	(1,282,401)
Profit/(loss) attributable to:
Owners of the parent		(75,404)	(1,162,821)
Non-controlling interests		52,743		(119,580)
		(22,661)	(1,282,401)

• Certain amounts shown here do not correspond to the interim condensed consolidated financial information for the six months ended 30 June 2018 and reflect adjustments made. Refer to note 2 to the interim condensed consolidated financial information for the six months ended 30 June 2019.

- 3 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

			As at
			30 June	31 December
	Note	2019			2018
			(Unaudited)	(Audited)
			RMB'000	RMB'000
NON-CURRENT ASSETS
Property, plant and equipment		2,044,931			2,087,045
Right-of-use assets		20,074			-
Prepaid land lease payments			-	18,845
Other intangible assets		10,813			11,463
Investments in associates		199,118			90,328
Biological assets	8	2,568,631			2,667,427
Prepayments, other receivables and other assets		88,074			1,014
Long term receivables		11,794			11,516
Deferred tax assets		410			410
Other non-current assets		11,289			9,930
Total non-current assets		4,955,134			4,897,978
CURRENT ASSETS
Inventories		346,496			604,060
Biological assets	8	3,778			7,492
Trade and bills receivables		225,871			246,715
Prepayments, other receivables and other assets		769,809			599,092
Pledged deposits		46,887			150,617
Cash and bank balances		250,235			74,052
Assets of a disposal group classified as held
for sale			-	978,355
Total current assets		1,643,076			2,660,383

- 4 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF

FINANCIAL POSITION (CONTINUED)

		As at
		30 June	31 December
	2019			2018
		(Unaudited)	(Audited)
		RMB'000	RMB'000
CURRENT LIABILITIES
Trade and bills payables	989,827			997,085
Other payables and accruals	658,519			486,235
Derivative financial instruments	5,779			81,238
Interest-bearing bank and other borrowings	1,999,288			2,218,864
Liabilities directly associated with the assets
classified as held for sale		-	790,006
Total current liabilities	3,653,413			4,573,428
NET CURRENT LIABILITIES	(2,010,337)		(1,913,045)
TOTAL ASSETS LESS CURRENT
LIABILITIES	2,944,797			2,984,933
NON-CURRENT LIABILITIES
Interest-bearing bank and other borrowings	43,665			49,518
Long term payables	57,205			56,528
Total non-current liabilities	100,870			106,046
Net assets	2,843,927			2,878,887
EQUITY
Equity attributable to owners of the parent
Share capital	50			50
Reserves	2,018,063			2,017,863
	2,018,113			2,017,913
Non-controlling interests	825,814			860,974
Total equity	2,843,927			2,878,887

- 5 -