Agria Reports Third Quarter 2008 Financial Results

BEIJING--(Marketwire - December 10, 2008) - Agria Corporation (NYSE: GRO) (the "Company" or "Agria"), an innovative China-based agri-solutions provider, today announced its financial results for the third quarter ended September 30, 2008.

Revenues for the third quarter of 2008 were RMB 87.8 million (US$12.9 million), as compared to revenues of RMB 73.3 million for the third quarter of 2007. In the third quarter of 2008, gross profit was RMB 50.1 million (US$7.4 million) as compared to RMB 55.5 million in the third quarter of 2007. In the third quarter of 2008, gross margins were 57.3% and 56.1% from the Company's sheep breeding and seedling segments, respectively. As noted in prior press releases, due to normal seasonality of the industry, corn seed revenue is typically nil in the third quarter with the major selling season occurring in the fourth quarter.

For the third quarter of 2008, net income was RMB 4.5 million (US$0.66 million) or net income of RMB 0.08 (US$0.01) per basic and diluted ADS, as compared to net income of RMB 41.1 million in same period last year, or net income of RMB 0.82 and RMB 0.78 per basic and diluted ADS respectively. The net income in the third quarter of 2008 is primarily attributable to strength in the Company's sheep segment. The third quarter of 2008 includes RMB 22.1 million (US$3.25 million) in non-cash compensation expenses (see "Reconciliation of Non-GAAP measures" in financial tables that follow below). Excluding non-cash compensation expenses, net income for the third quarter of 2008 (non-GAAP) was RMB 26.6 million (US$3.9 million) or net income of RMB 0.42 (US$0.06) per basic and diluted ADS.

As of September 30, 2008, the Company has repurchased 200,000 of its ADSs since the announcement of its repurchase program on August 12, 2008. As of September 30, 2008, the Company had cash and cash equivalents of RMB 1.19 billion (US$175 million), with total bank borrowings remaining at RMB 8.8 million (US$1.3 million).

Alan Lai, Agria's chairman and chief executive officer, commented, "We expect Agria's operating environment will remain difficult for the foreseeable future. We will be evaluating implications on our business and strategy as part of the company's recent senior management changes. Given the above, Agria is withdrawing its prior forecast for the fourth quarter of 2008, as provided in the company's press release on November 11, 2008. We plan to hold a conference call as soon as possible to update investors on the results of our evaluation."

Convenience Currency Translation

The conversion of RMB into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. For the third quarter of 2008, the rate is as of September 30, 2008, which was RMB 6.7899 to US$1.0000. No representation contained herein is intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2008, or at any other date. The percentages stated in this press release are calculated based on RMB.

About Agria Corporation

Agria Corporation (NYSE: GRO) is an innovative China-based agri-solutions provider focusing on research and development, production and distribution of three different types of upstream agricultural products. Its diversified portfolio of products comprises corn seeds, sheep breeding and seedlings, including proprietary products. The Company has access to approximately 27,000 acres of farmland in seven provinces and its extensive distribution network provides direct or third party distribution in 14 provinces. For more information about Agria Corporation, please visit www.agriacorp.com.

Safe Harbor Statement:

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Agria may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Agria's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in Agria's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this announcement unless otherwise stated, and Agria does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Non-GAAP Financial Measures

To supplement our consolidated financial information prepared in accordance with U.S. GAAP, Agria Corporation uses non-GAAP measures of net income and earnings per share and per ADS, which are adjusted to exclude non-cash compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP Measures" set forth at the end of this release.

Agria believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding non-cash compensation expenses that may not be indicative of its operating performance from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Agria's historical performance and liquidity. Agria intends to compute its non-GAAP financial measures using the same consistent method from quarter to quarter. We believe these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income and earnings per share and per ADS excluding non-cash compensation expenses is that these non-GAAP measures exclude non-cash compensation charge that has been and may continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

                          -- Tables Attached --



                            Agria Corporation
                  Consolidated Statements of Operations
         (In thousands of RMB, except per share and per ADS data)
                                (Unaudited)


                             Three months ended         Nine months ended
                             30-Sep       30-Sep       30-Sep       30-Sep
                               2007         2008         2007         2008
Revenue:
Corn seeds                       --           --      133,853      164,897
Sheep breeding products      61,482       71,621      172,081      122,832
Seedlings                    11,814       16,129       46,769       57,730
                        -----------  -----------  -----------  -----------
Total revenue                73,296       87,750      352,703      345,459
                        -----------  -----------  -----------  -----------

Cost of revenue:
Corn seeds                       --          (27)     (80,395)    (105,799)
Sheep breeding products     (14,046)     (30,566)     (44,589)     (57,887)
Seedlings                    (3,717)      (7,076)     (14,396)     (24,612)
                        -----------  -----------  -----------  -----------
Total cost of revenue       (17,763)     (37,669)    (139,380)    (188,298)
                        -----------  -----------  -----------  -----------
Gross profit                 55,533       50,081      213,323      157,161

Operating expense (Note
 1):
Selling expenses             (2,971)      (3,501)     (10,908)     (12,107)
General and
 administrative
 expenses                    (7,554)     (31,342)     (11,116)    (853,502)
Research and
 development expenses          (642)      (3,767)      (1,667)     (10,129)
                        -----------  -----------  -----------  -----------
Total operating
 expenses                   (11,167)     (38,610)     (23,691)    (875,738)
                        -----------  -----------  -----------  -----------

Operating profit/(loss)      44,366       11,471      189,632     (718,577)
Interest income                 693        7,817          843       26,243
Interest expense             (3,183)        (393)      (6,272)      (1,223)
Exchange loss                  (850)        (799)          --      (11,072)
Other income                    123          701          297        1,695
Other expense                    --       (5,620)          --       (9,949)
                        -----------  -----------  -----------  -----------
Income/(loss) before
 income tax                  41,149       13,177      184,500     (712,883)
Income tax                       --       (8,692)          --      (27,942)
                        -----------  -----------  -----------  -----------
Net income/(loss)            41,149        4,485      184,500     (740,825)
                        ===========  ===========  ===========  ===========

Earnings/(loss) per
 share:
-Basic                      RMB0.41      RMB0.04      RMB1.85     RMB(5.86)
-Diluted                    RMB0.39      RMB0.04      RMB1.81     RMB(5.86)
                        ===========  ===========  ===========  ===========

Weighted average number
 of ordinary shares
 outstanding:
-Basic                  100,000,000  126,289,758  100,000,000  126,362,984
-Diluted                105,603,039  126,289,758  101,955,592  126,375,972

Earnings/(loss) per ADS
 (Note 2):
-Basic                      RMB0.82      RMB0.08      RMB3.69    RMB(11.72)
-Diluted                    RMB0.78      RMB0.08      RMB3.62    RMB(11.72)
                        ===========  ===========  ===========  ===========

Note 1:
P3A cash payment
 included in G&A
 expense                         --           --           --      126,992
                        ===========  ===========  ===========  ===========

Share based
 compensation expense
 is included in:
General and
 administrative
 expenses                     4,365       21,741        4,365      680,064
Research and
 development expenses            --           27           --           40
Cost of revenue                  --          315           --          471
                        -----------  -----------  -----------  -----------
Total (Note a)                4,365       22,083        4,365      807,567
                        ===========  ===========  ===========  ===========
Note a: Included in share-based compensation expense for the nine months
ended Sept 30, 2008 is an amount of RMB639,649 thousands, which relates to
the P3A Payment as noted in prior press release
Note 2:
Each ADS represents two ordinary shares.




                            Agria Corporation
                  Consolidated Statements of Operations
         (In thousands of US$, except per share and per ADS data)
                                (Unaudited)


                                                    Three             Nine
                                                   months           months
                                                    ended            ended
                                                   30-Sep           30-Sep
                                                     2008             2008
Revenue:
Corn seeds                                             --           24,286
Sheep breeding products                            10,548           18,090
Seedlings                                           2,376            8,502
                                              -----------      -----------
Total revenue                                      12,924           50,878
                                              -----------      -----------

Cost of revenue:
Corn seeds                                             (4)         (15,582)
Sheep breeding products                            (4,502)          (8,525)
Seedlings                                          (1,042)          (3,625)
                                              -----------      -----------
Total cost of revenue                              (5,548)         (27,732)
                                              -----------      -----------
Gross profit                                        7,376           23,146

Operating expense (Note 1):
Selling expenses                                     (516)          (1,783)
General and administrative expenses                (4,616)        (125,702)
Research and development expenses                    (555)          (1,492)
                                              -----------      -----------
Total operating expenses                           (5,687)        (128,977)
                                              -----------      -----------

Operating loss                                      1,689         (105,831)
Interest income                                     1,151            3,865
Interest expense                                      (58)            (180)
Exchange loss                                        (117)          (1,631)
Other income                                          103              250
Other expense                                        (828)          (1,465)
                                              -----------      -----------
Income/(Loss) before income tax                     1,940         (104,992)
Income tax                                         (1,280)          (4,115)
                                              -----------      -----------
Net Income/(loss)                                     660         (109,107)
                                              ===========      ===========

Earnings/(Loss) per share:
-Basic                                           US$0.005         US$(0.86)
-Diluted                                         US$0.005         US$(0.86)
                                              ===========      ===========
Weighted average number of ordinary shares
 outstanding:
-Basic                                        126,289,758      126,362,984
-Diluted                                      126,289,758      126,375,972

Earnings/(Loss) per ADS (Note 2):
-Basic                                            US$0.01         US$(1.72)
-Diluted                                          US$0.01         US$(1.72)
                                              ===========      ===========


  Note 1:
  P3A cash payment included in G&A expense             --           18,703

  Share based compensation expense is
   included in:
  General and administrative expenses               3,202          100,158
  Research and development expenses                     4                6
  Cost of revenue                                      46               69
  Total (Note a)                                    3,252          118,936
  Note a: Included in share-based
   compensation expense for the nine months
   ended Sept 30, 2008 is an amount of
   RMB94,206 thousands, which relates to
   the P3A Payment as noted in prior
   press release
  Note 2:
  Each ADS represents two ordinary shares.






                            Agria Corporation
                    Reconciliation of Non-GAAP measures
         (In thousands of RMB, except per share and per ADS data)
                                (Unaudited)


                                 Three months ended      Nine months ended
                                 30-Sep      30-Sep      30-Sep      30-Sep
                                  2007        2008        2007        2008

Net income/(loss)                41,149       4,485     184,500   (740,825)
Non-cash compensation
 expense (Note 1)                 4,365      22,083       4,365    807,567
                            ----------- ----------- ----------- ----------

Non-GAAP net income              45,514      26,568     188,865     66,742
                            =========== =========== =========== ==========

Net income/(loss) per ADS
 - basic                        RMB0.82     RMB0.08     RMB3.69  RMB(11.72)
Net income/(loss) per ADS
 - diluted                      RMB0.78     RMB0.08     RMB3.62  RMB(11.72)
                            =========== =========== =========== ==========

Non-GAAP net income per ADS
 - basic                        RMB0.91     RMB0.42     RMB3.78    RMB1.06
Non-GAAP net income per ADS
 - diluted                      RMB0.86     RMB0.42      RMB3.7    RMB1.06
                            =========== =========== =========== ==========

Weighted average shares
 used in calculating
 non-GAAP basic net income
 per ADS                     50,000,000  63,144,879  50,000,000 63,181,492
Weighted average shares
 used in calculating
 non-GAAP diluted net
 income per ADS              52,801,520  63,144,879  50,977,796 63,187,986







                            Agria Corporation
                    Reconciliation of Non-GAAP measures
         (In thousands of US$, except per share and per ADS data)
                                (Unaudited)

                                                      Three           Nine
                                                     months         months
                                                      ended          ended
                                                     30-Sep         30-Sep
                                                       2008           2008

Net income/(loss)                                       660       (109,107)
Non-cash compensation expense (Note 1)                3,252        118,936
                                                -----------     ----------

Non-GAAP net income                                   3,912          9,829
                                                ===========     ==========

Net income/(loss) per ADS - basic                   US$0.01       US$(1.73)
Net income/(loss) per ADS - diluted                 US$0.01       US$(1.73)
                                                ===========     ==========

Non-GAAP net income per ADS - basic                 US$0.06        US$0.16
Non-GAAP net income per ADS - diluted               US$0.06        US$0.16
                                                ===========     ==========

Weighted average shares used in calculating
 non-GAAP basic net income per ADS               63,144,879     63,181,492
Weighted average shares used in calculating
 non-GAAP diluted net income per ADS             63,144,879     63,187,986

Note 1: Non-cash compensation in the 3 and 9 month periods of 2008 includes
compensation charge of RMB 0 (US$0) and RMB 766,641 thousands (US$112,909
thousands), respectively, related to the P3A Payment as noted in prior
press release

Note 2: Each ADS represents two common shares.







                            Agria Corporation
                        Consolidated Balance Sheets
                              (In thousands)


                                        (Audited)  (Unaudited)  (Unaudited)
                                          31-Dec       30-Sep       30-Sep
                                            2007         2008         2008
                                           (RMB)        (RMB)        (US$)
ASSETS
Current assets:
Cash and cash equivalents              1,387,153    1,190,240      175,296
Accounts receivable (net of
 allowance for doubtful accounts)        200,757      193,832       28,547
Inventories                               59,937       39,954        5,884
Prepayments and other current assets      48,626       46,919        6,910
Amounts due from related parties             557        3,866          569
                                     -----------  -----------  -----------
Total current assets                   1,697,030    1,474,811      217,206
                                     -----------  -----------  -----------

Non-current assets:
Property, plant and equipment, net        65,680       84,725       12,478
Investment                                   205          205           30
Intangible assets, net                   189,499      386,397       56,908
Non-current prepayments                   14,127       20,660        3,043
Deferred tax assets                          529          529           78
Other assets, net                        104,466      115,699       17,040
                                     -----------  -----------  -----------
Total non-current assets                 374,506      608,215       89,577
                                     -----------  -----------  -----------
Total assets                           2,071,536    2,083,026      306,783
                                     ===========  ===========  ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings                15,160        8,800        1,296
Long-term bank borrowing, current
 portion                                      --           --           --
Accounts payable                           9,011       10,150        1,495
Accrued expenses and other
 liabilities                              31,471       31,126        4,584
Deferred revenue                           1,122          518           76
Amount due to a shareholder                   --           --           --
Amounts due to related parties               212           --           --
                                     -----------  -----------  -----------
Total current liabilities                 56,976       50,594        7,451
                                     -----------  -----------  -----------

Non-current liabilities:
Deferred tax liability                   157,561      185,503       27,320
Amounts due to related parties             8,792        8,792        1,295
                                     -----------  -----------  -----------
Total non-current liabilities            166,353      194,295       28,615
                                     -----------  -----------  -----------
Total liabilities                        223,329      244,889       36,066
                                     -----------  -----------  -----------


Shareholders' equity:
Paid-up capital                               --           --           --
Additional paid-in capital             1,561,933    2,376,289      349,974
Statutory reserves                        76,953       76,953       11,334
Accumulated other comprehensive loss      (9,421)     (93,022)     (13,700)
Retained earnings / (accumulated
 loss)                                   218,742     (522,083)     (76,891)
                                     -----------  -----------  -----------
Total shareholders' equity             1,848,207    1,838,137      270,717
                                     -----------  -----------  -----------
Total liabilities and shareholders'
 equity                                2,071,536    2,083,026      306,783
                                     ===========  ===========  ===========

Contact Information: Contacts: In China: Matt Feng Investor Relations China Tel: 133-1130-0320 matt.feng@agriacorp.com In the U.S.: David Pasquale Senior Vice President U.S. Tel: +914-337-1117 david.pasquale@agriacorp.com