Oceanus Group posts net loss of 45m yuan in the first quarter

Abalone producer Oceanus Group has posted a net loss of 45.2 million yuan (S$9 million) for the three months ended March 31 as demand for its products weakened during the period.

This pushes it deeper into the red - the firm made a loss of 39 million yuan in the same period last year.

Sales dropped 69 per cent in the first quarter from the same period a year ago to 14.8 million yuan, as a result of China's new wave of austerity measures imposed by new government, the firm said.

"Abalone, like many other high end consumer products including liquor, were affected by the frugality drive," it wrote in its financial statement on Monday.

"We expect this trend to continue well into the next two to three quarters."

Oceanus has made a loss per share of 1.77 yuan cents for the first quarter, while its net asset value stood at 14.34 yuan cents a share as at March 31.

The firm said it plans to speed up the implementation of structural and organisational reforms to improve its production and business fundamentals in anticipation of a market recovery.

"These when fully implemented will enable the group to fully exploit its land-based resources to become a dominant market leader," it wrote, adding that the weak market conditions will likely cause many smaller abalone producers to consolidate or drop out of business altogether.