China Fishery posts 29% drop in Q3 net profit to $19 million

China Fishery Group has posted a 28.7 per cent decline in third quarter net profit to US$15 million (S$19 million).

Revenue for the three months to June 28 was flat at US$152.4 million, with gains in some areas offset by declines in others.

Revenue from Peruvian fishmeal operations, which accounted for about a third of total revenue, increased by 9.7 per cent to US$51.5 million. The increase was due to higher average selling prices of fishmeal and fish oil products on the back of the reduction in total allowable catch in Peru for the second fishing season.

Revenue from contract supply business, which accounted for 62 per cent of total revenue, fell by 3.9 per cent to US$94.4 million, due mainly to the prevailing lower average selling prices of various products.

Revenue from China fishery fleet operations, which accounted for 4.2 per cent of total revenue, decreased by 12.7 per cent to US$6.4 million.

The group's newly established fishing operations in Namibia were able to partially offset the reduction in revenue contribution.

Earnings per share shrank to 0.81 US cent from 1.76 cents previously while net asset value per share fell to 56 US cents compared to 80 US cents as at Sept 28.

Gross margin decreased slightly from 26.9 per cent to 25.6 per cent, due to the lower catch volume from reduced fishing quota in Peru, which resulted in higher per unit cost of production.

As a result, gross profit decreased by 4.8 per cent to US$39 million.

On prospects, China Fishery said the recent fluctuations in fishing quota of Peruvian anchovy are expected to continue to have an impact on the group's results for the rest of the financial year.

"The Peruvian government has, however, indicated that there are signs of a continued and strong recovery in the anchovy biomass," it noted.

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