Pacific Andes reports dismal Q3 earnings

SINGAPORE - Fishery group Pacific Andes Resources Development's third quarter net profit slumped by 89.9 per cent to HK$37.7 million (S$6.8 million) on the back of a 6.6 per cent drop in revenue to HK$2.05 billion.

The sharp fall in profit was due mainly to lower sales volume of fishmeal and fish oil, the absence of a one-off gain that had boosted earnings in the same period last year as well as the cost associated with early redemption of bonds.

Revenue from the fishery and fish supply division, which accounted for 51.8 per cent of total revenue, plunged by 12.1 per cent to HK$1.06 billion, due mainly to lower sales from the Peruvian fishmeal operations.

However, revenue from the frozen fish supply chain management division, which accounted for 48.2 per cent of total revenue,inched up 0.2 per cent to HK$989.3 million, despite a drop in sales volume.

Earnings per share shrank to 0.44 HK cent from 7.66 HK cents previously while net asset value per share eased to HK$1.45 compared to HK$2.35 as at Sept 28, 2014.

Looking ahead, Pacific Andes said it will continue to focus on increasing operational efficiencies, and prudent management and conservation of cash.

The frozen fish division will continue to focus on reducing borrowings and working capital.

As a result, sales volume is expected to decrease on a full year basis.

In Peru, the total allowable catch quota for Pacific Andes for the second half year in the South Anchovy fishing ground was set at 450,000 tonnes.

The company considers this quota as very encouraging as it means that the allowable anchovy catch for the full year is 825,000 tonnes, which is comparable to previous years.

"This indicates that fish stocks are currently healthy and of the same levels as earlier years," it noted.