China Fishery net profit down 13.7% to US$13.5m in Q1

INDUSTRIAL fishery company China Fishery Group on Tuesday posted a 13.7 per cent fall in net profit to US$13.5 million for the first quarter ended Dec 28, 2014 (Q1 FY2015), from US$15.7 million a year ago.

Revenue for the quarter declined 14.7 per cent from US$145.2 million to US$123.9 million. This comes as revenue from the contract supply business, which accounted for 37.5 per cent of total revenue, decreased by 21.1 per cent to US$46.5 million, due mainly to the termination and non-renewal of the group's long-term supply agreements (LSAs), said the mainboard-listed company.

Revenue from the China Fishery fleet, which accounted for 10.0 per cent of total revenue, decreased marginally by 0.8 per cent, from US$12.5 million to US$12.4 million.

For the quarter, gross profit margin increased from 30.5 per cent to 30.9 per cent, despite a 13.7 per cent fall in gross profit. This, according to China Fishery, was attributed to the higher average selling prices of fishmeal (up 40.5 per cent year-on-year) and fish oil (up 20.3 per cent), due to the temporary closure of the north-centre fishery.

"During the quarter, we have successfully delivered on our commitment to improve operating cash flows, reduce cost and working capital requirements. This drove an improvement in net-debt-to-equity from 89.6 per cent to 77.9 per cent, and an increase in cash flow from operations by 44 times from US$2.6 million in Q1 FY2014 to US$114.6 million in Q1 FY2015," said group managing director Ng Joo Siang.

"While we have more work to do, our efforts to date have set the stage for the group to execute on the elements of our strategic plan, including ongoing deleveraging," he added.

China Fishery on Tuesday morning requested for a trading halt of its shares on the Singapore Exchange.