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Qian Hu posts 61.6% rise in Q2 net profit on higher handling income

QIAN Hu on Wednesday reported a 61.6 per cent year-on-year increase in net profit for the second quarter ended June 30 on the back of higher net handling income.

The mainboard-listed integrated fish service provider posted a Q2 net profit of S$236,000, compared to S$146,000 in the corresponding period a year ago. This was achieved despite a 12.5 per cent decline in revenue to S$19.2 million from S$21.9 million. Lower revenue was a result of poorer sales in all the business segments - fish, accessories and plastics.

But a 144.2 per cent higher net handling income derived from the handling of transhipments in relation to its aquaculture business helped to boost Qian Hu's bottom line. Also, its fish segment achieved a 55.6 per cent increase in operating profit to S$588,000, boosted by higher sales of edible fish that fetched higher margins.

It is gradually downsizing its dragon fish business, which has experienced intense price competition since 2018.

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Earnings per share rose to 0.21 Singapore cent in Q2 from 0.13 Singapore cent in the year-ago period while net asset value per share increased marginally to 45.03 Singapore cents as at June 30 from 44.75 Singapore cents half a year ago.

Qian Hu enjoyed a 50.8 per cent higher net profit at S$273,000 for the first half of the financial year 2019, compared to S$181,000 for the year-ago period. But revenue was 12.6 per cent lower at S$38.1 million, versus S$43.6 million for H1FY18.

Kenny Yap, Qian Hu's executive chairman and managing director, said: "Despite the challenging business landscape worldwide, we remain optimistic that the performance of our fish business will improve in the coming quarters, as we continue our growth trajectory for our aquaculture business in Hainan (China). We also hope to see the positive benefits from the restructuring of our accessories operations in China in the months ahead."

The counter closed flat at S$0.135 on Wednesday before the results were announced.