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Qian Hu sweetens dividend as Q4 profit rises sevenfold
FISH service provider Qian Hu saw its earnings increase over seven times to S$346,000 for the fourth quarter ended December, buoyed by the absence of an impairment charge and the firm's budding aquaculture segment, while revenue for the quarter fell 5.1 per cent to S$19.6 million.
The Mainboard-listed company has declared a first and final dividend of 0.3 cent per share, up from 0.2 cent a year ago, to be paid on Apr 23.
For FY2019, Qian Hu's earnings more than doubled year-on-year to S$920,000, translating to an earnings per share of 0.81 cent, compared to 0.35 cent a year ago. However, full-year revenue fell 10.2 per cent to S$76.9 million, hit by falling fish and accessory sales.
Q4 topline was hit by a 16.5 per cent contraction in fish sales to S$6.3 million. This was caused by stiff price competition in the dragon fish business, which overshadowed growth in the emerging aquaculture segment.
Despite the fall in fish sales, Qian Hu managed to post a S$472,000 operating profit for its fish segment. This was possible by downsizing the dragon fish activities and stepping up its aquaculture side.
Meanwhile, sales from its plastics segment fell 14.3 per cent to S$2.8 million, due to softer demand from the consumer sector, on the back of a weaker domestic market. Rather than enter a price war, Qian Hu chose to maintain "sustainable margins", the company said in a press release.
The bright spot for the quarter was the accessories segment, where sales rose 6.7 per cent to S$10.4 million, due to the restructured accessories business in China, and revenue contributions from a unit newly acquired in Guangzhou in December 2019.
Kenny Yap, Qian Hu's executive chairman and managing director, said the company will continue to focus on growing the aquaculture business, "focusing on intensive farming of new species, expanding into new areas of the value chain, and conducting trials on new products".
"Our team of researchers are also developing new varieties of ornamental fish using new genomic technology. Moving ahead, we believe that our continued focus on technology, innovation and quality will hold us in good stead as we transform to stay ahead of the competition," he said in the release.
Qian Hu shares closed flat at S$0.133 on Monday.