CHINA - China Fishery Group Limited has released its financial year 2013 results. The year saw a 7.3 per cent increase in net profit and the group became Peru's largest fishmeal and fish oil producer, following the successful completion of Copeinca acquisition.
With the recent completion of Copeinca acquisition, the Group has become the largest holder of Peruvian Anchovy quota and a leading producer and exporter of fishmeal and fish oil in the world.
The Group expects to capitalize on this new position of strength to generate additional revenue opportunities, as well as to derive significant cost savings. The Group also endeavours to build on the enlarged business platform with a stronger capital base to support its continued growth.
During the year under review, net profit attributable to shareholders increased by 7.3 per cent from US$78.1 million to US$83.8 million, despite revenue decreasing by 8.1 per cent to US$555.0 million.
The Group's newly established fishing operations in Namibia contributed positively to the performance of China Fishery Fleet while Peruvian Fishmeal Operations benefitted from higher average selling prices of fishmeal / fish oil, as well as maiden revenue contribution from Copeinca.
These positive contributions partially offset the reduction in revenue due to the substantial reduction in Total Allowable Catch ("TAC") for Peruvian Anchovy in the 2012 second fishing season.
The board of directors recommended payment of a first and final dividend of 1.0 Singapore cent per share for FY2013 (FY2012:1.9 Singapore cents) after taking into account of the one to one rights issue during the year.
Commenting on the Group's developments in FY2013, Group Managing Director Mr Ng Joo Siang said: "FY2013 was a year of momentum and transformation for China Fishery. We achieved our goal of increasing access to under-utilized and sustainable marine resources. Following the successful acquisition of Copeinca, we look forward to Peruvian Fishmeal Operations becoming a driver of future growth for the Group. We also expect our newly established fishing operations in Namibia to be an exciting contributor going forward."
With a currently robust Peruvian Anchovy biomass level estimated at between 10.8 million tonnes and 12.1 million tonnes, the Peruvian Government increased the TAC for the second fishing season (from November 2013 to January 2014) to 2.3 million tonnes. This is 2.8 times higher compared to the same fishing season last year. This is strong evidence that the Peruvian Anchovy resource is sustainable and is well managed under an effective fishery management policy adopted by the Peruvian Government.
This significant increase in the TAC of Peruvian Anchovy, coupled with the rising demand for fish globally, augurs well for the fishmeal and fish oil business. The Food and Agriculture Organisation of the United Nations estimates that an additional 50 million tonnes of farmed fish will be required to meet the demand of the rising world population by 2030. Fishmeal and fish oil are key feed input in aquaculture.
China Fishery is well-positioned to capitalize on these positive trends with the foundation that it has been laying during the past years through a number of acquisitions in Peru.
"Looking forward to FY2014, China Fishery will focus on the creation and realisation of synergies and cost savings from the Copeinca acquisition. The Group will also explore the possibility of increasing the value of the catch by promoting Peruvian Anchovy for direct human consumption. This presents a long-term value proposition for the overall growth of the Group's business," said Mr Ng.
The Group will retain Copeinca's listing status on Oslo Børs in this period when it is considering various strategic options for improving the Group's organisational and capital structures. The Group remains committed in its efforts to strengthen its balance sheet in order to grow its business in the future.
