China Fishery Records Another Quarter Of Revenue Growth In 2qfy2011

Singapore Exchange Mainboard-listed industrial fishing company China Fishery Group Limited reported its results for the second quarter and first half of the financial year ending 28 September 2011, reports www.megafishnet.com with reference to China Fishery Group.

Group revenue increased by 8.9% from US$275.5 million to US$300.0 million. Trawling and Peruvian fishmeal operations accounted for 91.5% and 8.5% of total revenue respectively.

Revenue generated from trawling operations increased by 19.2% from US$230.2 million to US$274.4 million. This was attributed mainly to higher catch volumes from the North Pacific trawling operations higher contributions from the South Pacific operations and the maiden contribution from the Mauritania trawling operations.

Revenue generated from the Peruvian fishmeal operations fell by 43.6% from US$45.3 million to US$25.6 million. The reduction was due mainly to lower sales volume in 2QFY2011 which had resulted from lower catch volume and inventories carried forward from 1QFY2011, following a temporary closure of fishing grounds in Peru. The Peruvian government had instituted several discontinuous closure of fishing grounds in the North and Central Peru from December 2010 to January 2011 to protect the juvenile fish in the sea so as to ensure the long term sustainability of the fish stock.

Although, sales in general has not been negatively affected by the earthquake and tsunami in Japan, the delivery of fish roe to Japan in March 2011 was delayed, resulting in sales of fish roe to Japan in March 2011 being recorded in the next quarter.

Geographically, the PRC remained the Group's most significant market, accounting for 63.1% of the Group's revenue. West Africa accounted for 13.4%, Japan and Korea accounted for 11.9%, Europe accounted for 8.2% while South East Asia and other markets accounted for the remaining 3.4%. By operations, trawling and Peruvian fishmeal operations accounted for 91.5% and 8.5% of total revenue respectively.

In terms of profitability, gross profit increased by 3.0% from US$105.1 million to US$108.3 million. Gross profit margin decreased from 38.1% to 36.1%, due primarily to the loss incurred in 2QFY2011 for the fishmeal operations and higher vessel operating costs. EBITDA increased by 13.2% from US$101.7 million to US$115.2 million. Net profit increased marginally by 0.5% from US$65.2 million to US$65.5 million.

Commenting on the Group's outlook, Group Managing Director Mr. Ng Joo Siang said, "We are pleased that the Peruvian fishing ground has been re-opened in April 2011, with total allowable catch ("TAC") increased from 2.50 million tonnes to 3.68 million tonnes, evidence of the healthy recovery of fish stock. Since the start of the fishing season in April 2011, we witnessed higher catch volumes averaging approximately 3,400 tonnes/day which compared favourably against average catch volumes of approximately 930 tonnes/day in the first 2 quarters in FY2011 which further indicates that the El Nino and La Nina effects are now behind us. The Group is currently enjoying a higher quota share as a result of previous acquisitions and is expected to fully utilize its quota share."

"In view of the expected benefits from the higher catch volume in Peru, as well as the core organic growth strategies that are in place for the Group's trawling operations, we are confident of continued growth and improved operating results in FY2011."