Pacific Andes profit flat at HK$618.8m

Management admitted that the catch volume from the South Pacific is not up to expectations.

OCBC Investment Research noted:

Pacific Andes Resources Development (PARD) posted a 43% YoY drop in 3QFY12 net earnings to HK$146.1m. This formed about 19% of our full year estimate or a total of 78% for the 9-month period – which is fairly in line with our expectations.

Revenue dropped 15% YoY to HK$2530.1m. However, net margin fell from last year’s 8.6% to 5.8% in the quarter. Fishery & Fish Supply accounted for about 47% of revenue with the balance from the SCM business. The former saw a drop in gross margin from 38.5% last year to 26.9% this year.

For the 9-month period, revenue was up 16% to HK$8302.7m, while net profit was flat at HK$618.8m.

Management has acknowledged that the catch volume from the South Pacific is not up to expectations despite the potential size there. It is continuing with its strategy of better utilization of vessels via re-deploying its assets to better yielding fishing grounds.

Funds from the recent Senior Notes will be deployed in the coming months and are likely to be utilised to strengthen its business.