Poor catch in Peru seas hurt China Fishery’s net profit for 2Q11

The fishing company's net profit fell 2.4% YoY to US45.8mln due to weak Peruvian fishmeal operations.

Revenue from Peru dropped by 43.6% from US$45.3 mln to US$25.6 mln resulting from lower catch volume and inventories carried forward from 1Q11, following a temporary closure of fishing grounds in the country.

In a statement, CFG said 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.”

CFG also disclosed that 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.

Gross profit margin, however, 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.

Despite the drop in profit, the company enjoyed a revenue increase of 8.9% in 1H11 from US$275.5 mln to US$300.0 mln on the back of higher catch volumes from the North Pacific trawling operations and the maiden contribution from the Mauritania trawling operations.

CFG's Managing Director Ng Joo Siang said the “favorable” average catch volumes in April 2011-- from 930 tonnes a day in the first 2 quarters in FY2011 to 3,400 tonnes a day are indicative that the effects of El Nino and La Nina have waned.