China Fishery Group's gains took a deep 25% dive

Net loss amounted to US$14.9m.

According to DBS, CFG’s 4Q/FY12 results were below consensus and our expectations. FY12 core net profit fell by 25% y-o-y to US$78.1m, with 4Q registering a net loss of US$14.9m, the first quarterly loss for CFG.

Here's more from DBS:

Revenue for FY12 fell by 12% on the back of a sharp 59% y-o-y drop in contribution from its South Pacific (SP) fishery fleet.

The Peruvian operations contributed a strong growth in PAT to US$18.3m, but this failed to offset huge loss of US$26.9m incurred by its SP fishery fleet.

DPS of 1.9Scts was proposed, equating to a payout ratio of c.20%, below the Group’s past practice of one-third payout ratio. Management indicated that it had adopted a more prudent approach, in view of its current operating results.

This equates to a yield of just 2.8%, a disappointment, in our view.

We cut our FY13F/14F forecasts by 36% and 28%, arising from (i) a lower harvest quantity assumed for its South Pacific fishery fleet; (ii) lower fishmeal/oil sales volume, offset partially by higher ASP.

The latest Peruvian Anchovy season in Nov-Dec12 saw quotas of just 810k mt, down 70% from 2.5m mt a year ago. We see continued challenges ahead for the Group, and weak operating results.