As the year&rsquo s first anchovy season in Peru kicks off to an early start, fishmeal sellers out of Peru are holding off on booking too many orders for now in anticipation of a firm market ahead.

A potential high level of small anchovy in the catch could see Peru&rsquo s first fishing season hit by several &lsquo mini-bans&rsquo on fishing, three large Peruvian producers told Undercurrent News.

This, combined with uncertainty over this year&rsquo s El Nino effect and over demand in China, coupled with relatively low inventories in Peru and a moderate fishing quota, mean prices are expected to remain firm if not go up in the coming months,  said the exporters.

http://www.undercurrentnews.com/2014/04/24/fishmeal-players-hold-off-on-orders-for-now-as-season-makes-early-start/

 

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Pacific Andes Resource Development (PARD) reported double-digit dips in Q2 pre-tax profitability and turnover, with far lower sales generated from its Russian pollock " contract supply" business.

PARD, which is listed in Hong Kong but also includes the results of China Fishery Group, which is separately listed in Singapore, reported revenue of HKD 2.23 billion for its Q2, which ended March 28, 2014 down 10.3% year-on-year.

Gross profit for PARD was HKD 500.26 million, down 5.5% y-o-y, with pre-tax profit of HKD 304.79m, down 17.7% y-o-y.

The main reasons for the decline are big dips in the revenue from its frozen fish supply chain management (SCM) and contract supply divisions, both involved in Russian pollock, although the company does not state this in results.

This comes after the  announced the termination its long-term supply agreements (LSAs) on March 24,  to buy pollock on the spot market for its plants in China. Pacific Andes is the largest producer of double frozen pollock fillets from its massive plant in Qingdao, although results from this division are only included in the  Pacific Andes International Holdings results.

Revenue from the contract supply business decreased by 66.1% from $136.7m to $46.3m, due mainly to the termination and non-renewal of the LSAs,  which the company had signed with British Virgin Island (BVI) registered Perun and Alatir last year.

The company had signed the LSAs in order to secure Russian pollock raw material for its processing plants in China,  amid accusations from the Russian government of owning vessels and quotas in the fishery,  which Pacific Andes denied repeatedly.

Following the termination of the LSAs, the group participated in the spot market, it said.

Pacific Andes, however, " did not trade on occasions when the spot prices of certain products were unfavorable" .

Revenue from the Frozen Fish SCM division, which accounted for 37.2% of total sales for PARD, decreased by 32% to HKD 830.7m, mainly attributable to lower sales volume, said Pacific Andes. The Frozen Fish SCM division is involved in the shipping of Russian pollock, although the company does not state this.

Revenue from the fishery and fish supply division of PARD, which is also separately listed as China Fishery, accounted for 62.8% of total Q2 revenue and increased by 10.6% to HKD 1.40bn.

This was mainly attributed to contribution from the enlarged Peruvian fishmeal operations and a significant increase in the total allowable catch (TAC) of Peruvian anchovy for the 2013 second fishing season.  The dip in the contract supply business somewhat offset this, however.

Revenue from its Peruvian fishmeal operations increased by 6.8 times to $129.7m. This was due primarily to the higher TAC and contributions from Copeinca.

During Q2, the average selling prices of fishmeal decreased to $1,346 per metric ton, from $1,431t in the same quarter of its 2013 financial year. The price of fish oil decreased to $1,977t to $2,328t, driven by a significant increase in supply.

Revenue from the China Fishery Fleet decreased by 58.7% from $9.4m to $3.9m, due primarily to low inventory carried over from the first quarter of its 2014 financial year.

News Release

China Fishery revenue increases 20.1% through strong contribution from Peruvian Fishmeal Operations

• 
  
     Revenue from combined Peruvian Fishmeal Operations up 5.4 times
• 
  
     Gross profit up 21.9%
• 
  
     Successful completion of re-financing for the Group
• 
  
     Focus on consolidation, to achieve higher efficiency of expanded  operations
  
  Singapore, 12 May 2014 &ndash Leading global industrial fishing company, China Fishery Group Limited (" China Fishery"   or the " Group" ) (SGX: B0Z.SI),  today reported a 20.1% year-on- year (y-o-y) increase in revenue for the six months ended 28 March 2014 (" 1HFY2014" ).
  
  Financial Highlights

Commenting on the Group&rsquo s outlook, Mr. Ng Joo Siang, Group Managing Director,  said: " For the immediate future, we are focused on consolidation, and increasing the efficiency and effectiveness of our expanded operations. In particular, we are in the process of ensuring that we extract the full benefit of synergies and efficiencies as we integrate our operations in Peru. I' m pleased that we have completed the privatisation of Copeinca as this offers greater flexibility for the Group to realise these synergies."

" In addition, the successful completion of the refinancing of the Group' s bridge loan into a 4- year term loan has improved our credit profile. We are committed to improving the Group' s gearing over the next two years,"   Mr Ng added.

Revenue by Business Segments

Revenue from the Peruvian Fishmeal Operations increased by 5.4 times from US$31.8 million to US$203.5 million, reflecting contribution from Copeinca and a significant increase in the TAC of Peruvian anchovy for the 2013 second fishing season.

Revenue from the Contract Supply Business decreased by 53.5% from US$226.4 million to US$105.3 million, due mainly to the lower sales volume following the termination and non- renewal of the Long Term Supply Agreements (" LSAs" ). Although following the termination of the LSAs, the Group participated in the spot market, the Group did not trade on occasions when the spot prices of certain products were unfavourable.

Revenue from the China Fishery Fleet increased by 29.2% from US$12.7 million to US$16.3 million, due to contributions from fishing operations in Namibia established since 2QFY2013.

Outlook for 3QFY2014

The Peruvian Government has set the TAC for its 2014 first anchovy season at 2.53 million tons, a 23.4% increase from the 2.05 million tons for the same fishing season last year. The first fishing season started on 23 April 2014 and will run until the end of July 2014.

Management remains committed to the consolidation of the Group' s operations, reduction in its gearing and sustaining its profitable growth. In addition, the return of prepayments from the Contract Supply Business will be used to help reduce outstanding debt.

About China Fishery Group Limited

Listed on the Mainboard of Singapore Stock Exchange since 2006, China Fishery is a global integrated industrial fishing company with access to fish in some of the world' s most important fishing grounds, including the Anchovy fishery in Peru. Employing the latest catch and processing solutions, China Fishery sources, harvests, onboard-processes and delivers high quality catch to consumers around the world.

China Fishery is also one of the world' s leading producers of fishmeal and fish oil through its processing plants located strategically along Peru' s coastal areas.