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AGRIBUSINESS | Tony Chua, Hong Kong
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Pacific Andes Singapore units’ third quarter profits post gains

PARD profit up by 17% to HK$254.8mn while China Fisheries’ profit grew 5% to HK$291.7mn.

Leading international frozen seafood supplier Pacific Andes International Holdings Limited (“Pacific Andes”) on Wednesday announced the results for third quarter (“3QFY2011”) and nine months (“9MFY2011”) of its Singapore-listed subsidiary, Pacific Andes Resources Development Limited (“PARD”) and China Fishery Group Limited (“China Fishery”), a subsidiary of PARD, for the financial year ending 28 September 2011.

In 3QFY2011, PARD recorded revenue growth of 32.5% to HK$2,965.4 million on the back of stronger contributions from both the frozen fish supply chain management (“frozen fish SCM”) and fishing divisions. Gross profit increased by 19.0% to HK$698.0 million in tandem with higher revenue. Earnings before interest, tax, depreciation and amortisation (“EBITDA”) up 25.7% to HK$750.3 million and net profit attributable to owners of the Company was up by 17.0% to HK$254.8 million.

Revenue from the frozen fish SCM division was up by 49.1% to HK$1,483.2 million following stronger sales in the People’s Republic of China (“PRC”) and Africa. Revenue from the fishing division increased by 19.2% to HK$1,482.2 million following stronger revenue contribution from the Peruvian fishmeal operations and the factory vessel fleet.

In 9MFY2011, PARD recorded revenue growth of 14.8% to HK$7,153.5 million. Gross profit increased by 9.8% to HK$1,695.0 million. EBITDA increased by 12.6% to HK$1,810.6 million. Net profit attributable to owners of the Company decreased by 5.6% to HK$626.4 million due mainly to lower net profit contribution from the fishing division as a result of the dilution effect after a share placement by China Fishery Group Limited in July 2010.

In 3QFY2011, revenue of China Fishery grew 19.2% to US$190.0 million (HK$1,482.0 million) and gross profit increased by 18.1% to US$73.4 million (HK$572.5 million) despite an increase in cost of sales and vessel operating cost. Net profit was increased by 5.0% to US$37.4 million (HK$291.7 million).

Revenue from the Peruvian fishmeal operations rose significantly by 79.6% to US$80.5 million (HK$627.9million) as a result of an increase in sales volume of fishmeal and fish oil. The jump in sales volume was due mainly to 2 factors: firstly, a higher total allowable catch for the first fishing season in 2011 compared to 2010; and secondly, higher inventory carried forward for sale from 2QFY2011, according to a Pacific Andes report.

China Fishery has fully utilised its fishing quota for the first fishing season in 2011. The catch volume of Peruvian Anchovy up 56.6% from 139,429 MT to 218,274 MT. Production volume of fishmeal and fish oil rose from 51,108 MT to 76,825 MT in line with the higher catch volume.

Revenue from the trawling operations benefited from increased contribution from the factory vessel fleet.

In 3QFY2011, revenue contribution from the factory vessel fleet increased by 193.9% to US$19.7 million (HK$153.7 million) following moves by the China Fishery to maximise the utilisation of the fleet by deploying two fishing vessels to operate in the South Pacific in 3QFY2011 whilst the remaining fleet continued to operate in the North Atlantic Ocean. The North Pacific trawling operations recorded a 16.7% decrease in revenue to US$89.9 million (HK$701.2 million) due mainly to lower sales volume.

For the 9MFY2011, revenue of China Fishery was up by 12.7% to US$490.0 million (HK$3,822.0 million) and gross profit rose 8.6% to US$181.7 million (HK$1,417.3million) in line with the higher revenue. Net profit also grew 2.1% to US$102.9 million (HK$802.6 million).

Outlook
Commenting on the outlook of PARD and China Fishery, Mr. Ng Joo Siang, Vice Chairman and Managing Director of Pacific Andes said, “With the persistent strong demand for fishmeal in the PRC market, we expect fishmeal and fish oil price to remain strong. We intend to capitalize on this by releasing the significantly high fishmeal and fish oil inventory in the next quarter. Our frozen fish SCM division is also rapidly expanding its business in the African market, with sales to the region recording a year-on-year growth from HK$62.4 million to HK$467.9 million. Propelled by growing demand for frozen fish in Africa, we expect its sales to Africa to grow further.”

“With continuing strong demand for our fish products, as well as our commitment to continue to search for new and sustainable fishing grounds with rich resources, we believe that the Group is well positioned to sustain long term growth and deliver positive results for the current financial year,” Mr. Ng concluded.

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