Pacific Andes first half profit down 31.7% to HK$228.5mn

The company continues to pursue organic business growth and acquisition opportunities to further extend value chain.

Leading international frozen seafood supplier Pacific Andes International Holdings Limited (“Pacific Andes”), announced on Thursday its interim results for the six months ended 28 March 2011 (“1HFY2011”), according to a Pacific Andes report.

During the period under review, total revenue increased by 6.9% to HK$6,620.7 million (US$848.8 million) with revenue growth in all of the Group’s divisions. Gross profit grew by 6.2% to HK$1,290.2 million (US$165.4 million) while gross profit margin went down slightly from 19.7% to 19.5%, mainly reflecting (i) higher processing cost in Peru due to lowered production volume of fishmeal and fish oil, (ii) the delay in product delivery to Japan after the earthquake, (iii) higher vessel operating cost in relation to increased fuel cost, and (iv) higher labour costs in the PRC. Profit for the period decreased by 12.5% to HK$587.7 million (US$75.4 million). Profit attributable to owners of the Company decreased by 31.7% to HK$228.5 million (US$29.3 million), mainly due to the enlarged equity base of China Fishery Group Limited (“China Fishery”). Basic earnings per share were HK7.5 cents (1HFY2010: HK11.2 cents).

Outlook

Looking ahead, Mr. Ng Joo Siang, Vice-Chairman and Managing Director of Pacific Andes, said, “Our fishing division is expected to benefit from higher catch volume in both North Pacific and Peru. In Peru, the total allowable catch limit of Peruvian Anchovy has increased from 2.50 million tonnes to 3.68 million tonnes in the main fishing season that commenced in April 2011.

With the Group’s daily catch volume in Peru averaging approximately 3,400 tonnes / day since April 2011, versus 930 tonnes / day in the last 2 quarters, we believe that the El Nino and La Nina effects in Peru are now behind us, and thus, barring unforeseen circumstances, the Group is expected to be able to fully utilise its quota share.”

“The strategic investment in Tassal represents an entirely new and exciting opportunity for the Group’s frozen fish SCM business. This investment provides PARD with a platform to venture into the fast-growing salmon aquaculture industry and to diversify its product portfolio, which will better position PARD for the next stage of growth.”

“The processing and distribution division will continue its efforts in optimizing the processing capacity and efficiency in the PRC through increasing output and enhancing its capabilities of processing value-added and ready-made products targeting the fast developing domestic PRC market. It will also further develop and expand its downstream processing and distribution business in all continents.”

“We remain positive about the growth potential of all our business divisions. While striving to ensure a healthy organic business growth, we see numerous opportunities for consolidation within the global industry with attractive opportunities for acquisition. We will continue to search for such opportunities in order to continue its growth, and to further extend its value chain.” Mr. Ng concluded.