Pacific Andes FY2010 net profit up 10.5%

The frozen fish supplier’s revenue for the year fell 2.3% to HKD 7.4 billion (€713.4 million/$953.7 million).

Its higher profitability was driven by a higher contribution from the group’s fishing division, which achieved 11% growth in revenue from HKD 3.8 billion (€366.3 million/$489.7 million) to HKD 4.2 billion (€404.9 million/$541.3 million).

This increase was mainly driven by higher selling prices for fishmeal, higher catch volume in the North Pacific trawling operation and the first full year revenue contribution from the South Pacific operation.

The fishing division contributed 56.6% of total revenue.

Pacific Andes said it is optimistic that catch results in its new South Pacific operations will improve in 2011 and will consider buying new catcher vessels to improve the efficiency of the factory vessel.

It also expects the higher Peruvian quota share arising from the acquisition of two Peruvian fishing companies in May to raise the group's production of fishmeal and fish oil.

Its North Pacific operation is benefitting from a higher total allowable catch, and the management is confident of fully utilising its increased quota in 2010 and 2011, the group said.

Sales from the frozen fish supply chain management (Frozen Fish SCM) division, which contributed 43.4% of the group’s revenue, softened by 15.5% from HKD 3.8 billion to HKD 3.2 billion (€308.5 million/$412.4 million).

The decrease in revenue was mainly due to lower product selling prices for the group’s major fish products arising from increased total supply from the North Pacific, and lower sales volumes due to a temporary shipment delay in the fourth quarter of the financial year.

During the year, the group continued to pursue cost efficiencies and acquired two transportation vessels to lower its cost of transportation and to reduce reliance on third-party chartered vessels, thereby increasing delivery efficiency.

Geographically, the PRC remained the group’s most significant market, accounting for HKD 5.8 billion (€599.2 million/$747.5 million) or 78.7% of total revenue, followed by East Asia which accounted for HKD 670.8 million (€64.7 million/$86.4 million) or 9% of total revenue.

Commenting on the group’s results, executive director and chairman Ng Joo Siang said: “We are pleased to report another year of improved profit margins. We continue to be positive about the growth potential of both our fishing division and frozen fish SCM division for FY2011.

“The global demand for fish looks set to continue growing in line with rising affluence, increasing population and rising health consciousness against a backdrop of limited supply. Our acquisitions as well as China Fishery’s $150 million (€112.2 million) placement to the Carlyle Group during the year have placed us in a better position than ever to capitalise on the positive market opportunities and deliver sustained profitability for the financial year ahead.”