China Fishery

China Fishery: Reported FY11 results which was broadly in-line. Rev at US$685.5m, +27.2% yoy, while net profit at Rmb 103.7m, -11.1% yoy. Ebitda margins dropped slightly from 40.3% to 35.3% yoy. Lower yoy net profit attributed to a one-off exceptional item, excluding it net profit should have been up 5.1% yoy.

Rev was driven by contribution from grp’s Peruvian fishmeal operations and the South Pacific fleet, contributing 76.5% and 23.5% respectively to total rev respectively. Peruvian fishmeal operations benefitted from a higher production volume in FY2011, arising from an acquisition in May10 and also on back of higher ASP.

South Pacific fleet continues to be a proven success as the fleet leveraged on experience gained from last yr and benefited from Group’s strategy to diversify its fishing grounds. Rev from the North Pacific trawling operations recorded a marginal decrease in rev of 3.3% to US$374.7m due to lower sales vol that resulted from Group’s decision to delay the fishing schedule in order to enhance fleet efficiency and resources utilisation.

Going forward, grp remains confident of outlook, and expect the Group’s Peru operations to benefit from the acquisition of two Peruvian fishing Co’s in Nov this year and will also continue to identify new and sustainable fishing grounds with rich resources. Overall, grp is confident of achieving continued profitability for FY12. Grp trades at 6.4x P/E vs historical average of 12.8x.