China Fish: 1Q Rev at US$125.8m +9.3% yoy +35.6% qoq with net profit at US$23.8m +20.8% yoy, prev quarter net profit of US$781. Despite higher rev, gross profit fell 10.3% due to higher costs from prev quarter's higher priced inventory. Net profit was higher due to closure of a fishmeal plant, and higher one-off expenses in the same period last yr. On a yoy basis, sales improved due to higher sales from the North Pacific and Peruvian fishmeal operations. The increase in North Pacific was due to higher ASPs and Peruvian ops (11.3% of rev) rose 31.3% on higher sales volume despite softening fishmeal prices.
The Chinese govt has reduced duties payable on a range of commodities and food products which will have a favourable impact on co's fishery products. China currently contributes 69.4% of rev with Europe at 15.8%. Co has acquired 2 Peruvian fishing co in Nov 2011 which will increase its share of total allowable catch to 6.2% in North Peru and 11.7% in South Peru.
China Fish currently trades at 9.2x P/E and is 70% owned by Pac Andes
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