Canned fish traded by Haiku. (Photo Credit: Haikui Seafood)

Haiku records strong decrease in profits

CHINA
Thursday, April 17, 2014, 04:00 (GMT + 9)

 Chinese seafood processors, Haikui Seafood’s revenue decreased by 39.7 per cent to EUR 117.6 million, compared to EUR 195.1 million in 2012 as a result of the challenging market environment affecting the industry in the country.

Other factors influencing this decline and leading to lower selling prices and reduced sales volumes were the keener market competition, the tighter supply of raw materials as well as the longer inspection time taken by Chinese Inspection and Quarantine Authorities on export-bound products.

Besides, the difficult external market environment especially affected the frozen products segment of the firm, which was seen as a lower sales volume of high value products such as crabs and prawn. Revenue in this segment declined by 44.9 per cent (from EUR 172.2 million in 2012 to EUR 94.8 million in 2013). Revenue for canned products also showed a slight decrease: 0.5 per cent to EUR 22.8 million (in 2012: EUR 22.9 million).

The firm reported a drop in overall gross profit by 57.8 per cent to EUR 21.2 million from EUR 50.3 million in 2012, resulting in a gross profit margin of 18.0 per cent.

Due to the lower revenue and gross margin as well as increased distribution expenses, EBIT dropped by 63.8 per cent from EUR 44.0 million in 2012 to EUR15.9 million in 2013, representing an EBIT margin of 13.6 per cent.

Besides, the net profit amounted to EUR 10.2 million, 68 per cent lower than in 2012, when it was EUR 32.2 million.

The challenging external conditions affecting the business of Haikui Seafood are expected to continue in 2014. Given the current situation and although revenue in Q1 2014 is expected to be lower compared to Q1 2013, management expects revenue in RMB terms to increase by at least 5 to 10 per cent in 2014. EBIT margin is estimated to be in the range of 11 to 13 per cent.

Haikui Seafood pursues a clear and efficient business strategy to better respond to the risks and challenges the company is faced with.

“First of all we want to increase the efficiency and productivity of our production through the construction of a new factory. After securing the land use rights and the financing for our new facility in Dongshan at the end of 2013, we have commenced works on the detailed planning. The next operational milestone will be the start of the construction work”, expressed Chen Zhenkui, Haikui Seafood CEO.

Furthermore, the company plans to increase its investments in research and development to broaden its product portfolio, especially the extraction of compounds from marine processing by-products. In addition, Haikui Seafood will continue to focus on its geographical expansion to capture market share and expand its supplier base to secure the supply of raw materials.

editorial@seafood.media
www.seafood.media

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