Ornamental and edible fish breeder Qian Hu reported on Friday that its fourth quarter net profit tumbled 63.5 percent on-year to S$46,000, dented by a dragon fish price war.
Revenue for the quarter ended 31 December fell 6.2 percent on-year to S$20.67 million as sales of fish and accessories declined, it said in a filing to SGX after the market close on Friday.
Fish sales fell 13.2 percent on-year to S$7.6 million in the quarter, amid intense price competition in the dragon fish segment, Qian Hu said, but added that its new aquaculture business in Hainan contributed positively. The segment’s operating profit dropped 71.2 percent on-year to S$70,000, it said.
The accessories segment saw a 6.3 percent on-year decline in sales to S$9.8 million for the quarter amid efforts to streamline the segment’s operations in China, resulting in the disposal of a Shanghai subsidiary. The segment’s operating profit rose 8.8 percent on-year to S$447,000 in the quarter, it said.
Plastics sales rose 15.3 percent on-year to S$3.3 million for the quarter on a larger customer base and a greater product variety sold during the quarter, Qian Hu said. The segment’s operating profit slipped 4.1 percent on-year to S$236,000 in the quarter on higher operational costs, it said.
For the full year, net profit rose 22.2 percent on-year to S$402,000, while revenue slipped 2.5 percent on-year to S$85.67 million, it said.
Qian Hu declared a final dividend of 0.2 Singapore cent, on par with the year-ago dividend.
Dragon fish price war
Kenny Yap, executive chairman and managing director, pointed toward efforts to counter the dragon fish price war, which he said was mainly in the silver albino variety, which isn’t protected by CITES.
CITES is the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which is intended to prevent trade in wild animals from threatening their survival.
“We continue to be optimistic and confident about the future of our dragon fish business and will continue to invest in R&D to develop a whole new range of albino Dragon Fish that are CITES-protected and therefore more rare and more difficult to breed,” Yap said. “In addition, we will develop several other species and varieties of albino ornamental fish.”
He also pointed to growth in the new aquaculture business, which accounted for 2.9 percent of the total fish revenue and 9.3 percent of the fish profit after tax for the full year.
Yap said the company planned to develop an aquaculture farm across the edible fish and seafood value chain, including breeding, farming and reaching the table. Qian Hu currently farms edible fish fingerlings to marketable sizes, but it expects to expand its products, it said.