Iconic ornamental fish breeder Qian Hu reported on Wednesday its net profit for the first quarter rose 5.7 percent on-year to S$37,000 despite continued fierce competition in the dragon fish segment.
Revenue fell 12.8 percent on-year in the quarter ended 31 March to S$18.85 million, the company said in a filing to SGX after the market close on Wednesday.
Dragon fish sales remained depressed amid intense price competition, while the China accessories operations were undergoing restructuring, Qian Hu said.
“We envisage that the selling prices of dragon fish may stabilize toward the first half of FY2019,” Kenny Yap, executive chairman and managing director of Qian Hu, said in the statement.
“Coupled with our focused efforts on growing the aquaculture business in Hainan, which continues to bring in contributions to the group, we expect the revenue and profitability of the group’s fish business would gradually revive in the coming quarters,” he added.
The fish segment, including ornamental fish and edible fingerlings, saw revenue fall 11.5 percent on-year in the quarter to S$8.4 million, with the dragon fish price war partly offset by improved sales from the new aquaculture business in Hainan and efforts to increase ornamental fish exports, the filing said.
Operating profit for the segment fell 35.1 percent on-year to S$237,000, it said.
In the accessories segment, revenue fell 20.1 percent to S$7.61 million as the group trimmed costs and improved its inventory and logistics management in China, and disposed of its Shanghai subsidiary, Qian Hu said.
“In addition, demand for its accessories exports was weakened by its customers being more cautious and vigilant in their procurement requirements, citing the volatility of trading currencies, and continued trade tensions between the U.S. and China,” Qian Hu said.
But operating profit for the accessories segment rose 3.5 percent on-year to S$321,000 on a different sales mix and a focus on marketing higher-margin proprietary products, Qian Hu said.
The plastics segment posted a 9.3 percent on-year increase in revenue for the quarter to S$2.86 million on a larger customer base and more varieties of products, while operating profit climbed 23 percent on-year to S$219,000, the filing said.