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Haikui Seafood achieves slight growth under more difficult market conditions

Haikui Seafood canned tuna. (Photo Credit: Haikui Seafood)

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Friday, May 29, 2015, 23:50 (GMT + 9)
Haikui Seafood achieved an increase in revenue by 4.5 per cent to EUR 31.6 million in the first quarter 2015 from the same period last year despite a more challenging business environment.
The firm’s sources informed that although the operating environment particularly for export-oriented seafood processors in China put further pressure on their results, Haikui maintained “a still attractive double-digit EBIT margin and continues to maintain a strong financial position.”
Besides, revenue from the company’s two product segment improved.
In the case of frozen products, its revenue grew by 0.6 per cent to EUR 24.8 million (Q1 2014: EUR 24.6 million) and in the canned products segment it went up by 21.8 per cent to EUR 6.8 million (Q1 2014: EUR 5.6 million).
Nevertheless, higher sales cost influenced by higher raw material and direct labour costs per unit of production resulted in a decrease of gross profit by 23.4 per cent to EUR 5 million compared to EUR 6.5 million in the same quarter last year.
Another decrease was seen in the gross profit margin, which went down to 15.7 per cent from the first quarter last year when it had been 21.4 per cent.
This decline affected the EBIT, which also fell by 36.1 per cent to EUR 3.3 million from EUR 5.1 million in the analysed period last year, translating into an EBIT margin of 10.4 per cent (Q1 2014: 17.0 per cent).
However, Haikui Seafood considers that despite the challenging market environment and the keen industry competition, its financial position remains “comfortable” with a year-on-year increase in equity of 13.9 per cent to EUR 212.4 million as of 31 March, 2015.
As to the outlook for the full-year 2015, the Chinese processor’s management forecast the on-going competitive environment amidst a weak global economy, the stringent quality expectations of end products of Chinese seafood exporters by the local authorities, the tight supply of certain raw materials and rising direct labour costs are to persist well into the year and will continue to impact the business development of Chinese seafood processing companies.
However, to better position the company to deal with the adverse market challenges and to cater to its future expansion goals, Haikui Seafood decided to build a highly efficient seafood processing plant with modern and faster equipment in Dongshan, whose completion is targeted for mid 2016.

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