Company to Hold Conference Call on Thursday, March 15, 2018, at 8:30 AM ET
FUZHOU, China, March 14, 2018 /PRNewswire/ -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME) ("Pingtan" or the "Company"), a global fishing company based in the People's Republic of China (PRC), today announced financial results for its fourth quarter and year-ended December 31, 2017.
The Company's recent notable events are as follows:
- January 24, 2018: The Company announced a cash dividend of $0.01 per share of common stock outstanding, which was paid on February 15, 2018 to shareholders of record on February 6, 2018. This marked the thirteenth consecutive quarterly dividend paid by the Company.
- January 10, 2018: The Company announced that an additional two fishing vessels are operating in international waters. These two squid jigging vessels departed from port on December 2, 2017 and were put into operation after arrival at their fishing destination in the international waters of South-West Atlantic Ocean on January 10, 2018 China Standard Time.
- January 4, 2018: The Company entered into the e-commerce consumer food market by offering its fish products on JD.com, one of China's largest e-commerce retailers. The Company has first launched three of its fish products including pomfret, yellow croaker and ribbon fish cuts on JD.com, and it expects to launch more products in the future.
- December 13, 2017: The Company held its Annual Shareholder Meeting at Pingtan Marine's headquarters in Fuzhou, China.
- November 15, 2017: The Company announced a cash dividend of $0.01 per share of common stock outstanding, which was paid on December 15, 2017 to shareholders of record on November 30, 2017. This marked the twelfth consecutive quarterly dividend paid by the Company.
Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We delivered strong operating and financial results in 2017 despite the impact from the Indonesian government's moratorium and subsequent actions on our fishing operations in Indonesian waters. We were dedicated to enlarging fishing territories and increasing production capacity and product mix through expanding operating vessels in various fishing methods to harvest higher margin fishing products. During the year, we have been paying close attention to any new changes and trends in fishing policy and have been actively exploring for new locations to deploy our vessels. Since the second quarter of 2017, we have started partnerships with major chain restaurants and one of China's largest e-commerce retailers, JD.com. After months of efforts from both the JD and Pingtan teams, we have successfully launched three of our fish products online. As to date, we have made record online sales of over 10,000 pieces, capturing the attention of e-commerce customers. Our online success has motivated us to seek to launch more products in the future. Looking forward, we intend to accelerate the construction of our processing facilities and expand our territory to enrich product mix and expand our market share through online retail businesses."
Factors Affecting Pingtan's Results of Operation – Indonesia Moratorium
As previously disclosed in our Forms 10-K and 10-Q filed during 2015 and 2016, in early December 2014 the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country's Ministry of Maritime Affairs and Fisheries ("MMAF") could combat illegal fishing and rectify ocean fishing order. In February 2015, the Company ceased all fishing operations in Indonesia. During the moratorium, the Company was informed that fishing licenses of four vessels operated through PT. Avona, one of the local companies through which Pingtan conducts business in Indonesia, and the fishery business license of PT. Dwikarya, the other local company through which Pingtan conducts business in Indonesia, were revoked. As a result, and because license renewal was prohibited due to the general moratorium, all local fishing licenses of the Company's vessels in Indonesia are presently inactive. The MMAF has not yet restored license issuing or renewal process for vessels built abroad.
In November 2015, the Indonesian government announced that the moratorium had concluded. As the MMAF has not implemented new fishing policies and resumed the license renewal process, the Company does not know when exactly licensing and renewal will start. Since the Company derived a majority of its revenue from this area, this ban has caused a significant drop in production.
In September 2017, the Company was informed that the fishing licenses of 13 vessels deployed to the Indo-Pacific waters were suspended and the vessels were docked in the port by the Ministry of Agriculture and Fisheries ("MAF") of the Democratic Republic of Timor-Leste. The MAF is alleging and is investigating whether false statements were made during the licensing process and the vessels were simultaneously registered in Indonesia. The Company disputes these allegations.
As of December 31, 2017, among the Company's 140 vessels, 12 are located in the Bay of Bengal in India; 11 are located in international waters (including 1 refrigerated transport vessel); and 13 are located in the Democratic Republic of Timor-Leste but are currently not operating as described above. The remaining 104 vessels are located in Indonesian waters and continue to be idle due to the Indonesian government's moratorium and subsequent actions.
Financial Highlights (all results are compared to prior year)
- Revenue increased by 207.7% to $63.2 million from $20.5 million as a result of increase in fishing activities.
- Gross profit increased by 351.3% to $22.1 million from gross loss of $8.8 million, and gross margin was 34.9% compared to (42.8)%.
- Net income attributable to owners of the Company was $29.7 million, or $0.38 per basic and diluted share, compared to net loss attributable to owners of the Company of $13.7 million, or $(0.17) per basic and diluted share.
Fourth Quarter 2017 Financial Highlights (all results are compared to prior year period)
- Revenue was $16.4 million compared to $13.2 million.
- Gross profit was $12.2 million compared to $9.9 million, and gross margin was 74.5% compared to 75.1%.
- Net income attributable to owners of the Company was $4.8 million, or $0.06 per basic and diluted share, compared to net income attributable to owners of the Company of $8.4 million, or $0.11 per basic and diluted share.
Pingtan's Revenue Break-down By PRC Territories
2017 Selected Financial Highlights
Balance Sheet Highlights
Consolidated Financial and Operating Review
Revenue for the three months ended December 31, 2017 was $16.4 million compared to $13.2 million for the same period in 2016. The increase was mainly attributable to business expansion resulting from more fishing vessels put into operation.
For the year ended December 31, 2017, the Company's revenue was $63.2 million, increasing by 207.7% from $20.5 million for the year ended December 31, 2016. The increase was primarily due to the increase in fishing activities. During the year ended December 31, 2017, the Company purchased 4 squid jigging vessels to reinforce its fishing capacity and placed 10 fishing vessels in operation in international waters during the year ended December 31, 2017 in comparison to 2 fishing vessels operating in international waters during the year ended December 31, 2016.
The Company's gross margin was 74.5% for the three months ended December 31, 2017, compared to 75.1% in the prior year period.
The Company's gross margin was 34.9% in the fiscal year ended December 31, 2017 compared to (42.8)% in the same period of 2016. The increase was due to the increase in our sales revenue and the decrease in unit production cost of fish.
For the three months ended December 31, 2017, selling expense was $0.5 million compared to $0.7 million in the prior year period.
For the year ended December 31, 2017, total selling expense was $1.2 million, remaining unchanged as that of the same period of 2016.
General & Administrative Expenses
For the three months ended December 31, 2017, general and administrative expense was $6.3 million, compared to $0.9 million in the prior year period. The increment is due to depreciation of 104 vessels located in Indonesia but not operating as a result of the moratorium mentioned, which was recorded as operation expense rather than cost of revenue.
For the fiscal year ended December 31, 2017, total general and administrative expense was $9.6 million compared to $4.0 million in the same period of 2016. The increase was primarily due to increase in depreciation expense, professional fees and travel for investor conferences, as well as bad debt recovery based on periodic review of accounts receivable balances and management's evaluation of the collectability of receivable balances.
Net Income (Loss)
Net income attributable to owners of the Company for the three months ended December 31, 2017 was $4.8 million, or $0.06 per basic and diluted share, compared to net income attributable to owners of the Company of $8.4 million, or $0.11 per basic and diluted share, in the same period of 2016. The decrease was mainly due to management's sales policy since 2018 Lunar New Year is in February, which is the peak season for the seafood sales in China.
Net income attributable to owners of the Company for the year ended December 31, 2017 was $29.7 million, or 0.38 per basic and diluted share, compared to net loss attributable to owners of the Company of $13.7 million, or $(0.17) per basic and diluted share, in the same period of 2016. The increase was due to increase of fishing vessels operating in international waters as described above.
Conference Call Details
Pingtan also announced that it will discuss financial results in a conference call Thursday, March 15, 2018 – 8:30 a.m. ET.
The dial-in numbers are:
Live Participant Dial In (Toll Free): 877-407-0310
Live Participant Dial In (International): 201-493-6786
To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page or go to: http://ptmarine.equisolvewebcast.com/q4-2017 . This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.
Pingtan is a global fishing company engaging in ocean fishing through its subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing.
Business Risks and Forward-Looking Statements
This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions, or the negative of those expressions, may identify forward-looking statements. Although forward-looking statements reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; locating or re-locating vessels, in foreign waters and related license requirements; our ability to successfully manage relationships with customers, distributors and other important relationships; actions taken by government regulators, such as the Indonesian moratorium, technological changes; competition; demand for our products and services; the deterioration of general economic conditions, whether internationally, nationally or in the local markets in which we operate; legislative or regulatory changes that may adversely affect our business; operational, mechanical, climatic or other unanticipated issues that adversely affect the production capacity of the Company's fishing vessels and their ability to generate expected annual revenue and net income; and other risk factors contained in Pingtan's SEC filings available at www.sec.gov , including Pingtan's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
Pingtan Marine Enterprise Ltd.
Tel: +86 591 8727 1753
IR Deputy Manager
Pingtan Marine Enterprise Ltd.
Tel: +86 591 8727 1753
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Katherine Yao, Senior Associate
Tel: +86 10 6587 6435
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SOURCE Pingtan Marine Enterprise Ltd.