Pingtan Marine Enterprise Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2017 – iCrowdNewswire
 
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Nov 9, 2017 6:10 AM ET

Pingtan Marine Enterprise Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2017

Disclosure NewswireTM

iCrowdNewswire - Nov 9, 2017

Company Reports Third Quarter EPS of $ 0.08

Company to Hold Conference Call on Thursday, November 9, 2017, at 8:30 AM ET

FUZHOU, China — 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 its unauditedfinancial results for the third quarter and nine months ended September 30, 2017.

 

The Company’s recent notable events are as follows:

  • July 14, 2017: The Company announced a quarterly cash dividend of $0.01 per ordinary share outstanding, payable in cash on or about August 15, 2017 to shareholders of record on July 31, 2017.  This marks the eleventh consecutive quarterly dividend paid by Pingtan. The Company intends to continue paying a cash dividend on a quarterly basis, and expects to adjust its quarterly dividend rate in accordance with its earnings performance.

Management Comments

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, “We were pleased to continue to deliver strong operating and financial results despite a longer summer fishing off-season during 2017, and we were still able to achieve quarter EPS of $0.08. These results are accredited to management’s dedication to expand business by increasing our operating vessels and fishing territory.  Meanwhile, our sales team continues to innovate and explore new sales channels, and secured a number of strategic cooperation agreements with major restaurant chain and e-commerce entities, including JD.com. We are now working closely with JD’s team to finalize all the preparation work to launch our fishing products online. We anticipate achieving good performance from e-commerce sales in the next report period.”

Factors Affecting Pingtan’s Results of Operation:

As previously disclosed in our Forms 10-K and 10-Q filed since 2015, in early December 2014, the Indonesian government introduced a 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, Pingtan ceased all fishing operations in Indonesian waters.  During the moratorium, PME was informed that local fishing licenses of four vessels operated through one of its local related companies PT. Avona Mina Lestari (“PT Avona”), and the fishery business license of the other local related company PT. Dwikarya Reksa Abadi (“PT Dwikarya”) were revoked.  As a result and because of the general moratorium, all local fishing licenses of PME’s vessels in Indonesia are currently inactive.  The MMAF has not yet restored the license issuance or renewal process for vessels built abroad. Since the Company derives a majority of its revenue from this area, this ban has caused a significant drop in the Company’s production.

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, we do not know when exactly licensing and renewal will start. The Company has been paying close attention to any new trends in fishing policy and has been actively exploring new cooperation models.

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.

Among the Company’s 140 vessels, 12 are located in the Bay of Bengal in India, 9 are located in international waters and 13 are located in the Indo-Pacific waters. Two squid jigging vessels finished renovation in October 2017 and will be deployed to international waters. The remaining vessels are temporarily not operating due to the moratorium discussed above.

Third Quarter 2017 Financial Highlights (all results are compared to prior year period)

  • Revenue increased 367.3% to $5.5 million from $1.2 million as a result of more fishing vessels put into operation.
  • Gross loss was $1.3 million compared to gross loss of $12.3 million, and gross margin was (23.9)% compared to (1,053.3)%.
  • Net income attributable to owners of the Company was $6.0 million, or $0.08 per basic and diluted share, compared to a net loss of $12.8 million, or $(0.16) per basic and diluted share. 

Third Quarter 2017 Selected Financial Highlights

 

($ in millions, except per share data)

Three Months ended September 30,

 

2017

2016

 

(Unaudited)

(Unaudited)

Revenue

$5.5

$1.2

Cost of Revenue

$6.8

$13.5

Gross Loss

$1.3

$12.3

Gross Margin

(23.9)%

(1,053.3)%

Net Income (Loss)

$6.5

$(13.9)

Basic and Diluted Weighted Average Shares

79.1

79.1

EPS (in $)

$0.08

$(0.16)

 

Balance Sheet Highlights

 

($ in millions, except per share data)

  

9/30/2017

(Unaudited)

12/31/2016

(Audited)

Cash and Cash Equivalents

  

$22.3

$0.8

Total Current Assets

  

$35.1

$60.8

Total Assets

  

$218.8

$226.5

Total Current Liabilities

  

$58.6

$64.9

Total Long-term Debt, net of current portion

  

$19.9

$21.9

Total Liabilities

  

$78.5

$86.8

Shareholders’ Equity

  

$140.2

$139.7

Total Liabilities and Shareholders’ Equity

  

$218.8

$226.5

Book Value Per Share (in $)

  

$1.77

$1.77

Consolidated Financial and Operating Review

Revenue

Revenue for the three months ended September 30, 2017, was $5.5 million, increasing by 367.3% from $1.2 million of the same period in 2016. The increase was mainly attributable to our business expansion resulting from more fishing vessels put into operation.

For the nine months ended September 30, 2017, the Company’s revenue was $46.8 million, increasing by 533.7% from $7.4 million in the nine months of 2016. The increase was primarily due to an increase in sales volume from business expansion, as well as an increase in average unit sale price as marine catches are in short supply resulting from a longer fishing off-season from May to August for China seas during 2017 as opposed to  June to August.

Gross Margin

The Company’s gross margin was (23.9)% for the three months ended September 30, 2017, compared to (1,053.3)% in the prior-year period. The significant increase was primarily attributable to the decrease in our unit production cost of fish resulting from the increase in our harvest volume by deploying more fishing vessels into operation.

For the nine months ended September 30, 2017, gross margin increased to 21.1% from (252.6)% in the same period of 2016. The increase was primarily attributable to the decrease in our unit production cost of fish resulting from the increase in our harvest volume by deploying more fishing vessels into operation.

Selling Expenses

Selling expenses were $0.2 million for the three months ended September 30, 2017, compared to $0.1 million in the prior-year period.

For the nine months ended September 30, 2017, selling expenses were $0.8 million, compared to $0.5 million in the same period of 2016.

General & Administrative Expenses

For the three months ended September 30, 2017, general and administrative expenses were $1.0 million, compared to $0.7 million in the prior-year period.

For the nine months ended September 30, 2017, general and administrative expenses were $3.3 million compared to $3.0 million in the same period of 2016.

Net Income/Loss

For the three months ended September 30, 2017, net income attributable to owners of the Company was $6.0 million, or $0.08 per basic and diluted share, compared to net loss attributable to owners of the Company of $12.8 million, or $(0.16) per basic and diluted share, in the same period of 2016. The increase was primarily due to the factors described above.

For the nine months ended September 30, 2017, net income attributable to owners of the Company was $24.8 million, or $0.31 per basic and diluted share, compared to net loss attributable to owners of the Company of $22.2 million, or $(0.28) per basic and diluted share, in the same period of 2016.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Thursday, November 9, 2017, at 8:30 AM 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/q3-2017 . This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.

About Pingtan

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. Such forward looking statements include, but are not limited to, Pingtan’s expectation that its continued expansions in new fishing territories would support it to solidify its position as a leading fishing company in China.   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 the ability to successfully market, sell and distribute our products online, including unanticipated delivery issues; anticipated growth and growth strategies; need for additional capital and the availability of financing; our ability to successfully manage relationships with customers, distributors and other important relationships; technological changes; competition; demand for our products and service 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, such as the Indonesian moratorium and actions taken by local countries that effect our vessels and operations; 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 revenue and net income.  In addition, please refer to the risk factors contained in Pingtan’s SEC filings available at www.sec.gov, including Pingtan’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q . Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the 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 and Definitive Proxy Statement. 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.

CONTACT:

Roy Yu 
Chief Financial Officer 
Pingtan Marine Enterprise Ltd. 
Tel: +86 591 87271753 
ryu@ptmarine.net

Johnny Zhang 
IR Manager 
Pingtan Marine Enterprise Ltd. 
Tel: +86 591 8727 1753
jzhang@ptmarine.net

Maggie Li 
IR Deputy Manager 
Pingtan Marine Enterprise Ltd. 
Tel: +86 591 8727 1753 
mli@ptmarine.net

INVESTOR RELATIONS COUNSEL:

The Equity Group Inc. 
Katherine Yao, Senior Associate 
Tel: +86 10 6587 6435 
kyao@equityny.com  

 

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(IN U.S. DOLLARS)

 
 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

September 30,

 

2017

 

2016

 

2017

 

2016

        

REVENUE

$

5,462,792

 

$

1,168,946

 

$

46,819,813

 

$

7,388,395

COST OF REVENUE

 

6,768,802

  

13,481,775

  

36,942,905

  

26,054,703

GROSS (LOSS) PROFIT

 

(1,306,010)

  

(12,312,829)

  

9,876,908

  

(18,666,308)

OPERATING EXPENSES:

           

Selling

 

194,202

  

93,843

  

761,495

  

508,062

General and administrative

 

977,603

  

660,700

  

3,325,268

  

3,038,984

Grant income

 

(9,274,101)

  

  

(22,023,741)

  

(153,514)

Loss on fixed assets disposal

 

190,162

  

  

187,709

  

Total Operating (Profit) Expenses

 

(7,912,134)

  

754,543

  

(17,749,269)

  

3,393,532

INCOME (LOSS) FROM OPERATIONS

 

6,606,124

  

(13,067,372)

  

27,626,177

  

(22,059,840)

OTHER INCOME (EXPENSE):

           

Interest income

 

20,617

  

782

  

172,043

  

4,051

Interest expense

 

(490,383)

  

(738,548)

  

(1,841,792)

  

(1,656,672)

Foreign currency transaction gain (loss)

 

396,852

  

(86,414)

  

941,734

  

(542,694)

Gain from cost method investment

 

318,125

  

  

318,125

  

378,997

Loss on equity method investment

 

(322,151)

  

(6,968)

  

(27,500)

  

(25,095)

Other expense

 

(66)

  

(59)

  

(6,331)

  

(476)

Total Other Income (Expense), net

 

(77,006)

  

(831,207)

  

(443,721)

  

(1,841,889)

INCOME (LOSS) BEFORE INCOME TAXES

 

6,529,118

  

(13,898,579)

  

27,182,456

  

(23,901,729)

INCOME TAXES

 

  

  

  

993

NET INCOME (LOSS)

$

6,529,118

 

$

(13,898,579)

 

$

27,182,456

 

$

(23,902,722)

LESS: NET INCOME (LOSS) ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

 

576,194

  

(1,075,177)

  

2,351,967

  

(1,750,492)

NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

5,952,924

 

$

(12,823,402)

 

$

24,830,489

 

$

(22,152,230)

COMPREHENSIVE INCOME (LOSS):

           

NET INCOME (LOSS)

 

6,529,118

  

(13,898,579)

  

27,182,456

  

(23,902,722)

OTHER COMPREHENSIVE INCOME (LOSS)

           

Unrealized foreign currency translation gain (loss)

 

2,138,127

  

(459,166)

  

4,821,019

  

(3,831,852)

COMPREHENSIVE INCOME (LOSS)

$

8,667,245

 

$

(14,357,745)

 

$

32,003,475

 

$

(27,734,574)

LESS: COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

 

744,763

  

(1,111,153)

  

2,732,334

  

(2,054,095)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

7,922,482

 

$

(13,246,592)

 

$

29,271,141

 

$

(25,680,479)

NET INCOME (LOSS) PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY

           

Basic and diluted

$

0.08

 

$

(0.16)

 

$

0.31

 

$

(0.28)

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

           

Basic and diluted

 

79,055,053

  

79,055,053

  

79,055,053

  

79,055,053

               

 

 

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(IN U.S. DOLLARS)

 
 

September 30,

 

December 31,

2017

2016

ASSETS

(Unaudited)

  

CURRENT ASSETS:

   

Cash

$

22,251,902

 

$

820,396

Restricted cash

 

2,320,360

  

2,911,922

Accounts receivable, net of allowance for doubtful accounts

 

5,535,370

  

11,322,726

Inventories, net of reserve for inventories

 

3,000,785

  

8,811,111

Advances to suppliers

 

939,162

  

3,969,351

Prepaid expenses

 

  

8,145

Prepaid expenses – related parties

 

776,871

  

522,337

Other receivables

 

270,115

  

31,835,456

Other receivables – related parties

 

  

639,917

Total Current Assets

 

35,094,565

  

60,841,361

      

OTHER ASSETS:

     

Cost method investment

 

3,164,128

  

3,027,245

Equity method investment

 

30,054,827

  

28,493,273

Prepayment for long-term assets

 

11,397,913

  

11,913,912

Property, plant and equipment, net

 

139,060,927

  

122,196,594

      

Total Other Assets

 

183,677,795

  

165,631,024

      

Total Assets

$

218,772,360

 

$

226,472,385

      

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

CURRENT LIABILITIES:

     

Accounts payable

$

6,872,180

 

$

916,737

Accounts payable – related parties

 

4,750,145

  

2,560,760

Short-term bank loans

 

16,600,183

  

21,554,636

Long-term bank loans – current portion

 

12,083,955

  

17,298,544

Accrued liabilities and other payables

 

5,473,686

  

4,399,536

Accrued liabilities and other payables – related party

 

9,819,942

  

18,147,152

Due to related parties

 

3,040,602

  

43,354

      

Total Current Liabilities

 

58,640,693

  

64,920,719

      

OTHER LIABILITIES:

     

Long-term bank loans – non-current portion

 

19,888,804

  

21,839,412

      

Total Liabilities

 

78,529,497

  

86,760,131

      

COMMITMENTS AND CONTINGENCIES

     

SHAREHOLDERS’ EQUITY:

     

Equity attributable to owners of the company:

     

Ordinary shares ($0.001 par value; 225,000,000 shares authorized; 79,055,053 shares issued and outstanding at June 30, 2017 and December 31, 2016)

 

79,055

  

79,055

Additional paid-in capital

 

81,906,871

  

111,008,085

Retained earnings

 

39,897,052

  

17,438,215

Statutory reserve

 

9,391,827

  

9,391,827

Accumulated other comprehensive loss

 

(8,438,399)

  

(12,879,051)

Total equity attributable to owners of the company

 

122,836,406

  

125,038,131

Non-controlling interest

 

17,406,457

  

14,674,123

      

Total Shareholders’ Equity

 

140,242,863

  

139,712,254

      

Total Liabilities and Shareholders’ Equity

$

218,772,360

 

$

226,472,385

 

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(IN U.S. DOLLARS)

 
 

For the Nine Months Ended
September 30,

 

2017

 

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

   

Net income (loss)

$

27,182,456

 

$

(23,902,722)

Adjustments to reconcile net income (loss) from operations to net cash provided by operating activities:

     

Depreciation

 

6,454,155

  

4,769,455

Increase (decrease) in allowance for doubtful accounts

 

221,209

  

(112,562)

Increase in reserve for inventories

 

2,639,816

  

1,506,320

Loss on equity method investment

 

27,500

  

25,095

Loss on disposal of fixed assets

 

194,039

  

Changes in operating assets and liabilities:

     

Accounts receivable

 

5,928,573

  

9,335,357

Inventories

 

3,421,517

  

(1,520,001)

Advances to suppliers

 

3,133,470

  

297,813

Prepaid expenses

 

8,311

  

(4,590)

Prepaid expenses – related parties

 

(225,434)

  

3,434,109

Other receivables

 

32,217,955

  

(95,068)

Other receivables – related party

 

1,180,928

  

Accounts payable

 

954,719

  

(41,081)

Accounts payable – related parties

 

2,024,366

  

(296,671)

Accrued liabilities and other payables

 

854,714

  

930,168

Accrued liabilities and other payables – related party

 

(9,886,677)

  

Due to related parties

 

14,854

  

8,709,266

      

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

76,346,471

  

3,034,888

      

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Purchase of property, plant and equipment

 

(45,292,877)

  

(959,034)

Proceeds from government grants for fishing vessels construction

 

2,941,912

  

Prepayments made for long-term assets

 

  

(44,329,098)

Proceeds from transferring equity method investment share

 

  

15,199,416

Payments for equity method investment

 

(294,191)

  

      

NET CASH USED IN INVESTING ACTIVITIES

 

(42,645,156)

  

(30,088,716)

      

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Proceeds from short-term bank loans

 

12,912,868

  

18,999,502

Repayments of short-term bank loans

 

(18,701,191)

  

(14,168,748)

Proceeds from long-term bank loans

 

  

18,999,270

Repayments of long-term bank loans

 

(8,722,769)

  

(6,216,561)

Decrease (Increase) in restricted cash

 

706,059

  

(2,538,303)

Advances from related parties

 

2,982,394

  

3,753,620

Payments made for dividend

 

(2,371,652)

  

(2,371,652)

      

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

 

(13,194,291)

  

16,457,128

      

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS

 

924,482

  

(284,053)

      

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

21,431,506

  

(10,880,753)

      

CASH AND CASH EQUIVALENTS – beginning of period

 

820,396

  

11,448,684

      

CASH AND CASH EQUIVALENTS – end of period

$

22,251,902

 

$

567,931

      

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     

Cash paid for:

     

Interest

$

1,945,560

 

$

1,976,789

Income taxes

$

 

$

993

NON-CASH INVESTING AND FINANCING ACTIVITIES:

     

Acquisition of property and equipment by decreasing prepayment for long-term assets

$

1,029,669

 

$

38,606,518

Property and equipment acquired on credit as payable

$

4,818,866

  

Offset other receivables – related parties against due to related parties

$

 

$

5,114,910

 

SOURCE Pingtan Marine Enterprise Ltd.

Contact Information:

Pingtan Marine Enterprise Ltd.

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