Qian Hu Corporation, the Mainboard-listed integrated ornamental fish service provider, says it posted a net profit fell 64.8% year-on-year for the fourth quarter ending Dec 31 (4Q2010).

Group revenue dipped 6.8% to $22.2 million with Ornamental Fish sales declining 8.8% y-o-y to $10.2 million, Accessories by 7.4% to $9.1 million while Plastics grew 2.7% to $2.9 million.

The reduction in the supply of self-bred Dragon Fish had affected the group’s profitability. There was also higher bad debt provision of $182,000 compared to $60,000 provision in 4Q2009.

For the full year FY2010, Qian Hu achieved full-year net profit attributable to shareholders of $4.2 million for the year ended 31 December 2010 on sales of $91.2 million.

During the year in review, sales of the group’s core Ornamental Fish business dipped 3.9% to $45.2 million as production of self-bred Dragon Fish were affected by unusually dry weather in Singapore and Malaysia in the first four months of the year.

Unusually heavy snowfall in North America and Europe also affected export deliveries due to the widespread airport closures and flight cancellations in December.

In addition, the anticipated curbs in government spending in Europe also contributed to the weaker demand from its European markets, which accounts for more than 20% of Qian Hu’s ornamental fish revenue.

The sluggish European economy had similarly affected production orders from its OEM customers for the group’s Accessories segment which saw full-year sales declining by 7.0% to $34.4 million.

The group is utilising surplus capacity at its Guangzhou plant for the production of its revolutionary Hydro-Pure filtration system which is able to improve water quality by as much as 50%. This new product is expected to boost the performance of the Accessories segment in FY2011.

In a bid to hedge against the challenging European market, Qian Hu’s Guangzhou plant will also increase its production for sales to the China domestic market in the coming quarters.

The group’s Plastics segment continued to be steady, with sales jumping 9.1% to $11.6 million.

The directors are proposing a first and final dividend of 0.5 cents per ordinary share which will be paid out on 8 April 2011 if approved.