Integrated fish services provider Qian Hu has reported losses of $1.45 million for FY2020 ended Dec 31, 2020, a 257.9% plunge from the $920,000 earnings it reported in the year before.

This translates to a net loss per share of 1.28 cents and a net asset value of 43.81 cents at the end of FY2020, the group reported on Jan 12. In contrast, it had reported earnings per share of 0.81 cents and a net asset value of 45.71 cents at the end of FY2019. 

Qian Hu’s performance follows a $2.0 million impairment loss incurred as revenue from Asian Arowana – a certain species of Dragon Fish which it has expertise in producing – was affected by lower production yields and declining selling prices.

The impairment “came about as a result of periodic assessment of the recoverable amounts based on expected future cash flows from our Arowana brooders,” explains Qian Hu’s executive chairman, Kenny Yap.

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Revenue for the year inched down by 2.2% to $75.2 million as its exports of ornamental, edible fish and, to a smaller extent, aquarium and pet accessories segments took a hit from the disruptions faced by global supply chains particularly in 1HFY2020.

Income from its fish segment – which is highly dependent on airfreight - was down 6.7% to $27.8 million in FY2020, no thanks to supply chain restrictions globally as well as the lockdown in China’s Hainan Province which impacted its aquaculture business.

A further decline was mitigated due to the recovery in supply chains in the second half of 2020.

Revenue from the plastics business plummeted by 30.3% to $8.1 million due to a loss of a major customer. However, Qian Hu says the segment has been seeing increased demand as plastic products have been considered essential in enhancing hygiene particularly in sectors such as healthcare and the packaging of food and beverages.

Interestingly, Qian Hu’s accessories segment expanded by 10.8% y-o-y to $39.3 million following stronger exports. It also got a boost from the consolidation of its China accessories operations as well as contributions from a newly acquired factory in Guangzhou.

Other income earned in FY2020 came in at $773,000, down 78.7% from the $3.6 million earned in the previous year.

In this time, Qian Hu’s expenses were less than in FY2019. For one its selling and distribution expenses were down 13.5% to $2.1 million, in line with the reduction in revenue contribution in FY2020.

Similarly, its finance costs were down 34.3% to $385,000 due to the lower interest rates charged by the financial institutions during the reporting period. 

As at Dec 31, Qian Hu’s cash and cash equivalents stood at $19.1 million, up from $13.9 million in the year before.

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The group has declared a first and final dividend of 0.2 cents per share, which upon approval at its annual general meeting, will be paid out on Apr 26. 

This is down from the 0.3 cents per share paid out in FY2019.

Looking ahead, Yap says the group remains focused on its core strengths and the longer-term prospects of its business.

“The key to the Group’s success lies in our continuing ability to seize long-term opportunities and correctly identify the initiatives and investments that bring value to our stakeholders. Barring unforeseen circumstances, the Group expects to grow its revenue while achieving profitability in FY2021,” he stressed.

Yap believes that the group’s aquaculture business – which is many times bigger than its core ornamental fish segment – will generate sustainable long-term growth.

Aside from this, he says the group will continue to invest in R&D to improve the product quality and reach of its accessories segment. As for its plastic segment, Yap is looking to strengthen its presence on the e-commerce market as these materials are used as packaging for courier and online deliveries.

Shares in Qian Hu closed flat at 20 cents on Jan 12, before the FY2020 results announcement.