• Revenue increased by 4.5 per cent to 31.6 million Euros
  • Still attractive EBIT margin of 10.4 per cent
  • Cautiously optimistic outlook for 2015

Frankfurt am Main, May 29, 2015 - In the first quarter 2015 the already difficult business environment for Chinese Seafood processing companies became even more challenging and Haikui Seafood was not immune to these adverse effects. But nonetheless Haikui Seafood achieved a still attractive double-digit EBIT margin and continues to maintain a strong financial position.

As already anticipated in the annual report 2014 of Haikui Seafood, the operating environment particularly for export-oriented seafood processors became even more challenging in the first quarter of 2015 and put further pressure on their results, especially the profit margins. Although revenue of Haikui Seafood increased by 4.5 per cent to 31.6 million Euros (Q1 2014: 30.2 million Euros) due to foreign exchange translation, revenue measured in its functional currency RMB decreased by 13.7 per cent. This decrease was mainly caused by lower sales orders arising from higher selling prices and the keen competition.

With regard to the two product segments of Haikui Seafood, revenue improved in both segments in Euro terms: While revenue for frozen products increased by 0.6 per cent to 24.8 million Euros (Q1 2014: 24.6 million Euros), revenue in the canned products segment went up by 21.8 per cent to 6.8 million Euros (Q1 2014: 5.6 million Euros).

Increased costs put pressure on profit margins, but still strong financial position
Higher cost of sales 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 5.0 million Euros (Q1 2014: 6.5 million Euros). Gross profit margin went down by 5.7 percentage points to 15.7 per cent (Q1 2014: 21.4 per cent). Mainly due to lower gross profit, EBIT declined by 36.1 per cent to 3.3 million Euros (Q1 2014: 5.1 million Euros), translating into an EBIT margin of 10.4 per cent (Q1 2014: 17.0 per cent). Net profit amounted to 2.4 million Euros (Q1 2014: 4.1 million Euros), which corresponds to a net profit margin of 7.7 per cent (Q1 2014: 13.7 per cent). Notwithstanding the decline in results, Haikui Seafood considers its EBIT and net profit margins still as attractive given the adverse market circumstances.

Despite the challenging market environment and the keen industry competition, Haikui Seafood's financial position remains comfortable with a year-on-year increase in equity of 13.9 per cent to 212.4 million Euros as of March 31, 2015 (December 31, 2014: 186.6 million Euros). The equity ratio increased from 95.0 per cent as of December 31, 2014 to 95.6 per cent as of March 31, 2015.

Outlook for full-year 2015 maintained
Looking ahead to the full-year 2015, the management of Haikui Seafood largely maintains the expectations announced in the Annual Report 2014. 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 expected to persist well into the year and will continue to impact the business development of Chinese seafood processing companies.

Based on these assumptions, the management expects revenue in RMB terms for 2015 to increase by around 5 per cent compared to 2014, while revenue in RMB terms for the first half-year 2015 is expected to be lower compared to the first half-year 2014. EBIT margin is expected to be in a range between 8 and 10 per cent.

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. The construction of the new factory in Dongshan, which is partially financed by the bank loan of 25 million US Dollar granted by DEG, is proceeding as planned. During the first quarter of 2015, Haikui Seafood made further investments of 8.6 million Euros. Haikui Seafood plans a second draw down of the DEG loan in the third quarter 2015. The full draw down of the loan shall be completed by the end of the third quarter 2015. The completion of the new factory is targeted for mid 2016 with first contributions also expected in 2016.

The full first quarterly report of Haikui Seafood is available on the company's website under the following link: http://www.haikui-seafood.com/investor-relations/publications/reports/


About Haikui Seafood AG
Haikui Seafood processes fish and seafood for the Chinese and international markets. Its products range includes frozen or canned fish and seafood, produced from a large variety of species of raw fish and seafood, including prawn, crab, various fish species and shellfish as well as cephalopods. Clients of Haikui Seafood are distributors in China and overseas, located mainly in Asia, the U.S. and Europe. Haikui Seafood employs 657 permanent employees and 755 additional temporary workers as of March 31, 2015. The company has an annual processing capacity of more than 34,000 tonnes (output). The processing facilities are located in the South-East of China on Dongshan Island, Zhangzhou, Fujian Province. Haikui Seafood operates a streamlined supply chain including self-owned processing facilities, in-house research and product development capacities as well as warehousing and cold storage facilities while simultaneously cooperating closely with raw goods suppliers.


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