One of China’s leading fishing companies has flagged disappointing results for 2020.
CNFC Overseas Fishery Co Ltd, the listed arm of China National Fisheries Co, is projecting a loss of between CNY 145 million (USD 21.7 million, EUR 18.8 million) and CNY 155 million (USD 23.2 million, EUR 20.1 million) for 2020, a slump it’s blaming on lower prices for its tuna and squid products, as well as smaller subsidies from the state government
Investors have driven up CNFC’s share price in recent months, betting on rising demand for seafood amid restrictions on foreign imports due to COVID-19 checks.
CNFC’s share price went from CNY 6.37 (USD 0.95, EUR 0.82) on 15 January, 2020, to CNY 14.20 (USD 1.84, EUR 2.13) as of 6 January, 2021, before falling back to CNY 9.11 (USD 1.36, EUR 1.18) on 15 January after the company made public its disappointing results forecast.
The share price fall could complicate CNFC’s plans – announced in December 2020 – to raise CNY 400 million (USD 60 million, EUR 52 million) to invest in the construction of new tuna vessels and enlarge its processing capacity.
In the meantime, CNFC has taken a one-year, CNY 500 million (USD 75 million, EUR 65 million) loan from its parent company, China National Agriculture Development Group, to cover cash flow shortages. It will pay four percent interest on the loan, according to the company.
CNFC has relied on subsidies for fuel and vessel renovation to turn a profit in recent years. Ventures into distribution and imports of premium products have struggled as the company competes against more nimble online retailers. CNFC Overseas Fishery Co. reported a 40-percent drop in revenue for the first three quarters of 2020, to CNY 265.73 million (USD 39.8 million, EUR 34.5 million).
The company reported a loss of CNY 55.79 million (USD 8.35 million, EUR 7.24 million) for the period – a 548.9 percent slump on its figures for the same period in 2019. The company blamed weaker consumer demand for tuna and other products it catches, and said its subsidies had dropped by CNY 15.3 million (USD 2.3 million, EUR 2 million).
Photo courtesy of CNFC
