The strain of COVID-19 restrictions dragged down the earnings of Chinese seafood importer and shellfish farmer Zoneco last year.
Earlier this week, Dalian, China-based Zoneco reported revenues from its trading business fell 40 percent in 2020, though cheaper imported inputs for its processing business helped mitigate that damage.
According to Zoneco’s 2020 annual financial report, overall company revenues dropped 29.4 percent to CNY 1.9 billion (USD 285 million, EUR 247 million) in 2020, while profits rose by 103 percent to CNY 14 million (USD 2.1 million, EUR 1.8 million) thanks to sales of subsidiary companies and sea-use rights, as well as cheaper imports. However, Zoneco’s downsizing of its sea-use rights were limited by the company’s use of them as collateral for its debt. Zoneco’s seafood processing revenues fell 27 percent year-on-year and its cold-chain earnings fell 65 percent.
Zoneco’s results reflect a difficult year for Chinese seafood traders, as the country’s seafood imports fell by 20 percent in 2020 due to a combination of weaker demand, higher freight costs, and restrictive customs testing after authorities said they found traces of COVID-19 on imported seafood packaging.
Once China’s leading listed seafood company by market capitalization, Zoneco has faced a string of environmental setbacks and punishment from China’s stock market regulator for inaccurate filings on its aquaculture reserves. Zoneco’s troubles started in 2014, when the firm booked huge losses on what is said was a die-off of its marine shellfish stocks due to extreme temperatures. The company has subsequently faced a string of legal cases brought by investors.
In an interview with a popular Chinese online investor chat portal recently, representatives of Zoneco’s management group said the company may seek earnings from carbon offsets. The company is looking into ways in which it might be able to profit from carbon-trading schemes that could place a value on the carbon dioxide stored in the large tracts of ocean which it uses for shellfish and sea cucumber farming.
Photo courtesy of Zoneco
