COVID-related delays in renewing fishing licenses and difficulties collecting payment from mainland Chinese clients are being cited as the primary reasons for the collapse in profits at distant-water fishing firm China Ocean Group Development Co.
China Ocean, a Bermuda-registered firm listed on the Stock Exchange of Hong Kong, announced its first-quarter revenue fell to HKD 126.9 million (USD 16.49 million, EUR 13.9 million), down from HKD 220.9 million (USD 28.7 million, EUR 24.2 million) in the same period last year. The company, which also distributes seafood to catering clients across China, recorded a loss of HKD 4.6 million (USD 596,000, EUR 506,000) compared to a profit of HKD 5.2 million (USD 676,000, EUR 572,000) in the same period last year. The company’s gross profit dropped to HKD 7 million (USD 910,000, EUR 770,000) from HKD 18.1 million (USD 2.35 million, EUR 1.9 million) in the corresponding period in 2020.
The first-quarter loss was due to “difficulties in the renewal of fishing licenses from overseas governments because fishing vessels inspection by [Chinese] officials, which is one of the prerequisite for renewal, was unable to carry out [sic] due to travel restrictions being imposed,” the company said.
The firm, which earlier this year entered a joint venture to open 30 stores across southern China, said it would seek out “alternative overseas fishing grounds,” though it didn’t state how the licensing process would be any quicker in that scenario. The firm’s management is also actively seeking for alternative procedures to complete the fishing licenses renewal, it said.
China Ocean recorded a net loss of HKD 377.8 million (USD 49.1 million, EUR 41.5 million) in 2020, compared to a profit of HKD 28 million (USD 3.64 million, EUR 3.08 million) in 2020. It attributed the losses to supply-chain issues related to COVID-19, as well as difficulties collecting payments from clients of its seafood supply division.
Late last year, China Ocean announced it was building a fishing port in Ecuador, but its claims of having signed a memorandum of understanding with Mercado Común Del Sur (MERCOSUR) on the project were denied by MERCOSUR. China Ocean didn’t respond to SeafoodSource questions regarding the status of the project.
