Chinese distant-water fishing firm Pingtan Marine is blaming a COVID-19 hit to demand in China for dragging down prices, as it reported a loss of USD 1.7 million (EUR 1.42 million) for the first half of 2020 on revenues of USD 23.5 million (EUR 19.7 million).
Incorporated in the Cayman Islands but headquartered in the south-easterly Chinese city of Fuzhou, Pingtan got a boost as second-quarter sales volume rose 41 percent year-on-year to 21.8 million metric tons (MT). But its revenues fell by USD 1.7 million (EUR 1.42 million) compared to the same period last year – a trend the NASDAQ-listed firm is blaming on closures of catering facilities due to the coronavirus.
Company chairman Zhuo Xinrong had blamed the virus for downward pressure on Pingtan’s pricing power in the first quarter of 2020, when Pingtan Marine saw revenue fall by 6.1 percent year-on-year to USD 17.3 million (EUR 14.52 million). Yet in Q1, net income was USD 8.42 million (EUR 7.07 million), compared to a net loss of USD 1.97 million (EUR 1.65 million) in the first quarter of 2019.
"Although the COVID-19 pandemic appears to be under control in China, the situation is still severe in many countries and regions of the world, and the pandemic has adversely affected the global market and economy,” Zhuo said. “In the second quarter of 2020, a second wave of regional spreading of the coronavirus occurred in some cities in China, including Beijing, and some cases were related to seafood markets, which had an impact on the prices of marine catches.”
Zhou said the rest of the year is looking more positive for the company, as Chinese demand is rising and there has been strong demand for Indian Ocean squid, a key species pursued by the firm’s vessels.
“With the regional spreading of the coronavirus generally contained, the Chinese market is gradually recovering, and the catering and entertainment industry is resuming normal operations,” he said. “Although we are not able to estimate the future impact of the COVID-19 pandemic at this time, we believe that the Chinese consumers' demand for seafood will return and grow during the second half of 2020.”
In its latest publicly available prospectus, the firm said it is following investments in countries covered by the Chinese government’s Belt and Road Initiative. However, a moratorium on new trawler licenses in Indonesia – where the largest cohort of Pingtan’s 142-vessel-strong distant-water fleet operates – has been a barrier to growth, according to Zhou. But he said the company still saw opportunities for growth in its distant-water operations.
“According to the State of World Fisheries and Aquaculture 2012, there are still space for development in South America, Africa, [the] Middle East, and Antarctica,” he said. “The company is endeavoring to strengthen the relationship and cooperation with companies in these regions to explore for further development.”
Pingtan is now building a 107-meter-long, 8,600-ton Antarctica krill fishing and processing vessel to enhance its fishing capacity and diversify its catches, Zhou said.
Pingtan Marine is controlled by the same family that runs another major distant-water fishing firm, Fuzhou Hong Long Long Distance Fishing Co, according to Chinese business magazine Caixin. Hong Long came to public prominence in 2018 when its license was suspended by Chinese government after Ecuador accused one of its vessels of fishing for sharks in the area of the Galápagos Islands, a UNESCO World Heritage Site.
A state-owned conglomerate China Agricultural Industry Development Fund has a minority share in Pingtan Marine’s operational arm, Pingtan County Ocean Fishing Group.
