FUZHOU, China, Nov. 8, 2016 /PRNewswire/ —
Pingtan Marine Enterprise Ltd. (Nasdaq: PME) (“Pingtan” or the “Company”), a global fishing company based in the People’s Republic of China (PRC), announced today its unaudited financial results for the third quarter and nine months ended September 30, 2016.
The Company’s recent notable events are as follows:
Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, “In the third quarter 2016, we continued to reach out to different countries and regions seeking to expand our fishing territories. We are pleased to announce that 13 of our fishing vessels are on the way to their fishing destination in the sea area of Timor-Leste, and we expect to put these vessels in full operation the upcoming weeks. Meanwhile, we are also in the process of negotiating with delegates from several countries with fertile fish resources, and we have already looked into opportunities outside of Asia-Pacific. We are committed to providing a variety of natural seafood products around the world to Chinese consumers.”
Factors Affecting Pingtan’s Results of Operation – Indonesia Moratorium
As previously disclosed in Form 10-K and 10-Q the Company filed in 2015 and 2016, in early December 2014 the Indonesian government introduced a nine-month moratorium on issuing new fishing licenses and renewals so that the country’s Ministry of Maritime Affairs and Fisheries (“MMAF”) could monitor the operations of existing fleets and fight illegal fishing activities. As a result, all licensed fishing vessels operating in Indonesian waters were informed by the Indonesian government to operate within strict guidelines and subsequently to cease operation, in order to avoid potential enforcement actions by the Indonesian Navy such as boat seizures.
To cooperate and comply with the Indonesian government’s fishing license check procedures; the Company reduced its operations in January 2015. Since February 2015, Pingtan has ceased operations of the vessels in Indonesian waters. Since the Company derives a majority of its revenue from this area, this ban caused a significant drop in production.
In November 2015, the Indonesian government announced that the moratorium had concluded. The Company’s expectation is that the MMAF will implement new fishing policies and resume the license renewal process, although this has not yet occurred. In the interim, the Company’s financial results will continue to be materially adversely affected by this moratorium.
Among the company’s 135 fishing vessels, 13 vessels have obtained fishing licenses from the Ministry of Agriculture and Fisheries of Democratic Republic of Timor-Leste and will operate in the sea area of Democratic Republic of Timor-Leste; 12 vessels are operating in the Bay of Bengal in India; 6 vessels are licensed to operate in Western and Central Pacific Ocean of the international waters, and the remaining vessels are licensed to operate in the Arafura Sea in Indonesia.
Third Quarter 2016 Financial Highlights (all results are compared to prior year period)
Third Quarter 2016 Selected Financial Highlights
Balance Sheet Highlights
Consolidated Financial and Operating Review
Revenues from the fishing business and sales of frozen fish and other marine catches, for the three months ended September 30, 2016, were $1.2 million compared to $2.7 million for the same period in 2015. The decrease was primarily due to significant decrease in sales volumes, as the Company temporarily ceased its operations in the Indonesia waters since February 2015 due to the moratorium described above, as well as decrease in average unit sale price compared to prior year period.
For the nine months ended September 30, 2016, the Company’s revenues were $7.4 million compared to $46.7 million in the first nine months of 2015. The decrease was primarily due to decrease in sales volume due to the moratorium described above.
As a result of the moratorium described above, the Company’s gross margin was negative for the three and nine months ended September 30, 2016.
Selling expenses were $0.09 million for the three months ended September 30, 2016, compared to $0.3 million in the prior-year period.
For the nine months ended September 30, 2016, selling expenses were $0.5 million, compared to $1.3 million in the same period of 2015.
General & Administrative Expenses
For the three months ended September 30, 2016 and 2015, general and administrative expenses were $0.7 million.
For the nine months ended September 30, 2016, general and administrative expenses were $3.0 million compared to $2.5 million in the same period of 2015.
Net (Loss) Income
For the three months ended September 30, 2016, net loss was $13.9 million, or $(0.16) per basic and diluted share, compared to net income of $22.5 million, or $0.26 per basic and diluted share, in the same period of 2015. The decrease was primarily due to the factors described above.
For the nine months ended September 30, 2016, the Company’s net loss was $23.9 million, or $(0.28) per basic and diluted share, compared to net income of $29.4 million, or $0.35 per basic and diluted share, in the same period of 2015.
Conference Call Details
Pingtan also announced that it will discuss financial results in a conference call on Wednesday, November 9, at 8:30 AM ET.
The dial-in numbers are:
To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page, or go to: http://ptmarine.equisolvewebcast.com/q3-2016. This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.
Pingtan is a global fishing company engaging in ocean fishing through its wholly-owned subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing. Pingtan Fishing, a provider of high quality seafood in the PRC, primarily engages in ocean fishing with many of its self-owned vessels operating within the Indian Exclusive Economic Zone and the Arafura Sea of Indonesia.
Business Risks and Forward-Looking Statements
This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward looking statements include, but are not limited to, Pingtan’s expectation thatit intends to continue paying on a quarterly basis and that it expects to put 13 modified vessels in full operation the upcoming weeks.. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the risk factors contained in Pingtan’s SEC filings available at www.sec.gov, including Pingtan’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Definitive Proxy Statement. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Katherine Yao, Senior Associate
Tel: +86 10 6587 6435
SOURCE Pingtan Marine Enterprise Ltd.