Frankfurt am Main, 15. April 2015

  • Revenue increased by 2.9 per cent to 121.1 million Euros
  • EBIT margin of 11.5 per cent in line with guidance
  • Net profit growth of 3.3 per cent
  • Cautiously optimistic outlook for 2015 with a year-on-year revenue growth of about 5 per cent in RMB terms

Frankfurt am Main, April 15, 2015 - In 2014 seafood processors, particularly those from China, were faced with several adverse effects which had a negative impact on their business results. Nevertheless, Haikui Seafood was able to improve its revenue and net profit and reached its targeted EBIT margin for 2014. For the financial year 2015, the company is cautiously optimistic and expects to remain on its path of stable growth.

The financial year 2014 was marked by several difficult market circumstances, which affected especially Chinese seafood processors. Haikui Seafood was not immune to these developments ranging from the emerging number of competitors from low-cost regions in Asia, rising wages in China, the unwillingness of end consumers, especially in Europe, to accept higher prices, to the on-going credit crunch in China which led to lower selling prices by some seafood processors to generate cash.

Nevertheless, Haikui Seafood was able to increase its revenue in 2014 by 2.9 per cent to 121.1 million Euros (2013: 117.6 million Euros). The main reason for this positive development were higher selling prices, which were partially offset by a lower sales volume resulting from the keen competition and a weaker global economy. With regard to the two product segments of Haikui Seafood, the frozen product segment recorded a slight decrease of 0.3 per cent in revenue to 94.5 million Euros (2013: 94.8 million Euros) due to the lower sales volume caused by the tight competitive situation. In contrast, revenue generated in the canned product segment augmented by 16.3 per cent to 26.5 million Euros (2013: 22.8 million Euros) due to an overall increase in average selling price.

Pressure on profit margins
Higher raw material costs as well as higher direct labour costs per production unit caused a decrease in gross profit by 6.7 per cent to 19.8 million Euros (2013: 21.2 million Euros). Accordingly, the gross profit margin went down by 1.7 percentage points to 16.3 per cent (2013: 18.0 per cent). For the same reasons and due to higher administrative expenses, EBIT dropped by 12.7 per cent to 13.9 million Euros (2013: 15.9 million Euros), corresponding to an EBIT margin of 11.5 per cent (2013: 13.6 per cent). Nevertheless, the EBIT margin is still at an attractive level and was fully in line with the latest full-year 2014 guidance of Haikui Seafood, predicting that the EBIT margin would reach the lower end of a range between 11 and 13 per cent.

At the same time, net profit increased by 3.3 per cent to 10.6 million Euros (2013: 10.2 million Euros). This positive effect was due to a lower taxable income in 2014 and lower finance expenses. The net profit margin remained at the same level as in 2013 and amounted to 8.7 per cent.

Very strong financial position
Despite high capital expenditure amounting to 14.2 million Euros, largely attributed to the construction of the new processing factory, Haikui Seafood was able to record a strong net cash inflow of 35.1 million Euros. Together with an equity of 186.6 million Euros (2013: 155.4 million Euros) representing an equity ratio of 95.0 per cent (2013: 97.4 per cent), the company has a sound basis to continue on its growth path.

"With our strong financial condition and resilient business model, we believe that we are well positioned to deal with the market challenges in the near term while laying the foundations for our ambitious mid- and long-term growth plans", says Chen Zhenkui, CEO of Haikui Seafood.

Further growth expected in 2015
In 2015 the seafood processing industry will still be faced with various challenges, which will also affect the profitability of Haikui Seafood. Nevertheless, the company is cautiously optimistic regarding its business development for the full-year 2015. Revenue in RMB terms is expected to increase by around 5 per cent. Driven by an expected better harvest of aquaculture products such as shrimps and tilapias, especially revenue generated from frozen seafood is anticipated to grow by around 10 per cent in RMB terms. Due to the tough market conditions and the foreseen higher production costs, the gross profit margin is expected to be slightly lower compared to 2014 and the EBIT margin is expected to be in the range between 8 to 10 per cent.

To remain competitive and position the group for further growth in the future, Haikui Seafood has started with the construction of its new production facility on Dongshan in 2014. Thanks to its advanced equipment the new factory will significantly increase the current production efficiency and capacity. The construction is progressing as planned. Completion of the new factory is targeted for mid 2016 with first contributions also expected in 2016.

Furthermore, the group plans to extend its R&D activities with the focus on the business of extracting chemical compounds from marine processing by-products, with targeted production in the new factory from 2016 onwards.

The annual report 2014 of Haikui Seafood is available on the company's website under the following link:
http://www.haikui-seafood.com/investor-relations/publications/reports/

About Haikui Seafood AG
Haikui Seafood processes fish and seafood for the Chinese and international markets. Its products range includes frozen or canned fish and seafood, produced from a large variety of species of raw fish and seafood, including prawn, crab, various fish species and shellfish as well as cephalopods. Clients of Haikui Seafood are distributors in China and overseas, located mainly in Asia, the U.S. and Europe. Haikui Seafood employs 670 permanent employees and 902 additional temporary workers as of December 31, 2014. The company has an annual processing capacity of more than 34,000 tonnes (output). The processing facilities are located in the South-East of China on Dongshan Island, Zhangzhou, Fujian Province. Haikui Seafood operates a streamlined supply chain including self-owned processing facilities, in-house research and product development capacities as well as warehousing and cold storage facilities while simultaneously cooperating closely with raw goods suppliers.

distributed by