Exhibit 99.1

 

Pingtan Marine Enterprise Ltd. Page 1
August 17, 2020  

 

 

pingtan marine enterprise Reports FINANCIAL RESULTS

 

for the second quarter ended June 30, 2020

 

Company to Hold Conference Call on Tuesday, August 18, 2020, at 8:30 AM ET

 

FUZHOU, China, August 17, 2020 – Pingtan Marine Enterprise Ltd. (Nasdaq: PME) (“Pingtan” or the “Company”), a global fishing company based in the People’s Republic of China (PRC), today announced financial results for its second quarter and first six months ended June 30, 2020.

 

Second Quarter 2020 Financial Highlights (Year-on-Year Comparisons)

 

Revenue was $23.5 million compared to $25.5 million.

 

Gross profit was $2.2 million compared to $9.3 million.

 

Net loss was $1.7 million compared to net income of $5.0 million.

 

Net loss attributable to owners of the Company was $1.6 million, or $(0.02) per basic and diluted share, compared to net income attributable to owners of the Company of $4.6 million, or $0.06 per basic and diluted share.

 

Management Comments

 

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, “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. 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. In the second quarter of 2020, although we saw a decrease of $1.7 million in revenue during the quarter compared to the same period in 2019, our sales volume peaked to 21.8 million kg, an increase of 41% compared to the same period in 2019 and the highest record of single-quarter sales volume in the last five years. 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. 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 reaction to the potential market variations and to assist the Company in its development and expansion of catch species, we are building a large-scale Antarctica krill fishing and processing vessel with a gross tonnage of 8600 and overall length of 107 meters. Upon completion and operation of this vessel, our fishing areas will be expanded to the Antarctic waters and our fishing capacity will be further enhanced.”

 

 

 

Pingtan Marine Enterprise Ltd. Page 2
August 17, 2020  

 

Factors Affecting Pingtan’s Results of Operations

 

COVID-19 pandemic

 

The recent COVID-19 pandemic has spread rapidly throughout the world and significantly curtailed the global economic activities. As the first country to be engulfed in the pandemic, China introduced strict emergency quarantine measures and travel restrictions to contain the pandemic, which had a big impact on China’s economy in the first half of 2020. Although it was generally believed that the pandemic was under control in the second quarter, the PRC government continued to take precautionary quarantine measures to avoid additional outbreaks of the pandemic, which had an adverse impact on the economic activities in China.  

 

The continued precautionary quarantine measures by the PRC government and travel restrictions implemented by some countries have had a significant impact on many sectors across China, which has also adversely affected the Company’s operations in China, despite the PRC government’s efforts to revive the economy. To reduce the impact on its production and operation, the Company has taken and may continue to take actions in response as necessary, including but not limited to continued shifts in work system, paid leave and reducing the number of foreign crews on its vessels. Its management is focused on mitigating the effects of COVID-19 on its business operations while protecting the health of its employees. The Company will continue to actively monitor the situation and may take further actions that alter its business operations as may be required by local authorities or that the Company determines in the best interests of its employees, customers, partners and suppliers.

 

Some of Pingtan’s customers are fish processing plants that exports processed fish products to foreign countries. These customers tended to reduce or postpone their purchases from the Company in the initial stage of the pandemic and have now started adjusting their business strategies in relation to exportation or domestic sale. These customers and other customers of the Company may further reduce or postpone their purchases in the future due to the pandemic, which may lead to an increase in inventory. The Company may take necessary de-stocking measures, such as lowering the selling prices of catches and extending the term of payment for certain accounts receivable, which may adversely affect the financial conditions and working capital of the Company.

 

The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally. However, the extent of the impact on the Company’s financial condition and results of operations is still highly uncertain and will depend on future developments, such as the ultimate duration and scope of the outbreak, its impact on its customers and exporters, how quickly normal economic conditions, operations, and the demand for its products can resume and whether the pandemic leads to recessionary conditions in China.

 

Although both the PRC government and the Company have taken measures in response to the pandemic, the Company anticipates that its results of operations will continue to be impacted by this pandemic in the third and fourth quarters of 2020, and is unable to reasonably estimate the extent of the impact on its full-year results of operations, its liquidity or its overall financial position.

 

The Company’s Fishing Fleet

 

As of June 30, 2020, of the Company’s 143 vessels, 69 were located in the international waters, 12 were located in the Bay of Bengal in India, 13 were located in the PRC, 37 were located in the Arafura Sea in Indonesia, 10 just completed the rebuilding projects and were preparing for operation in the international waters, 1 transport vessel was in the modification and rebuilding stage and 1 new krill fishing and processing vessel was in building stage.

 

 

 

Pingtan Marine Enterprise Ltd. Page 3
August 17, 2020  

 

Second Quarter 2020 Selected Financial Highlights

 

($ in millions, except shares and per share data)  Three Months ended
June 30,
 
   2020   2019 
         
Revenue  $23.5   $25.5 
Cost of Revenue  $21.3   $16.2 
Gross Profit  $2.2   $9.3 
Gross Margin   9.2%   36.4%
Net (Loss) Income  $(1.7)  $5.0 
Basic and Diluted Weighted Average Shares   79.1    79.1 
EPS (in $)  $(0.02)  $0.06 

 

Balance Sheet Highlights 

 

($ in millions, except for book value per share)  6/30/2020   12/31/2019 
         
Cash and Cash Equivalents  $3.4   $10.1 
Total Current Assets  $165.6   $64.3 
Total Assets  $557.4   $404.1 
Total Current Liabilities  $183.1   $88.8 
Long-term bank loans, non-current portion  $214.4   $160.2 
Total Liabilities  $397.5   $249.1 
Shareholders’ Equity  $160.0   $155.1 
Total Liabilities and Shareholders’ Equity  $557.4   $404.1 
Book Value Per Share (in $)  $2.02   $1.96 

 

Consolidated Financial and Operating Review

 

Revenue

 

Revenue for the three months ended June 30, 2020 was $23.5 million, a decrease of $2.0 million, or 7.9%, from $25.5 million for the same period in 2019. Sales volume increased by 41.0% to 21.8 million KG in the three months ended June 30, 2020 from 15.4 million KG in the same period of 2019. The decrease in revenue was primarily attributable to the different sales mix and the decrease in the average unit sale price, despite the increase in sales volume due to more vessels in operations. Average unit sale price decreased 34.5% in the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

 

For the six months ended June 30, 2020, the Company’s revenues were $40.8 million compared to $43.9 million in the first half of 2019, a decrease of $3.1 million, or 7.1%. Sales volumes in the six months ended June 30, 2020 increased by 46.0% to 35.3 million KG from 24.2 million KG in the six months ended June 30, 2019. Average unit sale price decreased by 36.3% in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019. The decrease is due to the same reasons described above.

 

 

 

Pingtan Marine Enterprise Ltd. Page 4
August 17, 2020  

 

Gross Margin

 

The Company’s gross margin was 9.2% for the three months ended June 30, 2020, compared to 36.4% in the prior year period. The decrease in gross margin for the three months ended June 30, 2020 as compared to the same period of 2019 is due to the decrease in average unit sale price by 34.5% while the cost per unit had a slight decrease. A key species of the Company’s sales mix was Indian Ocean squid whose market price was on the low side, and the market price of frozen seafood was affected due to the COVID-19 pandemic, which together led to a decrease in the average unit sale price of sales mix.

 

For the six months ended June 30, 2020, gross margin decreased to 19.4% from 30.4% in the same period of 2019. The decrease in gross margin for the six months ended June 30, 2020 is due to the same reasons described above.

 

Selling Expenses

 

For the three months ended June 30, 2020, selling expenses were $1.0 million compared to $0.5 million in the prior year period. The increase was primarily due to the increase in insurance, storage fees and other miscellaneous selling expenses.

 

For the six months ended June 30, 2020, selling expenses were $2.0 million compared to $1.2 million in the same period of 2019. The increase is due to the same reasons described above.

 

General & Administrative Expenses

 

For the three months ended June 30, 2020, general and administrative expenses were $1.6 million, compared to $2.1 million in the prior year period, a decrease of 25.1%. The decrease was primarily due to the decrease in compensation and related benefits and other general and administrative expenses, the increase in bad debt recovery and no impairment loss recorded for the three months ended June 30, 2020 as compared to an impairment loss of $0.2 million for the three months ended June 30, 2019.

 

For the six months ended June 30, 2020, general and administrative expenses were $3.6 million, compared to $6.9 million in the prior year period, a decrease of 48.6%. The decrease was primarily due to the decrease in depreciation of non-operating vessels, compensation and related benefits, other general and administrative expenses and no impairment loss recorded for the six months ended June 30, 2020 as compared to an impairment loss $2.5 million for the six months ended June 30, 2019.

 

Net (Loss) Income

 

Net loss for the three months ended June 30, 2020 was $1.7 million, compared to net income of $5.0 million in the same period of 2019.

 

Net income for the six months ended June 30, 2020 was 6.8 million, compared to net income of $3.1 million in the same period of 2019.

 

 

 

Pingtan Marine Enterprise Ltd. Page 5
August 17, 2020  

 

Net (Loss) Income Attributable to Owners of the Company

 

Net loss attributable to owners of the Company for the three months ended June 30, 2020 was $1.6 million, or $(0.02) per basic and diluted share, compared to net income attributable to owners of the Company of $4.6 million, or $0.06 per basic and diluted share, in the same period of 2019.

 

Net income attributable to owners of the Company for the six months ended June 30, 2020 was $6.1 million, or $0.08 per basic and diluted share, compared to net income attributable to owners of the Company of $2.7 million, or $0.03 per basic and diluted share, in the same period of 2019.

 

Conference Call Details

 

Pingtan will discuss the financial results for the second quarter of 2020 during a conference call on Tuesday, August 18, 2020 – 8:30 a.m. ET.

 

The dial-in numbers are:

 

Live Participant Dial-in (Toll Free): +1 (877) 407-0310
Live Participant Dial-in (International): +1 (201) 493-6786

 

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: https://78449.themediaframe.com/dataconf/productusers/pme/mediaframe/40260/indexl.html. This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.

 

About Pingtan

 

Pingtan is a global fishing company engaging in ocean fishing through its subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing.

 

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, as amended. Words such as “estimate,” “project,” “forecast,” “plan,” “believe,” “may,” “expect,” “anticipate,” “intend,” “planned,” “potential,” “can,” “expectation” and similar expressions, or the negative of those expressions, may identify forward-looking statements. Although forward-looking statements reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; locating or re-locating vessels, in foreign waters and related license requirements; our ability to successfully manage relationships with customers, distributors and other important relationships; actions taken by government regulators, such as the Indonesian moratorium; technological changes; competition; demand for our products and services; the deterioration of general economic conditions, whether internationally, nationally or in the local markets in which we operate; the impact of the current coronavirus (COVID-19) pandemic on the Company’s financial condition, business operations and liquidity; the impact of COVID-19 on our customers and distributors; legislative or regulatory changes that may adversely affect our business; operational, mechanical, climatic or other unanticipated issues that adversely affect the production capacity of the Company’s fishing vessels and their ability to generate expected annual revenue and net income; and other risk factors contained in Pingtan’s SEC filings available at www.sec.gov, including Pingtan’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 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, except as required by law.

 

CONTACT:

LiMing Yung (Michael)

Chief Financial Officer

Pingtan Marine Enterprise Ltd.

Tel: +86 591 87271753

michaelyung@ptmarine.net

 

Maggie Li
Investor Relations Manager
Pingtan Marine Enterprise Ltd.
Tel: +86 591 8727 1753
mli@ptmarine.net

 

INVESTOR RELATIONS

PureRock Communications Limited

PTmarine@pure-rock.com

 

 

 

Pingtan Marine Enterprise Ltd. Page 6
August 17, 2020  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(IN U.S. DOLLARS) 

 

   For the Three Months Ended
June 30,
   For the Six Months Ended
June 30,
 
   2020   2019   2020   2019 
                 
REVENUE  $23,463,133   $25,463,094   $40,770,133   $43,887,303 
                     
COST OF REVENUE   21,299,920    16,196,280    32,854,363    30,539,838 
                     
GROSS PROFIT   2,163,213    9,266,814    7,915,770    13,347,465 
                     
OPERATING EXPENSES:                    
Selling   1,046,519    535,276    1,948,170    1,245,205 
General and administrative   795,332    1,365,250    2,065,475    4,960,640 
General and administrative - depreciation   789,334    749,056    1,500,767    1,971,217 
Subsidy   (564,095)   -    (8,338,088)   - 
Loss on fixed assets disposal   -    166,152    -    166,152 
                     
Total Operating Expenses   2,067,090    2,815,734    (2,823,676)   8,343,214 
                     
INCOME FROM OPERATIONS   96,123    6,451,080    10,739,446    5,004,251 
                     
OTHER INCOME (EXPENSE):                    
Interest income   1,162,486    17,773    2,362,612    20,289 
Interest expense   (2,936,529)   (1,598,082)   (5,835,425)   (2,127,247)
Foreign currency transaction gain (loss)   21,718    (139,715)   (344,691)   (49,631)
Gain from cost method investment   132,753    347,651    132,753    347,651 
Loss on equity method investment   (143,015)   (271,227)   (268,543)   (381,843)
Other income (expense)   5,084    226,487    (30,456)   252,158 
                     
Total Other Expense, net   (1,757,503)   (1,417,113)   (3,983,750)   (1,938,623)
                     
(LOSS) INCOME BEFORE INCOME TAXES   (1,661,380)   5,033,967    6,755,696    3,065,628 
                     
INCOME TAXES   -    -    -    - 
                     
NET (LOSS) INCOME  $(1,661,380)  $5,033,967   $6,755,696   $3,065,628 
                     
LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST   (85,370)   454,923    667,016    373,823 
                     
NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY  $(1,576,010)  $4,579,044   $6,088,680   $2,691,805 
                     
COMPREHENSIVE INCOME (LOSS):                    
NET (LOSS) INCOME   (1,661,380)   5,033,967    6,755,696    3,065,628 
OTHER COMPREHENSIVE (LOSS) INCOME                    
Unrealized foreign currency translation gain (loss)   (166,176)   (3,066,793)   (1,854,615)   (167,444)
COMPREHENSIVE (LOSS) INCOME  $(1,827,556)  $1,967,174   $4,901,081   $2,898,184 
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST   (98,734)   209,407    518,480    334,384 
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY  $(1,728,822)  $1,757,767   $4,382,601   $2,563,800 
                     
NET(LOSS)INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY                    
Basic and diluted  $(0.02)  $0.06   $0.08   $0.03 
                     
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:                    
Basic and diluted   79,055,053    79,055,053    79,055,053    79,055,053 

 

 

 

Pingtan Marine Enterprise Ltd. Page 7
August 17, 2020  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)

 

   June 30,   December 31, 
   2020   2019 
   (Unaudited)     
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $3,405,523   $10,092,205 
Restricted cash   10,770,608    - 
Accounts receivable, net of allowance for doubtful accounts   12,624,501    9,273,446 
Due from related parties   81,252,639    12,477,777 
Inventories, net of reserve for inventories   56,605,991    30,527,752 
Prepaid expenses   750,349    1,354,129 
Other receivables   219,325    613,384 
           
Total Current Assets   165,628,936    64,338,693 
           
OTHER ASSETS:          
Cost method investment   2,966,311    3,010,235 
Equity method investment   27,249,283    27,923,464 
Prepayment for long-term assets   63,950,903    49,040,338 
Right-of-use asset   253,628    438,254 
Property, plant and equipment, net   297,397,430    259,377,729 
           
Total Other Assets   391,817,555    339,790,020 
           
Total Assets  $557,446,491   $404,128,713 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable  $17,363,276   $7,951,766 
Accounts payable - related parties   2,366,568    1,707,217 
Short-term bank loans   90,684,370    10,034,116 
Long-term bank loans - current portion   60,880,006    57,122,789 
Accrued liabilities and other payables   11,579,704    11,428,018 
Lease liability- current liability   222,567    375,922 
Due to related parties   18,354    168,328 
           
Total Current Liabilities   183,114,845    88,788,156 
           
OTHER LIABILITIES:          
Lease liability   -    32,203 
Long-term bank loans - non-current portion   214,352,709    160,230,498 
           
Total Liabilities   397,467,554    249,050,857 
           
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS’ EQUITY:          
Equity attributable to owners of the company:          
Ordinary shares ($0.001 par value; 125,000,000 shares authorized; 79,055,053 shares issued and outstanding at June 30, 2020 and December 31, 2019)   79,055    79,055 
Additional paid-in capital   81,682,599    81,682,599 
Retained earnings   60,375,134    54,286,454 
Statutory reserve   15,748,751    15,748,751 
Accumulated other comprehensive loss   (17,786,987)   (16,080,908)
Total equity attributable to owners of the company   140,098,552    135,715,951 
Non-controlling interest   19,880,385    19,361,905 
           
Total Shareholders’ Equity   159,978,937    155,077,856 
           
Total Liabilities and Shareholders’ Equity  $557,446,491   $404,128,713 

 

 

 

Pingtan Marine Enterprise Ltd. Page 8
August 17, 2020  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)

 

   For the Six Months Ended
June 30,
 
   2020   2019 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income  $6,755,696   $3,065,628 
Adjustments to reconcile net income from operations to net cash provided by operating activities:          
Depreciation   6,672,732    5,071,259 
Increase in allowance for doubtful accounts   57,205    - 
Increase (decrease) in reserve for inventories   2,000,619    (358,040)
Loss on equity method investment   268,543    381,843 
Impairment loss of fishing vessels   -    2,475,442 
Changes in operating assets and liabilities:          
Accounts receivable   (3,567,172)   (2,452,909)
Inventories   (28,703,844)   (2,426,497)
Prepaid expenses   587,974    2,569 
Other receivables   387,716    (375,533)
Other receivables - related party   -    (20,230)
Accounts payable   9,592,030    1,973,993 
Accounts payable - related parties   688,894    (2,896,036)
Advance from customers   (824,813)   - 
Accrued liabilities and other payables   1,145,268    2,572,773 
Accrued liabilities and other payables - related party   -    (1,290)
Due to related parties   (323,577)   1,221,527 
           
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES   (5,262,729)   8,234,499 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property, plant and equipment   (85,240,006)   (59,984,190)
Proceeds from government grants for fishing vessels construction   20,893,357    3,623,171 
Deposit for purchase of land use right   -    (7,373,762)
           
NET CASH USED IN INVESTING ACTIVITIES   (64,346,649)   (63,734,781)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds of short-term bank loans   81,343,591    - 
Proceeds from long-term bank loans   76,076,167    100,283,152 
Repayments of long-term bank loans   (14,611,982)   (4,719,207)
Due to related parties   -    (10,220,387)
Due from related parties   -    (28,678,209)
Advance to related party-HL   (69,423,710)     
           
NET CASH PROVIDED BY FINANCING ACTIVITIES   73,384,066    56,665,349 
           
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH   309,238    41,357 
           
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   4,083,926    1,206,424 
           
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period   10,092,205    1,966,855 
           
CASH, CASH EQUIVALENTS AND RESTRICTED - end of period  $14,176,131   $3,173,279 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for:          
Interest  $6,750,422   $2,095,373 
Income taxes  $-   $- 
           
RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS:          
Cash and cash equivalents   3,405,523    3,173,279 
Restricted cash   10,770,608    - 
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH  $14,176,131   $3,173,279 
NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Acquisition of property and equipment by decreasing prepayment for long-term assets  $(15,731,909)  $- 
Property and equipment acquired on credit as payable  $-    24,435,995