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Pingtan Marine Enterprise Reports Financial Results for the First Quarter Ended March 31, 2015

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- Company to Hold Conference Call on Tuesday, May 12, 2015, at 8:30 AM ET

FUZHOU, China, May 11, 2015 /PRNewswire/ -- 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 its unaudited financial results the first quarter ended March 31, 2015.

Recent Significant Factors Affecting Pingtan's Results of Operation

As previously disclosed, the Indonesian government introduced a 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 to fight illegal fishing activities. As a result, all licensed fishing vessels operating in the Indonesian waters have been informed by the Indonesian government to only operate within strict guidelines in order to avoid potential enforcement actions by the Indonesian Navy such as boat seizures. Pingtan currently operates 129 fishing vessels and 117 of these vessels operate in the Arafura Sea of Indonesia. To cooperate and remain in compliance with the Indonesian government's fishing license check procedures, in January 2015, the Company lowered its operation to approximately half of its normal level; and from February 2015, Pingtan temporarily ceased operations in Indonesian waters. Since the Company derives a majority of itsrevenue from this area, this temporary ban caused a significant drop in production. As a result, the Company's sales for the three months ended March 31, 2015 decreased significantly as compared to the three months ended March 31, 2014. The Indonesian government had previously expected the license check of fishing vessels to be completed by April 30, 2015. As of the date of this report, the license checking was still in process. While the Company believes that over the long-term the Indonesian government's anti-illegal fishing measures will be beneficial to fully licensed fishing companies such as PME, it cannot guarantee when fishing will resume in this area, and its financial condition and results of operation will continue to be materially impacted while this moratorium is in existence.

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We were pleased with the operating results achieved in the first quarter of 2015 despite the anti-illegal fishing measures enacted by the Indonesia government. In compliance with the Indonesian government's guidelines, our fishing vessels operating in the Arafura Sea of Indonesia maintained minimum level of operation, which resulted in significant decreases in our harvest volume and sales during the quarter. However, we believe these temporary challenges will benefit fully licensed fishing companies such as Pingtan in the long term. While we are actively cooperating with the Indonesian Navy to accelerate the elimination of illegal fishing vessels from the waters, we continue to seek and establish new fishing territories and to further invest in our operations to maintain the Company's leading market position in China."

First Quarter 2015 Financial Highlights (all results are compared to prior year period)

  • As a result of the above, revenue was $28.7 million compared to $65.6million.
  • Gross profit was $11.5 million compared to $25.6 million, and gross margin was 39.9% compared to 39.0%, due to a decrease in unit selling price, due to different sales mix.
  • Net income from the fishing business was $8.4 million, or $0.10 per basic and diluted share, compared to $23.4 million, or $0.30 per basic and diluted share.

First Quarter 2015 Selected Financial Highlights 


($ in millions, except per share data)

Three Months ended March 31,


2015

2014

Fishing Business 



Revenue

$28.7

$65.6

Cost of Revenue

$17.3

$40.0

Gross Profit

$11.5

$25.6

Gross Profit Margin

39.9%

39.0%

Net Income from Fishing Business

$8.4

$23.4

Basic and Diluted Weighted Average

79.1

79.1

EPS (in $)

0.10

0.30







Balance Sheet Highlights 


($ in millions, except per share data)

3/31/2015

12/31/2014


(Unaudited)

(Audited)

Cash and Cash Equivalents

$67.4

$12.8

Total Current Assets

134.2

105.9

Total Assets

317.0

249.0

Total Current Liabilities

55.4

61.1

Total Long-term Debt, net of current portion

38.8

38.6

Total Liabilities

94.2

99.8

Shareholders' Equity

222.8

149.3

Total Liabilities and Shareholders' Equity

317.0

249.0

Book Value Per Share (in $)

2.82

$1.89

Consolidated Financial and Operating Review

Revenues

Revenues from the fishing business, sales of frozen fish and other marine catches for the three months ended March 31, 2015, were $28.7 million compared to $65.6 million for the same period in 2014. The decrease was primarily due to the decrease in average unit sale price from a different sales mix, as well as the Company's minimal operations in the Arafura Sea during the first quarter of 2015 in compliance with Indonesian government's efforts to combat illegal fishing in its waters, which resulted in decreased sales volumes.

Gross Margin

The Company's gross margin was 39.9% for the three months ended March 31, 2015, compared to 39.0% in the prior-year period. The slight increase was primarily due to the different sales mix with different gross profit margins.

Selling Expenses

Selling expenses were $0.7 million, or 2.4% of revenue, for the three months ended March 31, 2015, compared to $0.6 million, or 1.0% of revenue, in the prior-year period.

General & Administrative Expenses

For the three months ended March 31, 2015, general and administrative expenses were $1.4 million, or 5.0% of revenue, compared to $0.8 million, or 1.2% of revenue, in the prior-year period.

Net Income

Net income from the fishing business for the three months ended March 31, 2015, was $8.4 million, or $0.10 per basic and diluted share, compared to $23.4 million, or $0.30 per basic and diluted share, in the same period of 2014. The decrease was primarily due to the reasons described above.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Tuesday, May 12, 2015, at 8:30 AM ET.

The dial-in numbers are:

Live Participant Dial In (Toll Free): 877-407-0310
Live Participant Dial In (International): 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: http://ptmarine.equisolvewebcast.com/q1-2015. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan Marine

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 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. Pingtan Fishing is a growing fishing company and provider of high quality seafood in the PRC.

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. 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.

CONTACT:
Roy Yu
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
ryu@ptmarine.net

INVESTOR RELATIONS:
The Equity Group Inc.
Katherine Yao, Associate
Tel: +86 10 6587 6435
kyao@equityny.com

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) 
(IN U.S. DOLLARS)



For the Three Months Ended March 31,



2015


2014






REVENUES

$

28,732,824

$

65,582,952






COST OF REVENUES


17,266,289


39,983,490






GROSS PROFIT


11,466,535


25,599,462






OPERATING EXPENSES:





    Selling


705,520


670,951

    General and administrative


1,444,214


780,271






        Total Operating Expenses


2,149,734


1,451,222






INCOME FROM OPERATIONS


9,316,801


24,148,240






OTHER INCOME (EXPENSE):





    Interest income


19,232


3,425

    Interest expense


(953,644)


(1,132,423)

    Foreign currency transaction gain (loss)


37,381


(154,784)

    Grant income


-


524,421

    Loss on equity method investment


(3,345)


-

    Other expense


(163)


(163)






        Total Other Income (Expense), net


(900,539)


(759,524)






INCOME BEFORE INCOME TAXES


8,416,262


23,388,716






INCOME TAXES


-


-






NET INCOME

$

8,416,262

$

23,388,716






LESS: NET INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST


(193,015)


-






NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

8,223,247

$

23,388,716






COMPREHENSIVE INCOME:





    NET INCOME


8,416,262


23,388,716

    OTHER COMPREHENSIVE INCOME (LOSS):










        Unrealized foreign currency translation gain (loss)


646,756


(1,299,601)


    COMPREHENSIVE INCOME

$

9,063,018

$

22,089,115


    LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST


387,343


-

    COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

8,675,675

$

22,089,115






NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY





    Basic and diluted

$

0.10

$

0.30






WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:





    Basic and diluted


79,055,053


79,055,053






 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN U.S. DOLLARS)



March 31,
2015


December 31,
2014



(Unaudited)



ASSETS





CURRENT ASSETS:





    Cash

$

67,379,943

$

12,752,272

    Accounts receivable, net of allowance for doubtful accounts


30,197,115


49,999,712

    Inventories


4,883,958


12,123,405

    Prepaid expenses


19,723


32,913

    Prepaid expenses - related parties


17,539,794


7,319,975

    Deferred expenses - related parties


559,615


1,029,114

    Other receivables


3,483


22,656,232

Other receivables - related parties


13,586,289


-






        Total Current Assets


134,169,920


105,913,623






OTHER ASSETS:





    Cost method investment


3,437,495


3,421,031

    Equity method investment


56,960,841


15,964,812

    Prepayment for long-term assets


13,816,274


13,750,102

    Property, plant and equipment, net


108,624,354


109,980,617






        Total Other Assets


182,838,964


143,116,562






        Total Assets

$

317,008,884

$

249,030,185






 LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





    Accounts payable

$

1,310,466

$

1,181,977

    Accounts payable - related parties


296,102


2,601,314

    Advances from customers


9,348


164,724

    Short-term bank loans


31,500,000


30,353,890

    Long-term bank loans - current portion


12,424,089


18,868,616

    Accrued liabilities and other payables


6,424,788


5,602,307

    Due to related parties


3,473,355


2,373,352






        Total Current Liabilities


55,438,148


61,146,180






OTHER LIABILITIES:





    Long-term bank loans - non-current portion


38,810,954


38,625,071






        Total Liabilities


94,249,102


99,771,251






SHAREHOLDERS' EQUITY:





Equity attributable to owners of the company:





    Ordinary shares ($0.001 par value; 225,000,000 shares authorized; 79,055,053





       shares issued and outstanding at March 31, 2015 and December 31, 2014)


79,055


79,055






    Additional paid-in capital


167,217,936


117,525,377


    Retained earnings


28,748,406


21,315,710

    Statutory reserve


6,412,892


6,412,892


    Accumulated other comprehensive income


4,206,844


3,925,900


    Total equity attributable to owners of the company


206,665,133


149,258,934


    Non-controlling interest


16,094,649


-






        Total Shareholders' Equity


222,759,782


149,258,934

        Total Liabilities and Shareholders' Equity

$

317,008,884

$

249,030,185

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN U.S. DOLLARS)






For the Three Months Ended March 31,






2015


2014









CASH FLOWS FROM OPERATING ACTIVITIES:






Net income

$

8,416,262

$

23,388,716


Adjustments to reconcile net income from operations to net cash







provided by operating activities:







Depreciation


1,528,756


1,328,129



Increase in allowance for doubtful accounts


160,765


-



Loss on equity method investment


3,345


-


Changes in operating assets and liabilities:







Accounts receivable



19,795,236


(7,802,740)



Inventories


7,266,034


(2,969,237)



Prepaid expenses


13,289


2,347,060



Prepaid expenses - related parties


(10,140,274)


-



Deferred expenses - related parties


472,387


-



Other receivables


164,836


(155,541)



Advances to suppliers


-


(81,546)



Accounts payable


122,267


365,972



Accounts payable - related parties


(2,307,645)


(4,930,343)



Advances from customers


(155,489)


(292,855)



Accrued liabilities and other payables


792,197


(743,844)



Due to related parties


3


23,352









NET CASH PROVIDED BY OPERATING ACTIVITIES


26,131,969


10,477,123









CASH FLOWS FROM INVESTING ACTIVITIES:







Refunds from commercial retail space prepayments


22,497,898


-



Purchase of property, plant and equipment


(16,361)


(380,339)



Refunds from fixed assets deposits


-


1,901,560



Payments for equity method investment


(40,744,483)


-









NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES


(18,262,946)


1,521,221









CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from short-term bank loans


7,153,729


8,636,605



Repayments of short-term bank loans


(6,158,048)


(6,722,024)



Proceeds from long-term bank loans


-


3,745,867



Repayments of long-term bank loans


(6,506,894)


-



Advances from related parties


1,100,000


650,000



Payments made for dividend


(790,551)


-



Capital contribution from non-controlling interest


65,191,173


-



Payments made to related parties in connection with the termination of VIE


(13,527,168)


-









NET CASH PROVIDED BY FINANCING ACTIVITIES


46,462,241


6,310,448









EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS


296,407


(427,669)









NET INCREASE IN CASH AND CASH EQUIVALENTS


54,627,671


17,881,123









CASH AND CASH EQUIVALENTS - beginning of period


12,752,272


8,156,599









CASH AND CASH EQUIVALENTS - end of period

$

67,379,943

$

26,037,722









SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:






Cash paid for:








Interest

$

939,951

$

1,481,812




Income taxes

$

-

$

-









NON-CASH INVESTING AND FINANCING ACTIVITIES:






Acquisition of property and equipment by decreasing prepayment for long-term assets

$

-

$

9,841,190

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pingtan-marine-enterprise-reports-financial-results-for-the-first-quarter-ended-march-31-2015-300081143.html

SOURCE Pingtan Marine Enterprise Ltd.