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FIRST QUARTER FINANCIAL STATEMENTS ANNOUNCEMENT FOR THE PERIOD ENDED 31 MARCH 2018

Financials Archive

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STATEMENT OF PROFIT OR LOSS FOR THE THREE MONTHS ENDED 31 MARCH 2018


STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 31 MARCH 2018


STATEMENTS OF FINANCIAL POSITION

REVIEW OF GROUP PERFORMANCE

Revenue

1Q 2018 vs 1Q 2017

In 1st quarter of 2018, our ornamental fish and accessories activities continued to be our core business segments, which together accounted for 87.9% of the total revenue. Our overall revenue of $21.6 million for the first quarter ended 31 March 2018 was comparable to that of its corresponding period in 2017.

On a geographical basis, both revenue from Singapore and overseas remained relatively consistent in the current quarter, comparable to that of the corresponding period in 2017.

Fish

Our Dragon Fish sales continue to grow in tandem with the other ornamental fish revenue in the current quarter. We have since strived to gradually increase our export of ornamental fish by diversifying to more customers and more countries around the world from our export hubs in Singapore, Malaysia, Thailand and Indonesia, which have given rise to the improved ornamental fish revenue. Coupled with the sales generated from our newly incorporated subsidiary in the Hainan Province (China), which deals in the farming of antibiotic-free edible fish, we saw an increase in revenue contribution during the current quarter from this business segment, which was approximately $0.2 million or 2.2% higher than its corresponding period in 2017.

Accessories

Revenue from our accessories business remained relatively consistent in the current quarter, comparable to that of the corresponding period in 2017.

Plastics

Revenue contribution from our plastic activities was affected by keen market competition during the 1st quarter of 2018. We have since been monitoring the payment patterns of our customers and have rejected orders from certain problematic customers which have shown signs of deterioration in their credibility. The above has resulted in the reduction of revenue registered by $0.2 million or 7.8% in the 1st quarter of 2018 as compared to its corresponding period in 2017.

1Q 2018 vs 4Q 2017

Although the revenue from our ornamental fish activities registered a growth of $0.8 million or 8.7% quarter-on-quarter, the decrease in our accessories and plastics revenue by approximately $0.9 million and $0.3 million respectively has resulted in the reduction in overall revenue by approximately $0.4 million or 2.0% in the current quarter as compared to the previous quarter.

Fish

Moving into 1st quarter of 2018, our ornamental fish revenue continued its growth momentum. We saw improvement in Dragon Fish revenue contribution generated from the China market as we managed to sell more quantity of these fish. In addition, our continuous efforts to increase our export of ornamental fish to more countries and new markets around the world from our export hubs in Singapore, Malaysia, Thailand and Indonesia have generated higher revenue as compared to the previous quarter.

Accessories

Traditionally, during the 1st quarter of each year, revenue contribution is lower from our China operations as they are closed for operations during the week-long Chinese New Year holidays. This has attributed to the slide in accessories revenue in the current quarter as compared to the previous quarter, despite that our subsidiaries in Malaysia, China and Thailand have managed to expand their distribution network in their countries to capture more sales in the current quarter.

Plastics

Revenue from plastics business was affected by keen market competition in the current quarter. Coupled with selective selling to customers with better credit standings as mentioned above, it has resulted in the decrease in revenue registered by $0.2 million or 9.0% in the current quarter as compared to the previous quarter.

Profitability

1Q 2018 vs 1Q 2017

In line with the flat growth in overall revenue contribution, our operating profit remained stable in the 1st quarter of 2018 as compared to its corresponding period in 2017.

Fish

Despite higher revenue registered by the ornamental fish business, the reduction in profitability in the 1st quarter of 2018 as compared to its corresponding period in 2017 was a result of the difference in sales mix. In addition, the initial start-up costs incurred in relation to the Group's second aquaculture farm in the Hainan Province, has constituted to the dip in profitability in the current quarter.

Accessories

The better profit yielded from our accessories activities were in accordance with the consistent revenue in the current quarter as compared to its corresponding period in 2017, as well as the sales of more proprietary brand of innovative products with better margins.

Plastics

The reduction in revenue registered by the plastic activities, coupled with the gradual increase in overall operational costs has affected its probability in the 1st quarter of 2018, as compared to the corresponding period in 2017.

Unallocated corporate expenses

These were staff costs and corporate/administrative expenses incurred in relation to the overseeing of both the Group’s local and overseas operations.

1Q 2018 vs 4Q 2017

Fish

The improvement in the operating profit from our ornamental fish by approximately $0.1 million or 50.2% in the current quarter as compared to the previous quarter was in line with the higher revenue recorded and the better margin yielded from the sales of our self-bred Dragon Fish and our ornamental fish export business, notwithstanding the initial start-up costs incurred in relation the Group’s second aquaculture farm in the Hainan Province as mentioned earlier.

Accessories

The shrink in operating profit of our accessories business in the 1st quarter of 2018 as compared to the previous quarter was mainly due to the lower revenue contribution, as well as our on-going efforts to capture more sales, which had sliced off the profit margin of our accessories business in the current quarter.

Plastics

The profitability of the plastics business was affected by lower revenue contribution, as well as gradual increase in overall operational costs quarter-on-quarter.

VARIANCE FROM PROSPECT STATEMENT

There is no variance from the previous prospect statement.

PROSPECTS

The visions of our Group are:
  1. - to be the world’s Number 1 ornamental fish exporter;
  2. - to breed Ornamental Fish of the highest value;
  3. - to establish our “Ocean Free” and “OF” brands as the most recognisable amongst Aquarium Accessories brands in Asia;
  4. - to be an innovative technology company; and
  5. - to produce antibiotic-free, sustainable edible fish for the benefit of our consumers and the environment.
The above-mentioned visions of the Group were announced in detail in our Full Year Financial Statements and Dividend Announcement dated 12 January 2018.

The business landscape continues to be challenging, requiring us to be continually innovative, nimble and agile. Over the years, we have shown ourselves to be resilient, sparing no effort to transform ourselves so as to stay ahead of the competition and to strengthen our business fundamentals. We will continue to focus on innovation to expand our pipeline of compelling products particularly in the areas of filtration, fish nutrition and genetic breeding of unique Dragon Fish. It is also our intention to excel in the sustainable farming of edible fish for the consumer market so as to build our new aquaculture business to be many times bigger than our existing businesses. Barring unforeseen circumstances, the Group will continue to grow its revenue and be profitable in the current financial year.