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First Quarter Financial Statement Announcement

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year

 

Explanatory notes:

The increase in personnel expenses of $394K for the Group and $196K for the Company is due to the increase in head count and annual salary increment. In addition, Guangzhou Wan Jiang, which became a subsidiary in the 4th quarter of FY 2002, with personnel expenses amounted to $95K for the 3 months ended 31 March 2003, contributed to the increase.

The increase in selling & distribution and other general administration expenses is in line with the expansion of the Group's operations.

 

1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year

 

Explanatory notes:

The decrease in land use rights is mainly due to disposal of land use rights held by one of our subsidiaries in PRC to a third party. Profit from disposal of land use rights amounted to $9,090.

Advance for investment relates to refundable deposit paid in accordance with the Sales and Purchase Agreement for the proposed acquisition of Kim Kang Aquaculture Sdn Bhd, announced on 20 January 2003.

 

1(b)(ii) Aggregate amount of group's borrowings and debt securities


Amount repayable in one year or less, or on demand



As at 31/3/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
NIL	348,454	NIL	357,549



Amount repayable after one year



As at 31/3/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
NIL	636,203	NIL	709,180



Details of any collateral

Not Applicable



1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year

 

 

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year

 

 

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year

 

During the 1st quarter of FY 2003, 87,000 share options were exercised at $0.24 per share pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme ("Pre-IPO Scheme"). As at 31 March 2003, there were 515,000 unexercised share options issued pursuant to the terms of the Pre-IPO Scheme.

In addition, there were options granted to subscribe for 1,569,000 unissued ordinary shares of $0.10 each in the Company at an exercise price of $0.59 per share pursuant to the terms of the Qian Hu Post-IPO Share Option Scheme ("Post-IPO Scheme"). As at 31 March 2003, none of these share options were exercised pursuant to the terms of the Post-IPO Scheme.

 

2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

 

The figures have not been audited or reviewed by the Group's auditors.

 

3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)


Not Applicable



4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied

 

There were no changes in accounting policies and methods of computation adopted in the financial statements for the current reporting period as compared to the most recent audited annual financial statements as at 31 December 2002.

 

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change


Not Applicable



6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends

 

Earnings per ordinary share on existing issued share capital is computed based on the weighted average number of shares in issue during the period of 102,996,100 (31/3/2002: 84,056,916).

Earnings per ordinary share on a fully diluted basis is computed based on the weighted average number of shares during the period adjusted to assume conversion of all potential dilutive ordinary shares of 103,629,392 (31/3/2002: 84,545,489).


 

7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year

 

 

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

 

COMMENTARY

Turnover

For the 3 months ended 31 March 2003, our ornamental fish activities and distribution of accessories continued to be our core activities, which together accounted for 90% of our total turnover in this quarter. Geographically, our Singapore market continued to be our main market accounting for approximately 50% of our total turnover for the 3 months ended 31 March 2003.

Our turnover increased by $3.4 million or 27.3% from $12.5 million for the quarter ended 31 March 2002 to $15.9 million for the quarter ended 31 March 2003. All activities registered growth in turnover. Turnover for ornamental fish, accessories and plastics business increased by $0.8 million or 15.1%, $2.5 million or 44.4% and $0.1 million or 8.4%, respectively in the 1st quarter of FY 2003 as compared to its corresponding period in FY 2002.

Our subsidiary in Thailand (dealing with fish) and the fish division in Malaysia, both commenced their operations in the 1st quarter of FY 2002, contributed 85% of the increase in our fish turnover in the 1st quarter of FY 2003 as compared to the corresponding period in FY 2002. The increase in sales to local fish retail outlets as well as from the expanding China market accounted for the balance of the increase in fish turnover.

With the steady increase in customer base as a result of market share gained from their domestic market, our Malaysia & Thailand subsidiaries (dealing with accessories) contributed approximately 40% of the increase in turnover of accessories in the 1st quarter of FY 2003 . In addition, Guangzhou Wan Jiang, which became a subsidiary in the 4th quarter of FY 2002, contributed 15% of the increase in accessories turnover in the 1st quarter of FY 2003.

Our conscious effort to increase the accessories export from Singapore to more countries has also accounted for approximately 33% of the increase in sales of accessories this quarter.

Our turnover for plastics are experiencing flat growth due to local market competitiveness. We managed to generate more sales through focusing on selling more high-value items and expanding our distribution channel both locally and to overseas.

On a geographical basis, turnover from Singapore grew by 9% mainly as a result of improved sales of fish & aquarium accessories to local retailers while turnover from overseas grew by 52.5% as a result of both the Singapore and overseas operations' constant effort in expanding our distribution network into overseas untapped markets.


Operating profit before taxation

Our operating profit increased by $0.3 million or 20.5% to $1.7 million for the quarter ended 31 March 2003 as compared to $1.4 million for the quarter ended 31 March 2002. Profit after taxation increased by 25.4% from $1 million for the 3 months ended 31 March 2002 to approximately $1.3 million for the 3 months ended 31 March 2003.

During the 1st quarter of FY 2003, our operating profit from ornamental fish dipped notwithstanding the increase in turnover due to reduction in the gross profit margin yielded for certain fish species as compared to its corresponding period in FY 2002. In addition, the lower sales of Dragon Fish (due to shortage in the supply) have affected the profit margin for our fish business.

Our accessories business is the main profit contributor in the 1st quarter of FY 2003. The operating profit from accessories registered growth in the current quarter as a result of the increase in sales volume from both our local and overseas operations. The profit margin from the accessories business remained relatively consistent on a quarter-on-quarter basis.

The flat growth in profitability of our plastics business in the 1st quarter of FY 2003 as compared to the corresponding period in FY 2002 was in line with the minimal increase in its turnover. The business was able to sustain its margins yield and managed to contain its operating costs in spite of the stiff market condition.

Unallocated corporate expenses relate to staff costs and administrative expenses incurred in relation to the overseeing of the Group's operations both locally and overseas. The increase was in line with additional headcount and corporate expenses.

 

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results


Not Applicable



10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months


 

The factors affecting our Group, which we have previously announced in our FY 2002 full-year results, are expected to continue to apply in the next quarter. We will announce any material developments that may have an impact on our Group's performance as and when they arise.

Looking at our results in the first quarter of FY 2003, it is envisaged that our Group will remain on track as regards our FY 2003 turnover and profit forecasts announced earlier this year. We will keep shareholders and the investing public promptly updated on the Group's performance, through our quarterly reporting of our performance and our management's emphasis on timely announcements of material developments.

 

11. Dividend


(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? None
(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? None

(c) Date payable

Not Applicable



(d) Books closure date

Not Applicable




12. If no dividend has been declared/recommended, a statement to that effect


Not Applicable

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

 

13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year

 

SEGMENT INFORMATION

(i) BUSINESS SEGMENTS (The Group)

 

(ii) GEOGRAPHICAL SEGMENTS (The Group)

 

 

14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments


Nat Applicable



15. A breakdown of sales

 

 

 

16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year


Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)



	Latest Full Year ()	Previous Full Year ()
Ordinary	0	0
Preference	0	0
Total:	0	0


 

 

BY ORDER OF THE BOARD

Kenny Yap Kim Lee
Executive Chairman and Managing Director
21/04/2003