This printed article is located at http://qianhu.listedcompany.com/news.html

News

Half Year Financial Statement Announcement

BackJul 21, 2003

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

THE GROUP
-----------
3 months ended
--------
-----------
6 months ended
--------
30/6/2003
$'000
30/6/2002
$'000
Change
%
30/6/2003
$'000
30/6/2002
$'000
Change
%
Turnover
17,263
15,289
12.9
33,205
27,817
19.4
Cost of sales
(10,942)
(9,602)
14.0
(21,027)
(17,575)
19.6
Gross Profit
6,321
5,687
11.2
12,178
10,242
18.9
Other operating income
44
35
25.7
60
64
(6.3)
6,365
5,722
11.2
12,238
10,306
18.8
Selling & distribution expenses
(334)
(389)
(14.1)
(830)
(705)
17.7
Personnel expenses
(2,056)
(1,727)
19.1
(4,061)
(3,338)
21.7
Exchange gain
50
8
525.0
46
9
411.1
Other general & administration expenses
(1,476)
(1,332)
10.8
(3,104)
(2,542)
22.1
Interest expenses
(60)
(44)
36.4
(101)
(86)
17.4
Interest income
0
0
NM
1
0
100.0
Operating profit before taxation
2,489
2,238
11.2
4,189
3,644
15.0
Share of associates results
-
19
(100.0)
-
24
(100.0)
2,489
2,257
10.3
4,189
3,668
14.2
Taxation
(495)
(395)
25.3
(870)
(775)
12.3
1,994
1,862
7.1
3,319
2,893
14.7
Minority interest
(52)
11
572.7
(68)
24
383.3
Net profit attributable to members of the Company
1,942
1,873
3.7
3,251
2,917
11.5
Depreciation & amortisation included in :
- Cost of sales
50
13
81
19
- General & administration expenses
337
345
662
683
387
358
8.1
743
702
5.8
Gross profit margin
36.6%
37.2%
36.7%
36.8%
Net profit margin
11.2%
12.3%
9.8%
10.5%

Explanatory notes:

For the 6 months ended 30 June 2003, the increase in personnel expenses of $723K for the Group 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 2002, recorded personnel expenses of $227K for the 6 months ended 30 June 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.

Group
Group
Company
Company
30/6/2003
$
31/12/2002
$
30/6/2003
$
31/12/2002
$
Share capital and reserves
Share capital
10,308,970
10,297,070
10,308,970
10,297,070
Reserves
19,860,668
17,580,344
15,804,532
14,525,186
30,169,638
27,877,414
26,113,502
24,822,256
Minority interests
415,188
348,564
-
-
30,584,826
28,225,978
26,113,502
24,822,256
Fixed assets
7,715,488
7,818,045
4,415,295
4,468,406
Biological assets
1,357,335
1,371,930
1,357,335
1,371,930
Subsidiaries
-
-
2,679,640
2,679,640
Associate
-
-
28,722
28,722
Quoted equity investments,
at cost
3,820
3,820
-
-
Trademarks/customer acquisition cost, product listing fees
69,839
87,913
59,235
74,193
Land use rights
92,543
212,653
-
-
Advance for investment
500,000
-
500,000
-
Current assets
Stocks
13,460,454
12,876,214
5,037,523
4,438,586
Trade debtors
12,919,568
12,351,805
7,033,313
7,087,826
Other debtors, deposits and prepayments
1,097,603
786,805
412,072
201,108
Due from
- subsidiaries (trade)
-
-
7,390,346
7,181,985
- subsidiaries (non-trade)
-
-
1,772,559
1,927,720
- associates (trade)
547,353
406,452
547,353
406,452
Fixed deposits
101,116
101,116
22,568
22,568
Cash and bank balances
5,997,034
7,719,571
4,518,168
6,251,412
34,123,128
34,241,963
26,733,902
27,517,657
Current liabilities
Trade creditors
4,752,285
5,809,629
2,739,880
3,328,248
Bills payable to bank
2,636,175
3,204,880
2,636,175
3,204,880
Other creditors and accruals
2,566,660
3,218,628
2,010,790
2,435,455
Due to subsidiaries (trade)
-
-
88,821
84,104
Hire purchase creditors,
current portion
308,521
357,549
169,665
163,635
Bank term loan (unsecured)
245,920
-
-
-
Provision for taxation
1,700,859
1,854,013
1,302,680
1,330,990
12,210,420
14,444,699
8,948,011
10,547,312
Net current assets
21,912,708
19,797,264
17,785,891
16,970,345
Non-current liabilities
Hire purchase creditors, non-current portion
(710,440)
(709,180)
(454,616)
(512,980)
Deferred taxation
(356,467)
(356,467)
(258,000)
(258,000)
30,584,826
28,225,978
26,113,502
24,822,256
Stock turnover (days)
88
88
40
42
Trade debtors turnover (days)
62
62
44
46
Debt Equity Ratio
0.44
0.56
0.37
0.46


Explanatory notes:

The decrease in land use rights is mainly due to the 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 deposit paid in accordance with the Sales and Purchase Agreement for the acquisition of Kim Kang Aquaculture Sdn Bhd, announced on 20 January 2003.

THE GROUP
3 months ended30/6/2003
3 months ended 30/6/2002
6 months ended 30/6/2003
6 months ended 30/6/2002
Cash flows from operating activities
Profit before taxation and minority interest
2,489,118
2,257,501
4,189,196
3,668,166
Adjustments for:
Depreciation of fixed assets
374,981
317,801
719,615
614,264
Profit on disposal of fixed assets
(17,597)
(30,000)
(5,844)
(30,000)
Profit on disposal of land use rights
-
-
(9,090)
-
Fixed assets written off
-
-
4,294
-
Amortisation of
- land use rights
501
1,672
1,002
4,361
- trademarks/customer acquisition costs,
product listing fees
11,304
38,481
22,415
83,623
Provision for doubtful trade debts
100,655
89,589
162,710
139,589
Share of profit of associated companies
-
(19,503)
-
(24,096)
Interest expense
60,269
43,662
101,300
86,098
Interest income
(723)
-
(1,613)
-
Net effect of exchange differences
(63,874)
64,295
(57,484)
29,345
Operating profit before working capital changes
2,954,634
2,763,498
5,126,501
4,571,350
(Increase) decrease in:
Stocks
(207,334)
(1,161,101)
(584,240)
(1,195,475)
Trade debtors
(786,145)
(1,294,725)
(730,473)
(1,798,106)
Other debtors, deposits and prepayments
(81,161)
(158,128)
(310,798)
(29,500)
Due from
- holding company (non-trade)
-
550
-
-
- associates (trade)
(94,549)
(15,009)
(140,901)
(499,815)
- associates (non-trade)
-
10,551
-
(145,185)
Increase (decrease) in:
Trade creditors
(338,328)
1,461,159
(1,057,344)
933,931
Bills payable to bank
(961,419)
288,588
(568,705)
238,453
Other creditors and accruals
(33,731)
572,162
(651,968)
491,480
Due to directors (non-trade)
-
(656)
-
(656)
Cash generated from operations
451,967
2,466,889
1,082,072
2,566,477
Payment of income tax
(458,436)
(430,432)
(1,023,154)
(442,122)
Interest paid
(60,269)
(43,662)
(101,300)
(86,098)
Net cash generated from (used in) operating activities
(66,738)
1,992,795
(42,382)
2,038,257
Cash flows from investing activities
Purchase of fixed assets
(441,463)
(325,512)
(665,090)
(961,872)
Advance for investment
-
-
(500,000)
-
Proceeds from disposal of
- fixed assets
18,367
30,000
257,283
30,000
- land use rights
-
-
127,200
-
Payment for trademarks/customer acquisition cost, product listing fees
(923)
(4,726)
(4,341)
(9,620)
Net cash used in investing activities
(424,019)
(300,238)
(784,948)
(941,492)
Cash flows from financing activities
Proceeds from issue of new shares (net)
7,680
4,369,568
28,560
4,457,168
Proceeds from bank term loan
245,920
-
245,920
-
Repayment of
- hire purchase creditors
(124,608)
(77,841)
(206,680)
(160,682)
- term loan
-
(49,998)
-
(99,996)
Payment of dividend
(964,620)
(376,860)
(964,620)
(376,860)
Interest received
723
-
1,613
-
Net cash generated from (used in) financing activities
(834,905)
3,864,869
(895,207)
3,819,630
Net increase (decrease) in cash and cash equivalents
(1,325,662)
5,557,426
(1,722,537)
4,916,395
Cash and cash equivalents at beginning of period
7,423,812
694,095
7,820,687
1,335,126
Cash and cash equivalents at end of period
6,098,150
6,251,521
6,098,150
6,251,521
Cash and cash equivalents comprises :
Fixed deposits
101,116
597,839
101,116
597,839
Cash and bank balances
5,997,034
5,653,682
5,997,034
5,653,682
Cash and cash equivalents at end of period
6,098,150
6,251,521
6,098,150
6,251,521
THE GROUP
Share
Capital
$
Share premium
$
Revenue reserve
$
Translation reserve
$
Total
$
Balance at 1 Jan 2002
8,276,200
2,083,567
6,607,103
205,170
17,172,040
Currency translation differences
-
-
-
(65,870)
(65,870)
Net profit for the period
-
-
1,043,587
-
1,043,587
Issue of new shares
36,500
51,100
-
-
87,600
Capitalisation of share premium for bonus shares
831,270
(831,270)
-
-
-
Balance at 31 Mar 2002
9,143,970
1,303,397
7,650,690
139,300
18,237,357
Currency translation differences
-
-
-
(70,985)
(70,985)
Net profit for the period
-
-
1,873,464
-
1,873,464
Payment of final dividend
-
-
(376,860)
-
(376,860)
Issue of new shares
1,071,800
3,600,520
-
-
4,672,320
Share issue expenses
-
(302,753)
-
-
(302,753)
Balance at 30 June 2002
10,215,770
4,601,164
9,147,294
68,315
24,032,543
Currency translation differences
-
-
-
33,004
33,004
Net profit for the period
-
-
1,885,557
-
1,885,557
Issue of new shares
2,800
3,920
-
-
6,720
Balance at 30 Sept 2002
10,218,570
4,605,084
11,032,851
101,319
25,957,824
Currency translation differences
-
-
-
(13,561)
(13,561)
Net profit for the period
-
-
1,744,751
-
1,744,751
Issue of new shares
78,500
109,900
-
-
188,400
Balance at 31 Dec 2002
10,297,070
4,714,984
12,777,602
87,758
27,877,414
Currency translation differences
-
-
-
(9,183)
(9,183)
Net profit for the period
-
-
1,308,516
-
1,308,516
Issue of new shares
8,700
12,180
-
-
20,880
Balance at 31 Mar 2003
10,305,770
4,727,164
14,086,118
78,575
29,197,627
Currency translation differences
-
-
-
(12,942)
(12,942)
Net profit for the period
-
-
1,941,893
-
1,941,893
Payment of final dividend
-
-
(964,620)
-
(964,620)
Issue of new shares
3,200
4,480
-
-
7,680
Balance at 30 June 2003
10,308,970
4,731,644
15,063,391
65,633
30,169,638
THE COMPANY
Share
Capital
$
Share premium
$
Revenue reserve
$
Total
$
Balance at 1 Jan 2002
8,276,200
2,083,567
5,381,485
15,741,252
Net profit for the period
-
-
916,775
916,775
Issue of new shares
36,500
51,100
-
87,600
Capitalisation of share premium for bonus shares
831,270
(831,270)
-
-
Balance at 31 Mar 2002
9,143,970
1,303,397
6,298,260
16,745,627
Net profit for the period
-
-
1,314,552
1,314,552
Payment of final dividend
-
-
(376,860)
(376,860)
Issue of new shares
1,071,800
3,600,520
-
4,672,320
Share issue expenses
-
(302,753)
-
(302,753)
Balance at 30 June 2002
10,215,770
4,601,164
7,235,952
22,052,886
Net profit for the period
-
-
1,214,778
1,214,778
Issue of new shares
2,800
3,920
-
6,720
Balance at 30 Sept 2002
10,218,570
4,605,084
8,450,730
23,274,384
Net profit for the period
-
-
1,359,472
1,359,472
Issue of new shares
78,500
109,900
-
188,400
Balance at 31 Dec 2002
10,297,070
4,714,984
9,810,202
24,822,256
Net profit for the period
-
-
848,909
848,909
Issue of new shares
8,700
12,180
-
20,880
Balance at 31 Mar 2003
10,305,770
4,727,164
10,659,111
25,692,045
Net profit for the period
-
-
1,378,397
1,378,397
Payment of final dividend
-
-
(964,620)
(964,620)
Issue of new shares
3,200
4,480
-
7,680
Balance at 30 Jun 2003
10,308,970
4,731,644
11,072,888
26,113,502
Number of shares
$
Share capital
- ordinary shares of $0.10 each
Issued and fully paid
Balance as at 1 January 2003
102,970,700
10,297,070
Issue of new shares
- Exercise of employees' share options
119,000
11,900
Balance as at 30 June 2003
103,089,700
10,308,970

During the 2nd quarter of 2003, 32,000 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 30 June 2003, there were 483,000 unexercised share options issued pursuant to the terms of the Pre-IPO Scheme.

In addition, there were options granted to subscribe for 1,547,000 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 30 June 2003, none of these share options were exercised pursuant to the terms of the Post-IPO Scheme.

With the completion of the acquisition of Kim Kang Aquaculture Sdn Bhd in July 2003, the Company issued 2,923,769 new ordinary shares to the vendors as partial consideration for a 65% equity stake in that company. The new shares rank pari passu in all respect with the existing shares of the Company.

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

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.

3 months ended 30/6/2003
(2Q 2003)
3 months ended 30/6/2002
(2Q 2002)
6 months ended 30/6/2003
6 months ended 30/6/2002
Earnings per share (EPS)
(based on consolidated profit after taxation and minority interest)
- on weighted average number of shares
1.88 cents
2.05 cents
3.16 cents
3.19 cents
- on a fully diluted basis
1.87 cents
2.03 cents
3.14 cents
3.15 cents
Group
Group
Company
Company
30/6/2003
31/12/2002
30/6/2003
31/12/2002
Net asset value per share based on existing issued share capital as at the respective period
29.67
cents
27.41
cents
25.33
cents
24.11
cents


COMMENTARY

Turnover

First half 2003 vs
First half 2002
1st Half 2003
$'000
1st Half 2002
$'000
Increased
(Decreased)
$'000
%
Fish
13,074
11,990
1,084
9.0
Accessories
16,875
12,560
4,315
34.4
Plastics
3,256
3,267
(11)
(0.3)
33,205
27,817
5,388

For the first half of 2003, our ornamental fish activities and distribution of accessories continued to be our core activities, which together accounted for 90% of our total turnover. Our turnover increased by $5.4 million or 19.4% from $27.8 million for the 6 months ended 30 June 2002 to $33.2 million for the 6 months ended 30 June 2003.


2Q 2003 vs 2Q 2002

2nd Quarter 2003 vs
2nd Quarter 2002
2Q 2003
$'000
2Q 2002
$'000
Increased
(Decreased)
$'000
%
Fish
6,767
6,512
255
3.9
Accessories
8,871
7,015
1,856
26.5
Plastics
1,625
1,762
(137)
(7.8)
17,263
15,289
1,974

Our turnover increased by approximately $2 million or 12.9% from $15.3 million for the quarter ended 30 June 2002 to $17.3 million for the quarter ended 30 June 2003. Turnover for ornamental fish and accessories increased by $0.3 million or 3.9% and $1.9 million or 26.5% respectively, while plastics activities registered a reduction of $0.1 million or 7.8% in the 2nd quarter of 2003 as compared to its corresponding period in 2002.

As compared to the corresponding period in 2002, our subsidiary in Thailand (dealing with fish) and the fish division in Malaysia, both commenced their operations in the first quarter of 2002, achieved higher turnover in the 2nd quarter of 2003. The sales contributions from local fish retails outlets have remained relatively consistent in the current quarter.

Our conscientious effort to increase our accessories export from Singapore to more countries has accounted for approximately 51% of the increase in sales of accessories this quarter as compared to its corresponding period in 2002. In addition, with Guangzhou Wan Jiang became our subsidiary in the 4th quarter of 2002, its sales has constituted to the increase in accessories turnover in the 2nd quarter of 2003. However, the above-mentioned increase was partially offset by lower turnover from Singapore domestic market due to lower demand for accessories products during the SARS period.

Our turnover for plastics recorded a lower turnover in the 2nd quarter of 2003 due to local market competitiveness. We continued to focus on generating sales through selling more high-yielded items and expanding our distribution channel to outside Singapore.

On a geographical basis, turnover from Singapore dipped by 7.5% mainly as a result of decrease in sales of aquarium accessories to local retailers. Turnover from overseas grew by 52.2% this quarter as compared to the corresponding period in 2002. Both the Singapore and overseas operations' constant effort in expanding our distribution network into overseas untapped markets contributed to the increased in overseas turnover.


2Q 2003 vs 1Q 2003

2nd Quarter 2003 vs
1st Quarter 2003
2Q 2003
$'000
1Q 2003
$'000
Increased
(Decreased)
$'000
%
Fish
6,767
6,307
460
7.3
Accessories
8,871
8,004
867
10.8
Plastics
1,625
1,631
(6)
(0.4)
17,263
15,942
1,321

Our turnover for the 2nd quarter of 2003 was $1.3 million or 8.3% higher than the 1st quarter of 2003 arising from both fish and accessories activities.

Fish turnover was $0.5 million or 7.3% higher in the 2nd quarter of 2003 as compared to the 1st quarter of 2003 largely due to the continuous growth recorded by Thai Qian Hu, our subsidiary in Thailand (dealing with fish) and the fish division under Guan Guan, Malaysia.

As compared to 1st quarter of 2003, the increase in accessories turnover by $0.9 million or 10.8% in the 2nd quarter of 2003 was mainly due to increase sales contribution from our China operations.

Our plastics turnover recorded in the current quarter was comparable to that of the previous quarter.


Profitability

First half 2003 vs
First half 2002
1st Half 2003
$'000
1st Half 2002
$'000
Increased
(Decreased)
$'000
%
Fish
1,956
1,638
318
19.4
Accessories
2,745
2,552
193
7.6
Plastics
192
158
34
21.5
Unallocated corporate expenses
(704)
(680)
(24)
(3.5)
4,189
3,668
521

Our operating profit increased by $0.5 million or 14.2% to $4.2 million for the 6 months ended 30 June 2003 as compared to $3.7 million for the 6 months ended 30 June 2002. Our accessories business, which contributed approximately 66% of profit, was the main profit contributor in the first half of 2003.


2Q 2003 vs 2Q 2002

2nd Quarter 2003 vs
2nd Quarter 2002
2Q 2003
$'000
2Q 2002
$'000
Increased
(Decreased)
$'000
%
Fish
1,339
939
400
42.6
Accessories
1,334
1,551
(217)
(14.0)
Plastics
132
102
30
29.4
Unallocated corporate expenses
(316)
(335)
19
5.7
2,489
2,257
232

During the 2nd quarter of 2003, our operating profit from ornamental fish was $0.4 million or 42.6% higher than that achieved in the 2nd quarter of 2002, mainly due to the increase in the sales of own-bred Dragon Fish, which yielded a higher gross profit margin as compared to the sales mix in the corresponding period in 2002.

Our operating profit from accessories dipped in the current quarter by $0.2 million or 14% as a result of reduction in gross profit margin yielded from our both local and overseas operations due to keener competition and more promotions during the SARS period.

The slight increase in profitability from our plastics business in the 2nd quarter of 2003 as compared to the corresponding period in 2002 was due to more sales generated from high value items. The business was able to improve 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.


2Q 2003 vs 1Q 2003

2nd Quarter 2003 vs
1st Quarter 2003
2Q 2003
$'000
1Q 2003
$'000
Increased
(Decreased)
$'000
%
Fish
1,339
617
722
117.0
Accessories
1,334
1,411
(77)
(5.5)
Plastics
132
60
72
120.0
Unallocated corporate expenses
(316)
(388)
72
18.6
2,489
1,700
789

Our operating profit for the 2nd quarter of 2003 was $0.8 million or 46.4% higher than the 1st quarter of 2003 due to better performance from our fish business.

Compared to 1st quarter of 2003, our operating profit from the fish activities surged $0.7 million or 117% as a result of increase in profit derived from the sales of own-bred Dragon Fish in the 2nd quarter of 2003. The low sales of Dragon Fish (due to shortage in the supply) have affected the profit margin of our fish business in the previous quarter.

Notwithstanding the increase in turnover, the flat growth in profitability of accessories business in the current quarter as compared to that of the 1st quarter of 2003 was due to reduction in gross profit margin yielded.

Our operating profit from plastics activties registered growth in the current quarter as a result of better product mix and improved profit margins.

Lower unallocated corporate expenses recorded in the 2nd quarter of 2003 was largely due to certain non-recurring expenses incurred during the 1st quarter of 2003.

We expect our Group to maintain a healthy growth in turnover and overall profitability for the current year in our sales of ornamental fish and accessories in Singapore and to the export markets. We, however, expect bulk of our growth to be from our overseas operations in the PRC, Malaysia and Thailand, as our regional distribution networks are now fully operational and well established.

Fish

We envisage an increasing demand for Dragon Fishes in our regional markets, particularly in our new markets in Taiwan and the PRC, in the coming years. With the completion of the acquisition of Kim Kang Aquaculture Sdn Bhd ("Kim Kang") in July 2003, our Group is able to strengthen our position as an integrated fish service provider by further backward integrating our fish operations and optimizing our sales and profit margins of ornamental fish. It will also enhance our Group's ability to ride the growth in demand for Dragon Fish in the current year as well as in the coming years.

In addition, we have obtained a CITES II licence for successfully breeding the second generation of Araipaima - the world's largest freshwater fish. This would improve our sales and profit margin deriving from ornamental fish.

The ornamental fish division in Guan Guan, our subsidiary in Malaysia, and Thai Qian Hu, our subsidiary in Thailand, both set up in early 2002, are now fully operational. We will commence export fish in Malaysia this year, and will also export more fish to increasing number of countries from Thailand, adding a further positive contribution to our fish turnover from overseas.

Accessories

Guan Guan, which managed to increase its turnover and profitability significantly in FY 2002, is expected to maintain the grow of its accessories sales this year. We have expanded our distribution network in Malaysia and this should facilitate our growth in the sales of accessories. Guan Guan is also expected to receive a long-term boost from a newly incorporate joint venture company, PLC Pet Safari (Kuala Lumpur) Sdn Bhd, dealing with the provision of pet food, pet accessories and other ancillary services in Malaysia. However, the joint venture company, which should be operational by this year end, is not expected to contribute significantly to our Group's results this year.

Qian Hu Marketing in Thailand became operationally profitable in 2002. In June 2003, we started a retail cum wholesale concept in Bangkok by setting up a showroom in the Jautijak distribution center (weekend market). This should enable us to further expand our domestic distribution network in Thailand.

We are also in the process of executing a marketing plan to increase the market sales of accessories in the PRC. This is undertaken through the establishment of an accessories marketing and distribution center in Shanghai which will actively promote and drive our accessories sales to the municipalities surrounding Shanghai (central PRC) and supported by Wan Jiang in Guangzhou (the southern region of the PRC) and Qian Yang in Beijing (the northern region of the PRC). We believe this will enhance our growth and profitability in our accessories business in the PRC.

International Headquarters ("IHQ") Award

In July 2003, the Economic Development Board has granted a Development and Expansion Incentive ("DEI") under the International Headquarters ("IHQ") Award to the Company. With the incentive, the Company will enjoy a concessionary tax rate of 10% on its qualifying income for a period of five years commencing 1 January 2003.


With the steady performance from our Singapore operations, coupled with positive contributions from our overseas operations in Malaysia, Thailand and China, accordingly, our directors envisage our Group's turnover and profit will continue to increase in the second half of 2003.


Risk factors

Outbreak of diseases and infection

Ornamental fish, like other livestock, is susceptible to disease and infection. However, different breeds of fishes are vulnerable to different types of diseases. While it is possible that a rare or virulent strain of bacteria or virus may infect a particular breed of fish in the farm, fatal infection across breeds is uncommon. We have institutionalized a comprehensive health management and quarantine system for all our domestic and overseas operations to ensure a consistently high standard of good health care management and hygiene for our fishes. Currently, all our domestic and overseas fish operations have attained ISO certification.

We will also institutionalize our comprehensive health management and quarantine system in the newly acquired Kim Kang to minimize any problems regarding health care and hygiene. It should be noted that Kim Kang breeds mainly Dragon Fish which is a very robust and hardy fish existing since pre-historic times. Any disease or bacteria strong enough to affect the Dragon Fish is expected to be very rare.

Suppliers and customers and general business risks

None of our suppliers or customers contribute more than 5% of our Group's turnover. While our Group faces the normal business risks associated with ageing collections and slow moving stocks, we have adopted a prudent accounting policy of a general 10% provision for all trade debts overdue for more than 120 days and a full provision for all non-moving stocks of a duration of more than 6 months.

Not reliant on the sale of any particular type of fish

For the 6 months ended 30 June 2003, our Dragon Fish sales contributed approximately 15% of the fish sales and 6% of the Group total turnover. We sell over 500 species and varieties of ornamental fishes to more than 60 countries and are not reliant on the sale of any particular type or specimen of fish. Even after the acquisition of Kim Kang, our Group will not be reliant on the sale of the Dragon Fish because of our critical spread of fishes that we sell.

Fluctuations in foreign exchange currencies against the Sing Dollar

For the first half of 2003, approximately 70% of our sales were denominated in Singapore Dollars. Around 50% of our supplies were purchased in Sing Dollars, while the rest were in Euros, US dollars and the Yen. While our Group does not have any formal hedging policy against foreign exchange fluctuations, we continuously monitor the exchange rates of the major currencies and enter into hedging contracts with our banks from time to time whenever we detect any movements in the respective exchange rates which may impact on our profitability.

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


(i) BUSINESS SEGMENTS (The Group)

30/6/2003
Fish
$'000
Accessories
$'000
Plastics
$'000
Eliminations
$'000
Total
$'000
TURNOVER
External sales
13,074
16,875
3,256
-
33,205
Inter-segment sales
1,161
6,223
609
(7,993)
-
Total sales
14,235
23,098
3,865
(7,993)
33,205
RESULTS
Segment results
1,965
2,832
196
36
5,029
Unallocated expenses
(740)
4,289
Financial expenses - net
(100)
Share of profit of associated company
-
Taxation
(870)
Minority interests
(68)
Net profit for the period
3,251
Net profit margin
15.0%
16.8%
6.0%
9.8%
ASSETS & LIABILITIES
Assets
13,176
23,412
4,752
-
41,340
Investment in associated company
-
Unallocated assets
2,522
Total assets
43,862
Liabilities
3,365
7,047
1,116
-
11,528
Unallocated liabilities
1,749
Total liabilities
13,277
OTHER INFORMATION
Capital expenditure
225
501
98
-
824
Depreciation and amortisation
307
278
158
-
743
Other non-cash expenses (income)
160
(13)
5
-
152


 

30/6/2002
Fish
$'000
Accessories
$'000
Plastics
$'000
Eliminations
$'000
Total
$'000
TURNOVER
External sales
11,990
12,560
3,267
-
27,817
Inter-segment sales
585
3,767
636
(4,988)
-
Total sales
12,575
16,327
3,903
(4,988)
27,817
RESULTS
Segment results
1,645
2,569
163
(82)
4,295
Unallocated expenses
(565)
3,730
Financial expenses - net
(86)
Share of profit of associated companies
24
Taxation
(775)
Minority interest
24
Net profit for the period
2,917
Net profit margin
13.7%
20.2%
5.0%
10.5%
ASSETS & LIABILITIES
Assets
12,348
15,480
5,418
-
33,246
Investment in associated companies
368
Unallocated assets
2,440
Total assets
36,054
Liabilities
3,466
5,151
1,470
-
10,087
Unallocated liabilities
1,895
Total liabilities
11,982
OTHER INFORMATION
Capital expenditure
751
525
162
-
1,438
Depreciation and amortisation
298
249
155
-
702
Other non-cash expenses (income)
140
-
(30)
-
110



(ii) GEOGRAPHICAL SEGMENTS (The Group)

Turnover
Turnover
Assets
Assets
Capital expenditure
Capital expenditure
30/6/2003
$'000
30/6/2002
$'000
30/6/2003
$'000
30/6/2002
$'000
30/6/2003
$'000
30/6/2002
$'000
Singapore
15,813
15,549
26,813
27,352
356
737
Other Asian
countries
13,164
8,429
17,049
8,702
468
701
Europe
3,058
2,973
-
-
-
-
Others
1,170
866
-
-
-
-
Total
33,205
27,817
43,862
36,054
824
1,438


 

TURNOVER
Fish
$'000
Accessories
$'000
Plastics
$'000
Total
$'000
2Q 2003
Singapore
(including domestic sales & sales to Singapore)
3,035
3,240
1,625
7,900
Overseas
(including export to & sales in overseas)
3,732
5,631
-
9,363
Total sales
6,767
8,871
1,625
17,263
2Q 2002
Singapore
3,014
3,785
1,738
8,537
Overseas
3,498
3,230
24
6,752
Total sales
6,512
7,015
1,762
15,289
TURNOVER
Fish
$'000
Accessories
$'000
Plastics
$'000
Total
$'000
6 months ended 30/6/2003
Singapore
6,097
6,460
3,256
15,813
Overseas
6,977
10,415
-
17,392
Total sales
13,074
16,875
3,256
33,205
6 months ended 30/6/2002
Singapore
5,558
6,762
3,229
15,549
Overseas
6,432
5,798
38
12,268
Total sales
11,990
12,560
3,267
27,817

BY ORDER OF THE BOARD

Kenny Yap Kim Lee
Executive Chairman and Managing Director
21/07/2003


Please read our General Disclaimer & Warning carefully.
Use of this Website constitutes acceptance of the Terms of Website Use.
Copyright © 2024. ListedCompany.com. All Rights Reserved.