Frankfurt am Main, 16. April 2014

  • Revenue declined by 39.7 per cent to 117.6 million Euros as expected
  • EBIT margin of 13.6 per cent slightly exceeds guidance
  • Sound financial basis
  • Outlook 2014: Revenue growth of at least 5 to 10 per cent

Frankfurt am Main, April 16, 2014. In 2013 the Chinese seafood processing industry suffered severely from the challenging market environment. In particular the keener market competition, the tighter supply of raw materials as well as the longer inspection time taken by Chinese Inspection and Quarantine Authorities (CIQ) on export-bound products led to lower selling prices and reduced sales volumes also for Haikui Seafood.

Due to the aforementioned reasons affecting Chinese seafood processors, Haikui Seafood's revenue decreased by 39.7 per cent to 117.6 million Euros (2012: 195.1 million Euros). Measured in RMB terms, revenue diminished by approximately 38.9 per cent from RMB 1,585.1 million in 2012 to RMB 968.2 million in 2013. Looking at the two product segments of Haikui Seafood, the difficult external market environment especially affected the frozen products segment. Revenue in this segment declined by 44.9 per cent from 172.2 million Euros in 2012 to 94.8 million Euros in 2013. This was mainly due to a lower sales volume of high value products such as crabs and prawns. Revenue for canned products in contrast decreased slightly - despite a higher sales volume - by 0.5 per cent to 22.8 million Euros (2012: 22.9 million Euros) due to lower average selling price.

Overall gross profit went down by 57.8 per cent to 21.2 million Euros (2012: 50.3 million Euros), resulting in a gross profit margin of 18.0 per cent (2012: 25.8 per cent). Due to the lower revenue and gross margin as well as increased distribution expenses, profit from operations (EBIT) dropped by 63.8 per cent from 44.0 million Euros in 2012 to 15.9 million Euros in 2013, representing an EBIT margin of 13.6 per cent (2012: 22.5 per cent). Net profit amounted to 10.2 million Euros (2012: 32.2 million Euros), resulting in a net profit margin of 8.7 per cent in 2013 (2012: 16.5 per cent).

These results were fully in line with or even above Haikui Seafood's latest guidance given in December 2013, expecting a decrease in revenue in a range between 35 to 45 per cent measured in RMB and an EBIT margin between 11 and 13 per cent for the full year 2013.

Sound financial basis
Despite the very challenging and non-influenceable external factors, Haikui Seafood possesses a very sound financial basis and a resilient business model compared to other Chinese seafood processing companies. At the end of the financial year 2013, Haikui Seafood's cash balance amounted to 49.8 million Euros (31 December 2012: 48.9 million Euros). The equity ratio increased further to 97.4 per cent (31 December 2012: 94.3 per cent).

Outlook 2014: Moderate revenue growth
The challenging external conditions affecting the business of Haikui Seafood are expected to continue in 2014. But with the experience gained in 2013, the management believes that it should be able to better navigate through the tough market conditions in 2014. Given the current situation and although revenue in Q1 2014 is expected to be lower compared to Q1 2013, management expects revenue in RMB terms to increase by at least 5 to 10 per cent in 2014. EBIT margin is estimated to be in the range of 11 to 13 per cent.

Haikui Seafood pursues a clear and efficient business strategy to better respond to the risks and challenges the company is faced with.

"First of all we want to increase the efficiency and productivity of our production through the construction of a new factory. After securing the land use rights and the financing for our new facility in Dongshan at the end of 2013, we have commenced works on the detailed planning. The next operational milestone will be the start of the construction work", says Chen Zhenkui, CEO of Haikui Seafood. Furthermore, the company plans to increase its investments in research and development to broaden its product portfolio, especially the extraction of compounds from marine processing by-products. In addition, Haikui Seafood will continue to focus on its geographical expansion to capture market share and expand its supplier base to secure the supply of raw materials.

After having completed the detailed planning and the groundwork for the new processing facility targeted within the second quarter, construction start is planned for the third quarter of 2014. Completion would take about 1.5 years with contributions from the new facility foreseen for 2016.

The annual report 2013 of Haikui Seafood AG is available on the website under the following link:
http://www.haikui-seafood.com/investor-relations/publikationen/berichte/

About Haikui Seafood AG
Haikui Seafood processes fish and seafood for the Chinese and international markets. Its products range includes frozen or canned fish and seafood, produced from a large variety of species of raw fish and seafood, including prawn, crab, various fish species and shellfish as well as cephalopods. Clients of Haikui Seafood are distributors in China and overseas, located mainly in Asia, the U.S. and Europe. Haikui Seafood employs on average 650 permanent employees and 1,072 additional temporary workers as of December 31, 2013. The company has an annual processing capacity of more than 34,000 tonnes (output). The processing facilities are located in the South-East of China on Dongshan Island, Zhangzhou, Fujian Province. Haikui Seafood operates a streamlined supply chain including self-owned processing facilities, in-house research and product development capacities as well as warehousing and cold storage facilities while simultaneously cooperating closely with raw goods suppliers.

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