2014

Pingtan Marine Enterprise Reports Financial Results for the Fourth Quarter and Year-Ended December 31, 2013 Company to Hold Conference Call on Tuesday, March 11 2014, at 8:00 AM ET

Company Reiterates Net Income Guidance for 2014

FUZHOU, China, March 10, 2014 /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 financial results for its fourth quarter and year ended December 31, 2013.

2013 Financial Highlights (all results are compared to prior year)

  • Revenue from continuing operations (the "fishing business") increased 81.8% to $122.7 million from $67.5 million, largely as a result of an increase in sales volume and unit selling price.
  • Gross profit increased to $46.9 million from $25.6 million, and gross margin was 38.2% compared to 37.9%, due to an increase in unit selling price and change in product mix of frozen fish.
  • Net income from the fishing business increased 113.6% to $45.5 million, or $0.58 per diluted share, from $21.3 million, or $0.27 per diluted share. 
  • Pingtan exceeded its previously announced 2013 net income guidance of between $40 and $43 million with $45.5 million.

Commenting on the results, Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We are delighted to complete fiscal year 2013 and begin a brand new chapter for Pingtan in 2014.  With the completion of the sale of our dredging operations, Pingtan can now focus on pursuing growth opportunities in its fishing business. We are very pleased to report that in 2013, Pingtan achieved year-over-year increases in revenue, gross profit margin, and net income.  Looking ahead, our strategic priorities will be to continue expanding our sales network by pursuing new customers and extending our business and marketing into new provinces and regions throughout China.  In addition, we continue to move forward in our goal of becoming a vertically integrated provider of seafood products.  We recently entered into a strategic cooperation framework agreement with China Co-op (Hainan) Industry Development Co., Ltd. for our two companies to work together, and expect to build and utilize a new fish processing plant to sell directly to end markets by the end of 2015."

2013 Fleet Development

  • The Company expanded its fleet from 40 to 86 through a purchase transaction of 46 fishing vessels for a total consideration of $410.1 million in June 2013 from related parties.
  • In September 2013, The Company further increased its fleet to 106 with the addition of 20 newly-built fishing vessels, which were initially ordered in September 2012.  
  • In December 2013, the Company further expanded its fleet to 126 vessels with the addition of 20 new fishing vessels from a related party by entering into a 25-year contract providing the Company with exclusive operating license rights for those 20 new fishing vessels.

All of these vessels are fully licensed to fish in Indian and Indonesian waters, and are capable of harvesting 900 to 1,000 tons of fish annually at full operation.  The Company currently has 114 of these vessels operating in Arafura Sea in Indonesia, and the remaining 12 vessels are operating in the Bay of Bengal in India. Among the 126 vessels, 40 vessels added in September and December of 2013 have an expected run-in period of 3 - 6 months, in which each was placed into the sea for testing prior to full operation. All of these vessels are expected to be fully operating during the second quarter of 2014. Currently, Pingtan catches nearly 30 different species of fish including ribbon fish, Indian white shrimp, croaker fish, pomfret, Spanish mackerel, conger eel, squid and red snapper.  All fish caught by the Company are shipped back to China and transported to cold storage warehouse facilities at nearby onshore fishing bases in Fuzhou, China.  The Company then arranges periodic chartered transportation to deliver the frozen fish to its eight cold storage warehouses located in one of China's largest seafood trading centers, Mawei Seafood Market in Fujian Province.

The Company encourages investors to review detailed information on each vessel (including age of vessel / tonnage capacity) and revenue breakdown from its catch available in its 2013 Annual Report on Form 10-K.

2013 Selected Financial Highlights (A)

($ in millions, except per share data)

Three Months ended
December 31

Year Ended
December 31,


2013

2012

2013

2012

2011(A)

Fishing Business (continuing operations)






Revenue

$61.0

$28.4

$122.7

$67.5

$25.6

Cost of Revenue

36.8

13.3

75.8

41.9

14.6

Gross Profit

24.2

15.1

46.9

25.6

11.0

Gross Profit Margin

39.7%

53.2%

38.2%

37.9%

28.2%

Net Income from Fishing Business

28.1

10.7

45.5

21.3

10.4

Basic and Diluted Weighted Average Shares

79.1

79.1

79.1

79.1

79.1

EPS (from continuing operations)(in $)

$0.36

$0.14

$0.58

$0.27

$0.13










       Period from Jan 1 to

Year Ended December 31,




Dec 4, 2013 (Disposal date)

2012

2011(A)

Dredging Services (discontinued operations)






Revenue



$161.5

$209.6

$227.0

Net Income



51.9

84.5

90.3

EPS (from discontinued operations)(in $)



$0.65

$1.07

$1.14


Balance Sheet Highlights (A)




12/31/2013

12/31/2012


Cash and Cash Equivalents



$8.2

$10.4


Total Current Assets



28.8

437.4


Total Assets



357.9

484.0


Total Current Liabilities



51.2

67.0


Total Long-term Debt, net of current portion



54.5

16.7


Total Liabilities



105.7

83.7


Shareholders' Equity



252.2

400.3


Total Liabilities and Shareholders' Equity



357.9

484.0


Book Value Per Share (in $)



$3.19

$5.06


(A)

Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2012 rather than on February 25, 2013. Assets and liabilities of discontinued operations are   retrospectively restated as of December 31, 2012 after taking into account the Group's plan to sell China Dredging Group Co., Ltd. and its subsidiaries to the Company's Chairman, CEO and major shareholder, Mr. Xinrong Zhuo.

Consolidated Financial and Operating Review

Revenues

Revenues from the fishing business, sales of frozen fish and other marine catches (continuing operations) for the three months ended December 31, 2013, increased by 114.7% to $61.0 million from $28.4 million for the same period in 2012. The increase was primarily due to increases in sales volume as a result of the addition of 66 new fishing vessels in June and September 2013, most of which began operating in the third quarter of the year and reached full operating capacity in the fourth quarter, and due to increases in unit selling price.

For the year ended December 31, 2013, the Company's revenue from its fishing business, sales of frozen fish and other marine catches (continuing operations) increased by 81.8% to $122.7 million from $67.5 million in the year ended December 31, 2012, the increase was due to the same reasons described above.

Gross Margin

The Company's gross margin for fishing business was 39.7% for the three months ended December 31, 2013, compared to 53.2% in the prior year period.  The lower gross margin was largely due to recently purchased vessels gradually improving toward full capacity during the fourth quarter.

The Company's gross margin for the fishing business increased slightly to 38.2% in the fiscal year ended December 31, 2013 from 37.9% in the same period of 2012. The increase was primarily due to an increase in unit selling price and a change in the product mix of frozen fish and other marine products, partially offset by recently purchased vessels gradually improving toward full capacity in the second half of 2013.

Selling, General & Administrative Expenses

For the three months ended December 31, 2013, total selling, general and administrative expenses for the fishing business was $1.7 million, or 2.8% of revenue, compared to $2.3 million, or 8.1% of revenue, in the same period of 2012. The decrease was primarily due to the Company's revenues growing in excess of its current corporate costs as it reaches effective scale.

In the fiscal year ended December 31, 2013, total selling, general and administrative expenses for the fishing business was $4.8 million, or 3.9% of revenue, compared to $3.5 million, or 5.2% of revenue, in the same period of 2012. The increase was primarily attributable to higher selling expenses including storage and transportation fees, professional fees as a result of the initial stages of expanding operations, and increased administrative costs associated with the Company being a publicly listed company.

Net Income From Fishing Business

Net income from the fishing business for the three months ended December 31, 2013 was $28.1 million, or $0.36 per basic and diluted share, compared to $10.7 million, or $0.14 per basic and diluted share, in the same period of 2012. The increase was primarily due to an increase in sales volume as a result of the addition of 66 new fishing vessels in June and September 2013, most of which began operating in the third quarter of the year, and due to an increase in unit selling price. 

Net income from the fishing business in the year ended December 31, 2013 was $45.4 million, or $0.58 per basic and diluted share, increased $24.1 million from $21.3 million, or $0.27 per basic and diluted share, in the same period of 2012. The increase was primarily due to the same reasons described above.

Outlook for 2014

Based on its current fleet capacity, strong demand for fishing products in China and continued efforts in building market share, the Company reiterates the 2014 net income guidance of between $80 and $85 million

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Tuesday, March 11 2014, at 8:00 AM ET.

The dial-in numbers are:

Live Participant Dial In (Toll Free): 877-407-0310
Live Participant Dial In (International): 201-493-6786

The conference call will also be webcast live.  To listen to the call, please go to the Investor Relations section of Pingtan's website at www.ptmarine.com, or click on the following link: http://ptmarine.equisolvewebcast.com/q4-2013

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.
Adam Prior, Senior Vice President
(212) 836-9606
aprior@equityny.com

In China
Katherine Yao, Associate
86 10 6587 6435
kyao@equityny.com

 

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(IN U.S. DOLLARS)

 





For the Three Months Ended December 31,





2013


2012








 Revenue



61,026,829


28,421,711








 Cost of revenue


(36,785,545)


(13,303,742)








 Gross profit


24,241,284


15,117,969








 Selling and marketing expenses


(887,544)


(39,367)








 General and administrative expenses


(846,068)


(2,261,304)








 Operating income


22,507,672


12,817,298








 Other income/(expense)





    Dividend income


230


(8)

    Interest income


3,389


388

    Interest expenses


(1,727,207)


(738,796)

    Subsidy income


7,133,781


(1,420,003)

    Sundry income


123


-

    Gain/(loss) on foreign exchange, net


170,712


47,657

 Total other income/(expense)


5,581,028


(2,110,762)








 Income before income taxes


28,088,700


10,706,536








 Income tax expense


-


-








 Net income from continuing operations


28,088,700


10,706,536








 Net income from discontinued operations, net of taxes


12,448,885


23,721,379








 Net income 


40,537,585


34,427,915








 Basic and diluted earnings per share






  - From continuing operations 


0.36


0.14


  - From discontinued operations 


0.15


0.30


  - Net income


0.51


0.44








 Weighted average number of ordinary shares outstanding





 - Basic and diluted


79,055,053


79,055,053








 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(IN U.S. DOLLARS)

 






 Year Ended December 31, 






2013


2012


 2011(A) 











Revenue




$     122,667,769


$      67,461,468


$     25,600,636











Cost of revenue



(75,760,033)


(41,876,140)


(14,600,579)











Gross profit



46,907,736


25,585,328


11,000,057











Selling and marketing expenses



(1,618,278)


(647,850)


(383,472)











General and administrative expenses



(3,191,637)


(2,839,848)


(251,343)











Operating income



42,097,821


22,097,630


10,365,242











Other income/(expense)








   Investment income



69,519


15,138


-

   Interest income



8,250


3,276


2,349

   Interest expenses



(4,171,989)


(3,176,920)


(844,650)

   Subsidy income



7,338,273


2,363,575


830,446

   Sundry income



2,144


-


-

   Gain/(Loss) on foreign exchange, net



144,740


(5,113)


86,950

Total other income/(expense)



3,390,937


(800,044)


75,095











Income from continuing operations before income taxes

45,488,758


21,297,586


10,440,337











Income tax expense



-


-


-











Net income from continuing operations



45,488,758


21,297,586


10,440,337











Net income from discontinued operations, net of






income tax expense

51,910,662


84,494,428


90,257,249











Consolidated net income



$     97,399,420


$     105,792,014


$    100,697,586





















Basic and diluted earnings per share









  - From continuing operations 



$                 0.58


$                  0.27


$                 0.13


  - From discontinued operations 



0.65


1.07


1.14


  - Net income



$                 1.23


$                  1.34


$                 1.27











 Weighted average number of ordinary shares outstanding






 - Basic and diluted



79,055,053


79,055,053


79,055,053












(A)

Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2011 rather than on February 25, 2013.

 

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








December 31,








2013


2012










(A)


Assets









Current assets








Cash




$       8,156,599


$     10,426,140



Notes receivable (banker's acceptances)







    transferred from related parties


-


3,645,817



Accounts receivable


9,133,130


11,478,436



Inventories


9,095,736


194,331



Prepaid expenses


2,380,874


410,966



Other receivables


11,665


29,885



Advances to related parties


-


49,802,821



Assets of discontinued operations


-


361,460,444


Total current assets



28,778,004


437,448,840












Other assets








Other receivables


1,213,440


-



Long-term investment


3,468,953


3,328,789



Deposit on potential Joint Venture


-


6,090,302



Prepaid fixed asset deposits


1,928,700


-



Prepaid – operating license rights


215,381,356


-



Property, plant and equipment, net


107,178,269


37,141,906


Total other assets



329,170,718


46,560,997












Total assets



$   357,948,722


$    484,009,837












Liabilities and equity






Current liabilities








Accounts payable - third parties


$      2,184,964


$            70,732



Accounts payable - related parties


13,807,605


5,765,632



Receipt in advance - third parties


297,034


-



Receipt in advance - related parties


-


12,681,102



Short-term loans



9,085,353


25,169,260



Long-term loans - current portion


20,252,077


8,094,308



Accrued liabilities and other payables


3,851,047


1,033,784



Advances from related parties


-


153,961



Deferred income



1,733,485


-



Liabilities of discontinued operations


-


14,052,751


Total current liabilities


51,211,565


67,021,530












Other liabilities








Long-term loans, net of current portion


54,499,727


16,689,321


Total other liabilities


54,499,727


16,689,321


Total liabilities



$   105,711,292


$     83,710,851












 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(IN U.S. DOLLARS)







December 31, 







2013


2012









(A)

Shareholders' equity






Ordinary shares, 225,000,000 shares authorized





with $0.001 per share; 79,055,053 shares issued and outstanding





as of December 31, 2013 and 2012


79,055


79,055


Additional paid-in capital


-


141,381,098


Statutory reserves


22,410,773


19,386,642


Retained earnings


199,341,512


217,224,220


Accumulated other comprehensive income


30,406,090


22,227,971

Total shareholders' equity


252,237,430


400,298,986










Total liabilities and shareholders' equity


$       357,948,722


$      484,009,837













(A)

Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Limited) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2011 rather than on February 25, 2013. Assets and liabilities of discontinued operations are retrospectively reclassified as of December 31, 2012 after taking into account of the Company's plan to sell China Dredging Group Co., Ltd. and its subsidiaries to an affiliate of the Company's Chairman, CEO and major shareholder, Mr. Xinrong Zhuo.

 

 

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)




Year Ended December 31,





2013



2012



2011 (A)












Cash flows from operating activities










Net income(3)


$

97,399,420


$

105,792,014


$

100,697,586

Discontinued operations, net of tax (3)



(51,910,662)



(84,494,428)



(90,257,249)

Income from continuing operations



45,488,758



21,297,586



10,440,337












Adjustments to reconcile net income to net











cash provided by operating activities











Depreciation of property, plant and equipment



3,297,751



2,983,086



1,917,747


Available-for-sales financial instrument fair value adjustment



-



-



705


Short term investment income



-



(15,860)



-


Amortization of operating license rights



720,339



-



-












Changes in operating assets and liabilities











Accounts receivable - third parties



2,788,320



(10,562,176)



1,627,853


Accounts receivable - related parties



-



4,584,509



(3,426,607)


Other receivables



19,201



6,797,156



(323,246)


Prepaid expenses



(1,925,477)



(218,759)



(157,077)


Inventories



(8,766,511)



2,397,340



(1,848,587)


Accounts payable - third parties



2,081,172



(43,377)



(73,055)


Accounts payable - related parties



13,944,394



3,060,668



(1,423,494)


Receipt in advance - third parties



292,802



(1,160,618)



771,142


Receipt in advance - related parties



(13,026,770)



12,675,074



-


Accrued liabilities and other payables



2,737,334



763,533



204,254

Net cash provided by operating activities from











continuing operations



47,651,313



42,558,162



7,709,972












Cash flows from investing activities











Payment for long term investment



-



(2,661,766)



(649,752)


Proceeds from disposition of / (payment for)



-



808,052



(774,220)


  short-term investment











Proceeds from deferred income



8,320,882



-



-


Payment for fixed asset deposits



(1,901,220)



-



-


Purchase of property, plant and equipment



(256,831,561)



(33,692,090)



(7,086,080)


Advance to related parties



(312,569)



(41,505,027)



(21,574,926)


Disposal of subsidiaries, net of cash



(84,917,899)



-



-

Net cash used in investing activities from











continuing operations



(335,642,367)



(77,050,831)



(30,084,978)












Cash flows from financing activities











Proceeds from short-term loans



43,713,708



51,384,055



21,337,156


Repayment of short-term loans



(60,613,140)



(48,079,121)



(10,055,693)


Proceeds from long-term loans



55,811,568



26,617,656



-


Repayment of long-term loans



(7,584,023)



(1,845,808)



-


Proceeds from capital injection



-



5,955,756



-


Advance from related parties, net of reception in











  form of note receivable



(777)



9,075,004



12,361,389

Net cash provided by financing activities from











continuing operations


$

31,327,336


$

43,107,542


$

23,642,852












Cash flow from discontinued operations










Net cash provided by operating activities from











discontinued operations


$

79,605,841


$

92,587,488


$

67,151,092

Net cash provided by/(used in)investing activities from











discontinued operations



7,099,979



(42,204,987)



(47,811,882)

Net cash (used in)/provided by financing activities from











discontinued operations



(407,030)



560,216



12,408

Net cash provided by discontinued operations



86,298,790



50,942,717



19,351,618












Effect of exchange rate



3,032,812



1,726,785



4,565,872












Net (decrease)/increase in cash



(167,332,116)



61,284,375



25,185,336












Cash at the beginning of year (1)



175,488,715



114,204,340



89,019,004












Cash at the end of year (2)


$

8,156,599


$

175,488,715


$

114,204,340












Supplemental disclosure of cash flow information:





















Cash paid:











From discontinued operations











Income tax paid


$

17,278,643


$

29,324,336


$

26,956,670













From continuing operations











Interest paid


$

4,060,069


$

3,428,193


$

952,200












Supplemental disclosure of non-cash transaction eliminated in above:






















Banker's acceptance notes received from related parties


$

3,745,196


$

-


$

-













Purchase of prepaid lease payment - operating rights


$

216,101,695


$

-


$

-













Purchase of property, plant and equipment











  by setting off advances to related parties


$

55,064,953


$

-


$

-













Deposit on setting up Joint Venture netted of











  accounts payable - related party


$

6,090,302


$

-


$

-












(1)

Includes cash and cash equivalents of discontinued operations of $165,062,575, $112,409,544 and $88,532,472 at the beginning of the year in 2013, 2012 and 2011, respectively.

(2)

Includes cash and cash equivalents of discontinued operations of $nil, $165,062,575 and $112,409,544 as of December 31, 2013, 2012 and 2011, respectively.

(3)

Total net income and net income from discontinued operations, net of tax included accretion of discount on Class A Preferred Shares in amount of $6,135,012.

(A)

Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Limited) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2011 rather than on February 25, 2013.

SOURCE Pingtan Marine Enterprise Ltd.




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