March 24, 2009

Seafood processor China Marine Food Group Ltd on Monday (Mar 23) announced the company's financial results for the fourth quarter and full year 2008.

The company's net revenues for the fourth quarter ended December 31, 2008 reached US$13.5 million, an on-year increase of 28.8 percent. The company's seafood-based snack food product lines now account for about 91 percent of the company's revenues. Processed and packaged seafood snack foods remain the focal point of China Marine's operations, marketing and distribution strategy.

The net income for the fourth quarter was US$2.5 million, representing an on-year increase of 4.2 percent. The slight increase in net profits was attributed to strong operating results but offset by increased operating expenses associated with being a public company.

The company's fiscal 2008 revenue increased about 34 percent to US$48.8 million as compared to US$36.4 million for 2007. The gross profits for 2008 stood at US$15.2 million compared to US$10.8 million in 2007, an increase of 41 percent. The company's operating income for 2008 totalled US$12.5 million, an increase of 24.7 percent compared to US$10 million in 2007 while operating margins were 25.5 percent compared to 27.4 percent in 2007. The decrease in operating margins was mainly attributed to the costs of being a US-listed public company.

In July 2008, the company signed agreements with two new distributors based in Shanghai and Guangdong. The new distributors and their respective customer bases contributed US$3.5 million or 7.2 percent of the company's overall revenues in 2008. The company expects this venture to continue growing as new sales opportunities are developed in these highly-populated areas.

On March 3, 2009, the company announced a sales contract with a leading convenient store chain in Shanghai which will add over 1,000 new points of sale to the company's existing retail network of 1,400 locations. Convenient store chains are one of China Marine's target customers.

Meanwhile, the company's net income reached US$11.1 million for the year ended December 31, 2008, an on-year increase of 29 percent.

During 2008, China Marine Food Group added more than 3,000 tonnes of capacity to its production lines, which came online at the end of the fourth quarter. The additional capacity boosted total annual output by 50 percent to 10,000 tonnes. The company has also announced plans to double the annual capacity up to 20,000 tonnes by the third quarter of 2009.