May 3, 2012

 

 

International Fish Farming Co's (ASMAK) Q1 2012 financial statements revealed a 63.7% decline in net earnings to about AED3.67 million (US$99.9 million) versus AED10.11 million (US$2.8 million) a year ago.

 

EPS fell to roughly AED0.04 (US$0.01) from AED0.16 (US$0.04) in the first quarter of 2011, according to reports.

 

The company saw a loss of AED128,000 (US$34,841) as it continued to suffer from halted farming operations in Oman and the United Arab Emirates (UAE). Asmak had initially focused on farms in the Emirates, but ended operations there and in Oman in 2009 because of huge algal blooms that were prominent in the area and killing fish.

 

Asmak now imports fish from countries around the world to supply local supermarkets.

 

The firm has also diversified into other sectors, mainly property and construction, and retains a fish farm in Ajman.

 

After announcing the poor Q1 results, Asmak tried to reassure shareholders.

 

"The management confirms its commitment to support and enhance the core activities of the company to attain continuous growth," Asmak wrote on its website.

 

Analysts, however, responded with skepticism.

 

"The core business, which is farming fish, hasn't worked," said Mohammed Ali Yasin, an independent analyst in Abu Dhabi. "They haven't made any money on fish, but rather the other businesses they are involved in."

 

Asmak's stock has surged 418% on the Abu Dhabi Securities Exchange (ADX) since January.

 

After the sudden rise, the ADX made an inquiry into the share activity on April 17. Asmak responded that it was "fully committed to the laws and regulations of the Securities and Commodities Authority … and has no information or explanation behind the sudden interest in the stock."

 

The company used its Annual General Meeting to announce that it will boost its frozen seafood product offering to increase revenue and that it would carry out the pilot production of Asian sea bass in 2012.