May 12, 2010

HQSM reports 33% sales increase for Q1 of 2010

HQ Sustainable Maritime Industries, Inc., increased its first quarter sales that ended March 31, 2010 to US$14.4 million, compared to US$10.8 million from previous year.

The increase in sales was primarily the result of strength across each segment including aquaculture products, health and bio-products, as well as the new feed products added in late 2009.

Aquaculture product segment sales increased 6% to US$7.7 million, compared to US$7.3 million in the first quarter of 2009. The aquaculture product segment sales increase is primarily related to an increase in volume and the price of processed ocean-caught fish. Aquaculture product segment sales were partially offset by fluctuations in the market price of tilapia fillets, resulting in a 16.2% decrease in the average selling price of tilapia in the first quarter of 2010.

The company's new feed mill generated sales of US$3.1 million, compared to US$1.3 million in the fourth quarter of 2009, which was the first time the feed product segment began to generate revenue.

Gross profit for the first quarter of 2010 decreased 3% to US$4.4 million. It is expected that the gross profit margin from the feed product segment will improve in the coming periods as the increased volumes processed will support the fixed costs more favourably.