PME - Earnings call transcript Q3 2019 | Pingtan Marine Enterprise Ltd.

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Operator

Greetings, and welcome to the Pingtan Marine Enterprises Third Quarter 2019 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Zhou. Thank you.

You may begin.

Unidentified Company Representative

Okay. good and Jesse, you, morning, everyone. Thank for you joining us. Thank press the financial XXXX [Foreign at are Language] quarter announcing the of www.ptmarine.com. website Marine’s months Copies third release and on Pingtan available results nine welcome also we and happy are You be Language] to us to would a by you send contact to PTmarine@pure-rock.com, e-mail copy. [Foreign

broadcast will this at addition, made available Pingtan Marine’s In be website.

within would any [Foreign Language] certain the call everyone and accompanying that harbor the discussed remind of provision forward-looking Before XXXX. we Reform Private meaning statements Language] like get safe the Securities this to started, Act contains information I [Foreign herein of conference of Litigation

risks Investors are Pingtan Marine’s fully with that and uncertainties Marine’s detailed the cautioned and filings business Commission. Exchange Securities such Such that the prospects involve results [Foreign are risks affect the Language] Pingtan statements in may and and forward-looking operations. of

like I be Chinese. today’s to In order to moment format participants, the call a of call for now English to and call. in conference both this care take take outline all conducted will

floor of CEO, the Zhuo, prepared When then and questions. with [Foreign he a the will read Mandarin, English. we to Mr. statement call presentation. Roy Yu, open in will CFO, the for Mr. Marine’s who all, conference will in read will I opening company’s which turn Xinrong I Pingtan the will First then Chairman continue is Language] finished,

translate moment everyone question-and-answer Language] English questions, the Chinese. on both For in to then the call, and we please a us respond the allow and will to session, [Foreign

Language] Please and over welcome Marine’s Zhuo. CEO, Xinrong turn I call the Chairman that, Pingtan With Mr. Zhuo. [Foreign Mr. to

Xinrong Zhuo

to deploying call. Thank XXXX and months the of quarter third sales volume and into operation for Pingtan started the compared growth XXXX, rebuilt a XXXX. Language] joining earnings and Since all new of vessels XXXX third [Foreign for same you the quarter and increase volume several we Language] of company groups, gentlemen, sales experienced an beginning as morning. the saw of have nine Ladies good steady in [Foreign period Marine’s in

product Language] due and fluctuations to market However, subject [Foreign situation. prices are to

previous quarter, average a During volume were lowest to this and company’s by resulted price, the made from difficult and it this monsoon highest our as single in factor our species was and species quarter transport the the impacting one revenue another improvement our plays revenue year, with season that of which in back, the significant capacity We boosting Besides, fish period for revenue. decrease quarter, role the in revenue same fish production XXXX. catches compared it quarter the to decreased a compared growth. landings this to believe sales

the we [Foreign Language] previous has of XX modification vessels phases earnings company different disclosed in and in our rebuilding. As release,

completed, Indian the from vessels the are grounds; designated of of vessels of departure near all waters to today, which to the international to them set fulfillment and most preparation. of have port are fishing expected after these sail the six the departed ocean of As sea of XX future have in reached remaining

capacity catching improving expanding available by in exploring other to actively and for waters. committed been areas has of company international The species Language] [Foreign catches fishing

international made well business may as through models our and also exploring trade We strategy. entering enhance other partnerships. in to include efforts This strategic the business markets

progress, apprised effective Language] will recommendations. of and and of welcome all keep investors [Foreign always, suggestions Pingtan As and constructive aspects we Marine development

of with an the during XX, focus comes strategy the based season compared quarter, earlier previous so the the As fourth [Foreign adjust distribution our we business, on we expanding observe sales continues the festival and business the that Language] retail may for seafood while the XXXX, to Green date on in years. preparation festival, online year peak next coming spring offline traditional changes quickly the to enter management market January

behalf [Foreign person that, take nine investors our months would company, look XXXX report results. turn always, welcome you. over our third On to the and, tour call our as and in Language] to facilities. financial headquarters our quarter to Fuzhou a of CFO and in meeting like With our of I to to I forward Thank

Unidentified Company Representative

I over to of to turn now Marine Financial Pingtan Mr. Chief the Enterprise. Roy like call Yu, Officer Language] [Foreign

Roy Yu

Jay. you, Thank and everyone. morning, welcome, Good

will results the XXXX our refer the press XX-Q financial Regarding Friday. and we and Today, of to Marine’s factors Pingtan’s third filed months operation XXXX quarter release results. quarter and earnings I affecting please discuss third Pingtan last nine operations,

September by XX, The [Foreign changes period Language] decrease in to ended XX, $XX.X volumes XX% million decreased XXXX, kilograms kilograms from million mainly the the $XX.X ended XXXX. to Pingtan XXXX, for reports its million, in three three the attributable months September X.X Sales was from at different increased ended same XXXX. September XX.X% revenue for months by sales million in months XX, three X.X mix. in

This Meanwhile, a to this was formed season our it which due XX.X% months and for for for landings factor the increase back, quarter XX, September XXXX, more ended operation. in this the our barrier The the sales revenue. as compared monsoon quarter, in XX, catches to fishing XXXX. was decrease. impacting company transport vessels months unit a September the three presented is quarter-on-quarter ended to Average another price three decreased

down company’s For sale of fish kilograms nine months as compares a ended to species months XX, which Language] for selling was XX.X% from XX, volumes sold being the nine September XXXX. nine Average XXXX with million [Foreign September unit nine the in XXXX, XX, the from lower XXXX. ended the months company’s average highest increased XX.X price the ended September kilograms $XX.X months of the million volume to at mainly XXX.X% nine decreased months attributable the decrease catches. unit XXXX. XX, ended million sale The to September The the revenue $XX.X pulled sales price, million increased to the sales in $XX.X price

was year $X.X $X.X gross compared XX, was or period, XX.X%. a $XX.X of million for months gross of XXXX [Foreign Language] representing $X nine XXXX, gross the profit $X.X while of of to million, profit change to of unit prior For the representing Language] million profit [Foreign price Language] Gross as ended due profit [Foreign the was a the in third quarter same remained $XX.X of million September change the decrease average million in consistent in decrease XXXX. unit cost of or compared level. sale The production period our a XX.X% the to at fish million

months XX, nine for ended Language] margin months language] XXXX. and seas was XX.X% respectively, gross as primarily decrease compared XX.X% XXXX, gross a and months For catch months nine XX, months the September ended result the XX, The margin to price The and months year. nine for months XXXX vessels XX, of to gross was in was and of the as three period compared XXXX the different [Foreign average nine being harvesting [Foreign compared XXXX mix. for prior ended to September September ended a three ended September different new deployed same in XXX%, sale a fishing XX.X% XX.X% by three the drop attributable in September to XX, XX% the high margin unit of water

the of quarter $X.XX vessels in number prior million to result from the in in China. third the as a was insurance, of in insured to expenses and selling million the of due to $X.XX compared fees For of primarily increase an number XXXX, being and shipping increase increase was handling year warehouse and Language] period. deliveries The advertising [Foreign ports

a of in in due administrative increase service the ended related described $X.X XX, above. a period large was the and in loss. charge and other attributable partially For depreciation by XX%. in service a For decrease the of compared period, charge XX, the and $X.X to administrative [Foreign three $X.X Language] Language] in a XXXX reasons and ended decrease expense and fees million expenses general prior non-operating of in the depreciation selling The was and a million same in months administrative $X.X general XXXX, of September rent to nine and [Foreign decrease to increase a XXXX. million vessels, compensation was professional offset mainly decrease million a same year compared benefits, other was to months percentage, September by related expensive administrative $X.X million general The or decrease and the impairment

the September million diluted $XX.X the million $X.X of For the third XXXX income administrative Language] the and of prior income or million $X share per or increase general owners million expenses attributable compared to of was diluted year and the [Foreign and in share net $X.XX Pingtan XXXX, basic months net Language] compared to attributable XXXX, $X.X and per XX, $X.X of of of basic in company company to $X.XX period. quarter for period X.X%. to of [Foreign for nine same ended million a owners reported the

$X.XX [Foreign Moving $X.X to owners to diluted or of for and of the Language] for XXXX $X.XX months owners ended Net $XX.X attributable income company attributable the income per basic XXXX. balance [Foreign company of basic months compared Language] share the nine million share to was the of and of nine diluted sheet. per to net million

$XXX.X Pingtan’s cash total As December million, equity equivalents cash million, million XXXX million, long-term million, were September on were million, XX, million, assets total and and Language] $XXX.X was $XXX.X $XXX [Foreign to $XX.X total of XX, XXXX, shareholders' $XXX.X was debt $XX.X compared $X respectively, million,

and to production increase capacity enrich To focusing methods conclude, mix. fleet continue enhance and and we expansion product on territorial of further fishing

entire and planning processing expansion will inland to for end business business offline. new exploring online deep we e-commerce distribution seafood market Meanwhile, of actively the enhance retail channels the and customers, seafood reach and We [Foreign and explore both are to develop penetrate directly to provinces. China’s to Language] chain industry further

Unidentified Company Representative

let’s Jesse, the start that, Q&A. With

call, to everyone and and allow in English session, question-and-answer Language] respond the please on the questions, For [Foreign moment then the we will translate both Chinese. a to us

Operator

Thank [Operator you. Instructions]

Citi first Aidee your comes with Check proceed from Capital. Our Please question. question with

Unidentified Analyst

Language] [Foreign

Roy Yu

Yes. ahead. Yes, can you. please go Well, we hear

Unidentified Analyst

Language] [Foreign

Unidentified Company Representative

question Zhuo. I want to this address to Mr.

Unidentified Analyst

[Foreign Language]

Unidentified Company Representative

may addressed were to Sir, questions These translate? Mr. Zhou. I

very the production distribution? the is thank capacity. answer your is, PME my Zhuo, for question question first start lifting production PME will improvement much, in when was Mr. at you capacity the And on is, now dividend The PME. focused efforts The of

we to job plan. like first, and then would the start will thinking we distribution see So about this

Second construction. about seafood factory the under processing question, talked you that is

So for I Answer equity what will ask completed structure be this factory factory owned this this by factory? of also, first wholly this equity designed would half the completed? will structure the was to was, PME. And like was XXXX. And be in when

PME more or The in PME fishing But more third of volume remaining different was, is same. the operation has vessels in production the question at less now waters.

is margin? the production a not is increased fishing why large by So

different at the different deployed been the have waters. in and That’s see it fish, were to transport of was, previous not was quarter prices. different catches difficult because with the an waters different quarters. And different third back and monsoon obvious increase species they vessels very the sold was Answer did a why in revenues season, the compared since caught

year, question in fourth in was, quarter subsidies this a X as USD And is third of seen we PME subsidy received only million the critical and have there the future? the of

be the Answer Actually, to fourth and the X-year was the of the future. being four the – was third the to provincial are more Planning subsidy will actually, incremented National receive by even to in will quarter and in made adjustment exact, will industry. received previous quarter provincial quarter adjustments third the the government, the during bigger according we of will to government first in subsidies, the fishing but make and the be XXXX, even government subsidies Strategic the plan structure bigger. some the XXth quarter and than bigger quarter And be

we waiting for the of release a the So by government. plan are concrete

efforts to we the expanding be of vessels question moment, Ocean. our the Yes, in grounds. exploring the more – and have globe? six a few far are can the At new are waters now vessels operation fishing there this fifth as was, that around in different The vessels grounds in any there not are February moment. the not year, operation being operational? international And in vessels I at that strengthening fishing in know, As in deployed will Indian are is there we December that are

exploring volume bigger The grounds be be of fleet fishing new the should bigger fishing vessels. according is its was, catches fact will that of in the expanding even to next question and efforts PME strengthening and its

the volume? any future forecast So or for concrete have do you production projection

work, the we Yes, in everything fishing see operation, will of vessels lot volume in a grounds. we they and can production changing, in future. There the more the make this a fourth year quarter species production moment. are a the volume at operating an is have there’s But think, will will bigger diverse uncertainties different since catches. because of But be will more there as of projections at be and in one increase of no concrete

and timely the keep will we we So That’s investors a results in all. will manner. updated release

Operator

this Instructions]. we [Operator It additional have no you. appears time. Thank questions at

So comments. I’d for any back the additional to over to pass like management floor concluding

Roy Yu

We you, financial again Jesse. us to year-end results. of today. again, we to XXXX in March quarter fourth look Thanks, results you Thank our forward for joining speaking all with and after you report

our As always, we visitors in Language] China. any you. Fuzhou, office to welcome Thank [Foreign

Operator

this gentlemen, and today’s we participation, lines Ladies and your does Again, may at disconnect you for teleconference. you thank conclude this your time.

Pingtan Marine Enterprise (PME) 12 Nov 192019 Q3 Earnings call transcript