Pingtan Marine Enterprise Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2019

FUZHOU, China, March 17, 2020 /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, 2019.

Fourth Quarter 2019 Financial Highlights (all results are compared to prior year period)

• Revenue was $34.6 million, compared to $25.1 million.
• Gross profit was $8.3 million, compared to $9.1 million, and gross margin was 24.0%, compared to 36.2%.
• Net loss attributable to owners of the Company was $1.0 million, or $(0.01) per basic and diluted share, compared to net loss attributable to owners of the Company of $3.0 million, or $(0.04) per basic and diluted share.

2019 Financial Highlights (all results are compared to prior year)

• Revenue increased by 39.5% to $89.6 million from $64.3 million.
• Gross profit was $25.2 million, compared to $31.0 million, and gross margin was 28.1%, compared to 48.3%.
• Net income attributable to owners of the Company was $5.7 million, or $0.07 per basic and diluted share, compared to net income attributable to owners of the Company of $13.4 million, or $0.17 per basic and diluted share. 

Management Comments

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We are pleased with our operational performance in 2019 and are looking forward to building on that performance in 2020. Following the completion of the modification and rebuilding of 27 large-scale fishing vessels in 2018, in 2019, we completed the modification and rebuilding of another 32 large-scale fishery vessels, including 2 refrigerated transport vessels and 30 fishing vessels. As part of our efforts to expand our fishing fleet and catching capacity, at the end of 2019, we submitted an application to the Chinese government authorities to obtain permits to modify and rebuild 10 vessels. The rebuilt fishing vessels have increased our catch volume and sales volume, and our catch mix shows diversity.

The first quarter of 2020 is a difficult time for many companies, including Pingtan, that conduct their businesses in China due to the coronavirus outbreak. The Company has taken active precautionary measures and gradually resumed work in mid-February to reduce the impact of the pandemic on our production and operations. Although the pandemic has not yet disappeared completely, we remain optimistic about the production and operation activities for the upcoming quarters. Pingtan has been devoted to being a leading supplier of natural seafood and high-quality protein in the Chinese market."

Factors Affecting Pingtan's Results of Operation

Coronavirus Pandemic

In December 2019, a novel strain of coronavirus that causes respiratory illness, or COVID-19, surfaced in Wuhan, China, and began spreading at a high rate in January and February of 2020 and confirmed cases were reported in other parts of the world. In reaction to this outbreak, an increasing number of countries have imposed travel suspensions to and from China following the World Health Organization's "public health emergency of international concern" (PHEIC) announcement on January 30, 2020. Since this outbreak, domestic business activities in China have been disrupted by a series of emergency quarantine measures taken by the government. As a result, the Company's business operations have slowed down and such slow down is expected to continue for at least the first quarter of 2020. The magnitude of this negative effect on the continuity of the Company's business operations in China remains uncertain. These uncertainties impede our ability to conduct our daily operations and could materially and adversely affect our business, financial condition and results of operations.

Indonesia's Moratorium on Fishing License Renewals

In early December 2014, the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country's Ministry of Maritime Affairs and Fisheries ("MMAF") could combat illegal fishing and rectify ocean fishing order. In February 2015, the Company ceased all fishing operations in Indonesia. In November 2015, the Indonesian government announced that the moratorium had concluded, but the MMAF has neither implemented new fishing policies nor resumed the license renewal process. The Company has been paying close attention to any new trends in the MMAF's fishing policy and has been actively exploring new locations to deploy our vessels.

As of December 31, 2019, among the Company's 141 vessels, 12 were located in the Bay of Bengal in India, 69 were located in international waters, 13 were located in the PRC, 37 were located in the Arafura Sea in Indonesia, and the remaining 10 vessels were in the modification and rebuilding projects.

Pingtan's Revenue Break-down By PRC Provincial Division

2019 Selected Financial Highlights

Balance Sheet Highlights

Consolidated Financial and Operating Review

Revenue

Revenue for the three months ended December 31, 2019 was $34.6 million compared to $25.1 million for the same period of 2018.

For the year ended December 31, 2019, the Company's revenue was $89.6 million, increasing by 39.5% from $64.3 million for the year ended December 31, 2018. The increase was mainly due to the total of 81 vessels that the Company put into operation in 2019, which led to increased sales volume and revenue.

Gross Margin

The Company's gross margin was 24.0% for the three months ended December 31, 2019, compared to 36.2% in the prior year period.

The Company's gross margin was 28.1% for the year ended December 31, 2019, compared to 48.3% in the same period of 2018.  The decrease was primarily attributable to lower average unit sale price of our catches. Our fishing locations were mostly in international waters in 2019 and the catch mix varied from 2018. The catch species with the highest sales volume was sold at lower price, which led to a drop of average unit sale price by 27.9% for the year ended 2019.

Selling Expenses

For the three months ended December 31, 2019, selling expense was $0.82 million, compared to $0.44 million in the prior year period.

For the year ended December 31, 2019, total selling expenses was $2.72 million, compared to $1.62 million in the same period of 2018, an increase of 67.4%. The increase was primarily due to the increase in insurance as a result of more vessels being insured in 2019. 

General & Administrative Expenses

For the three months ended December 31, 2019, general and administrative expense was $1.1 million, compared to $0.7 million in the prior year period.

For the year ended December 31, 2019, total general and administrative expense was $15.8 million, compared to $20.0 million in the same period of 2018, a decrease of 20.8%. The decrease was primarily due to the 18.2% decrease in impairment loss on dismantled and deregistered vessels and the 35.7% decrease in depreciation on non-operating vessels.

Net Income (Loss)

Net loss for the three months ended December 31, 2019 was $1.1 million, compared to net loss of $3.2 million in the same period of 2018. The decrease in net loss was mainly due to a decrease of $4.3 million non-cash impairment loss from vessels in the fourth quarter of 2019, compared to the fourth quarter of 2018.

For the year ended December 31, 2019, net income was $6.4 million, compared to $14.8 million in the prior year period, a decrease of 56.9%. The Company recorded an impairment loss of $8.0 million and depreciation of $3.7 million on non-operating vessels, and the two non-cash items subtotaled $11.7 million of operating expenses.

Net Income (Loss) Attributable to Owners of the Company

Net loss attributable to owners of the Company for the three months ended December 31, 2019 was $1.0 million, or $(0.01) per basic and diluted share, compared to net loss attributable to owners of the Company of $3.0 million, or $(0.04) per basic and diluted share, in the same period of 2018.

Net income attributable to owners of the Company for the year ended December 31, 2019 was $5.7 million, or $0.07 per basic and diluted share, compared to net income attributable to owners of the Company of $13.4 million, or $ 0.17 per basic and diluted share, in the same period of 2018.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Tuesday, March 17, 2020 – 8:30 a.m. ET (March 17, 2020 at 8:30 p.m. Beijing Time).

The dial-in numbers are:

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

To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page or go to: https://78449.themediaframe.com/dataconf/productusers/pme/mediaframe/36296/indexl.html. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan

Pingtan is a global fishing company that engages in ocean fishing through its subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing.

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, as amended. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions, or the negative of those expressions, may identify forward-looking statements. Although forward-looking statements reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; locating or re-locating vessels, in foreign waters and related license requirements; our ability to successfully manage relationships with customers, distributors and other important relationships; actions taken by government regulators, such as the Indonesian moratorium; technological changes; competition; demand for our products and services; the deterioration of general economic conditions, whether internationally, nationally or in the local markets in which we operate; the impact of the current coronavirus (COVID-19) pandemic; legislative or regulatory changes that may adversely affect our business; operational, mechanical, climatic or other unanticipated issues that adversely affect the production capacity of the Company's fishing vessels and their ability to generate expected annual revenue and net income; and other 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. 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:

LiMing Yung (Michael)
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
michaelyung@ptmarine.net

Maggie Li
Investor Relations Manager
Pingtan Marine Enterprise Ltd.
Tel: +86 591 8727 1753
mli@ptmarine.net

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