China Fishery (CFG) released its FY 2007 results on February 14, 2008 and they were largely in line with expectations, except that at a glance, it can be seen that costs have increased significantly as compared to revenues. This resulted in an 84.5% increase in net profit on the back of a 160% increases in revenues. I will be analyzing the financials using my usual method of moving through the Income Statement, Balance Sheet and Cash Flow Statement in order to gain a holistic overview of how the company has fared in terms of capital allocation and profit generation. Finally, I shall touch on strategies which the company may be employing to grow their business further in FY 2008 and also CFG's long-term prospects.
Income Statement Analysis
As a result of the increase in the scope of their activities, CFG's revenues have increased by 160% from US$156 million in FY 2006 to US$406.4 million in FY 2007. Recall that the company had secured their 3rd and 4th VOA (Vessel Operating Agreement) in early 2007, which helped to increase their fishing catch volume by increasing their trawling fleet size from 14 to 23. Their expansion in Peru and penetration into Peruvian fishing grounds through the acquisition of 16 purse seine fishing vessels and 3 fishmeal plants also helped them to build their numbers strongly. Throughout FY 2007, they concentrated on building their fishmeal processing capability by acquiring (among other assets) a canning plant, fishing vessels and a dock; and their most recent acquisition was on October 10, 2007 when they purchased their 7th fishmeal processing plant. Readers can look into more detail by reading through their press releases on SGXNet, but the crux of what I am trying to say is that CFG has expanded very aggressively in FY 2007 which justifies such numbers. One testament to their rapid expansion is also the massive increase in costs, especially for cost of sales and vessel operating costs which increased 732.8% and 152.4% respectively.
Read more...By: musicwhiz
China Fishery (CFG) released its FY 2007 results on February 14, 2008 and they were largely in line with expectations, except that at a glance, it can be seen that costs have increased significantly as compared to revenues. This resulted in an 84.5% increase in net profit on the back of a 160% increases in revenues. I will be analyzing the financials using my usual method of moving through the Income Statement, Balance Sheet and Cash Flow Statement in order to gain a holistic overview of how the company has fared in terms of capital allocation and profit generation. Finally, I shall touch on strategies which the company may be employing to grow their business further in FY 2008 and also CFG's long-term prospects.
Income Statement Analysis
As a result of the increase in the scope of their activities, CFG's revenues have increased by 160% from US$156 million in FY 2006 to US$406.4 million in FY 2007. Recall that the company had secured their 3rd and 4th VOA (Vessel Operating Agreement) in early 2007, which helped to increase their fishing catch volume by increasing their trawling fleet size from 14 to 23. Their expansion in Peru and penetration into Peruvian fishing grounds through the acquisition of 16 purse seine fishing vessels and 3 fishmeal plants also helped them to build their numbers strongly. Throughout FY 2007, they concentrated on building their fishmeal processing capability by acquiring (among other assets) a canning plant, fishing vessels and a dock; and their most recent acquisition was on October 10, 2007 when they purchased their 7th fishmeal processing plant. Readers can look into more detail by reading through their press releases on SGXNet, but the crux of what I am trying to say is that CFG has expanded very aggressively in FY 2007 which justifies such numbers. One testament to their rapid expansion is also the massive increase in costs, especially for cost of sales and vessel operating costs which increased 732.8% and 152.4% respectively.
Read more...
China Fishery (CFG) released its FY 2007 results on February 14, 2008 and they were largely in line with expectations, except that at a glance, it can be seen that costs have increased significantly as compared to revenues. This resulted in an 84.5% increase in net profit on the back of a 160% increases in revenues. I will be analyzing the financials using my usual method of moving through the Income Statement, Balance Sheet and Cash Flow Statement in order to gain a holistic overview of how the company has fared in terms of capital allocation and profit generation. Finally, I shall touch on strategies which the company may be employing to grow their business further in FY 2008 and also CFG's long-term prospects.
Income Statement Analysis
As a result of the increase in the scope of their activities, CFG's revenues have increased by 160% from US$156 million in FY 2006 to US$406.4 million in FY 2007. Recall that the company had secured their 3rd and 4th VOA (Vessel Operating Agreement) in early 2007, which helped to increase their fishing catch volume by increasing their trawling fleet size from 14 to 23. Their expansion in Peru and penetration into Peruvian fishing grounds through the acquisition of 16 purse seine fishing vessels and 3 fishmeal plants also helped them to build their numbers strongly. Throughout FY 2007, they concentrated on building their fishmeal processing capability by acquiring (among other assets) a canning plant, fishing vessels and a dock; and their most recent acquisition was on October 10, 2007 when they purchased their 7th fishmeal processing plant. Readers can look into more detail by reading through their press releases on SGXNet, but the crux of what I am trying to say is that CFG has expanded very aggressively in FY 2007 which justifies such numbers. One testament to their rapid expansion is also the massive increase in costs, especially for cost of sales and vessel operating costs which increased 732.8% and 152.4% respectively.
Read more...
