China Ocean blames rotting fish at Chinese ports for revenue drop

A major Chinese distant-water fishing and seafood supply chain management firm is blaming COVID-related restrictions and checks at Chinese ports for losses it recorded in the last nine months of 2020.

China Ocean Group Development Limited told investors in a statement that increased “mortality” and “spoilage” of its fish at Chinese ports caused it significant losses. According to the statement, “the group expected to record a significant decrease in revenue for the nine months ended 31 December, 2020, of approximately 24 percent as compared to approximately HKD 625 million [USD 81.2 million, EUR 68.7 million] for the corresponding period in 2019.”

“The group is further expected to record a loss attributable to equity holders of approximately HKD 6 million [USD .78 million, EUR.66 million] for the nine months ended 31 December, 2020, as compared to a profit of approximately HKD 18 million [USD 2.34 million, EUR 1.98 million] recorded in the corresponding period in 2019.”

China Ocean, which is listed on the Stock Exchange of Hong Kong, said the loss in revenue and profit “was mainly attributable to the outbreak of the novel coronavirus (COVID-19) and the relevant anti-epidemic measures, including but not limited to, the increased hygiene and sanitary inspections, especially for aquatic and food products, at the ports of relevant state departments in mainland China.”

“As a result, it has prolonged the time required for customs clearance, and led to a surge in the mortality rate of fresh seafood products and the spoilage of chilled seafood products,” it said.

The company told investors it had “implemented cost-saving measures” in order to reduce losses.

In December 2020, China Ocean announced it had signed a memorandum of understanding with the Mercosur trade bloc in Latin America with a view to developing a fisheries base in Ecuador. But Mercosur told SeafoodSource it hadn’t signed any document with the company. China Ocean didn’t reply to requests for comment.

Photo courtesy of General Administration of Customs/People’s Republic of China