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01-03-2012, 06:21 PM
Very shocking news indeed!
Business Times - 01 Mar 2012
Poor nutrition may have caused Oceanus abalones' death: probe
Firm also reports a deeper loss of 502.6m yuan for Q4
By LYNETTE KHOO
AN internal probe at Oceanus Group suggests that the mystery death of millions of abalones at Oceanus Group could be due to poor nutrition.
Many of the existing abalones are also found to be laggards, in other words, abalones of poor quality and unprofitable to grow further.
The China-based abalone breeder shed light on the probe yesterday as it reported deeper losses for the fourth quarter ended Dec 31, 2011, due to fair value losses in biological assets.
Calling the discovery 'staggering', Oceanus executive chairman Ng Cher Yew told BT yesterday that the group has since removed the former chief executive, Yu De Hua, from the company, stripped him of his role as a legal representative, and seized all company seals from him.
'We destroyed the seals and registered new seals in China,' said Dr Ng, who has taken over the role of the CEO and legal representative.
Management revamp and operational restructuring has largely taken place, keeping Oceanus on track to turn its financials around latest by 2013, he added.
Oceanus yesterday said its net loss for the fourth quarter ended Dec 31 widened to 502.6 million yuan (S$99.7 million) from 29 million yuan in a year ago period as it marked a fair value loss of 371.2 million yuan in biological assets.
Revenue during the quarter also fell 35 per cent to 78.4 million yuan as Oceanus sold fewer live and processed abalones.
Oceanus had to mark down the value of its abalone stock as a significant proportion were found to be laggards after three daunting months of stock-taking of abalones in over 30,000 tanks at 50 farms spanning two provinces.
Out of the existing population of 134.2 million abalones as at Dec 31, 85.6 million are found to be laggards of between 2cm and 4.2cm and valued at 61 million yuan, instead of 127 million yuan if they were in better marketable conditions.
Two South African abalone experts engaged by Oceanus have ruled out disease as the cause of the abalone deaths and believe that poor nutrition, coupled with poor breeding practices, was the likely cause.
'Though the experts expressed that this problem normally does not produce mortalities of the level recorded on our farms, their calculation of the empty shell volumes in the farms sampled could theoretically support the numbers,' Dr Ng said.
Given that the high mortality of abalones was a 'man-made factor', Oceanus is unable to make insurance claims on the losses, he added.
For the full year ended Dec 31, Oceanus reported a net loss of 1.17 billion yuan, compared to a net profit of 188.5 million yuan in 2010, due mainly to a fair value loss of 769 million yuan in biological assets.
Oceanus has exited from the loss-making F&B segment, which reported a net loss of 22 million yuan for the full year. To-date, all its restaurant outlets in Singapore, Taiwan and China are closed.
The group is now finalising a restructuring package that will include restructuring existing loan and warrant and a capital injection of up to $20 million by strategic partners.
So far, Oceanus has started acquiring good-quality juvenile abalones and is looking to buy high-quality brood stock.
It has also slashed operational costs on its farms by half through trimming headcount and reviewing the breeding density of its tanks.
Business Times - 01 Mar 2012
Poor nutrition may have caused Oceanus abalones' death: probe
Firm also reports a deeper loss of 502.6m yuan for Q4
By LYNETTE KHOO
AN internal probe at Oceanus Group suggests that the mystery death of millions of abalones at Oceanus Group could be due to poor nutrition.
Many of the existing abalones are also found to be laggards, in other words, abalones of poor quality and unprofitable to grow further.
The China-based abalone breeder shed light on the probe yesterday as it reported deeper losses for the fourth quarter ended Dec 31, 2011, due to fair value losses in biological assets.
Calling the discovery 'staggering', Oceanus executive chairman Ng Cher Yew told BT yesterday that the group has since removed the former chief executive, Yu De Hua, from the company, stripped him of his role as a legal representative, and seized all company seals from him.
'We destroyed the seals and registered new seals in China,' said Dr Ng, who has taken over the role of the CEO and legal representative.
Management revamp and operational restructuring has largely taken place, keeping Oceanus on track to turn its financials around latest by 2013, he added.
Oceanus yesterday said its net loss for the fourth quarter ended Dec 31 widened to 502.6 million yuan (S$99.7 million) from 29 million yuan in a year ago period as it marked a fair value loss of 371.2 million yuan in biological assets.
Revenue during the quarter also fell 35 per cent to 78.4 million yuan as Oceanus sold fewer live and processed abalones.
Oceanus had to mark down the value of its abalone stock as a significant proportion were found to be laggards after three daunting months of stock-taking of abalones in over 30,000 tanks at 50 farms spanning two provinces.
Out of the existing population of 134.2 million abalones as at Dec 31, 85.6 million are found to be laggards of between 2cm and 4.2cm and valued at 61 million yuan, instead of 127 million yuan if they were in better marketable conditions.
Two South African abalone experts engaged by Oceanus have ruled out disease as the cause of the abalone deaths and believe that poor nutrition, coupled with poor breeding practices, was the likely cause.
'Though the experts expressed that this problem normally does not produce mortalities of the level recorded on our farms, their calculation of the empty shell volumes in the farms sampled could theoretically support the numbers,' Dr Ng said.
Given that the high mortality of abalones was a 'man-made factor', Oceanus is unable to make insurance claims on the losses, he added.
For the full year ended Dec 31, Oceanus reported a net loss of 1.17 billion yuan, compared to a net profit of 188.5 million yuan in 2010, due mainly to a fair value loss of 769 million yuan in biological assets.
Oceanus has exited from the loss-making F&B segment, which reported a net loss of 22 million yuan for the full year. To-date, all its restaurant outlets in Singapore, Taiwan and China are closed.
The group is now finalising a restructuring package that will include restructuring existing loan and warrant and a capital injection of up to $20 million by strategic partners.
So far, Oceanus has started acquiring good-quality juvenile abalones and is looking to buy high-quality brood stock.
It has also slashed operational costs on its farms by half through trimming headcount and reviewing the breeding density of its tanks.
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