Financials

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First Quarter Financial Statement for the Period Ended 28 December 2009

Income Statement for the first quarter ended 28 December 2009

Consolidated Statement of Comprehensive Income

Balance Sheet

Review of Performance

1QFY2010 (3-month ended 28 December 2009) vs 1QFY2009 (3-month ended 31 December 2008)

Income Statement

PARD recorded stable revenue of HK$1,564.0 million as compared to HK$1,562.1 million in the same period last year.

Revenue from the frozen fish supply chain management ("frozen fish SCM") division, which accounted for 49.4% of turnover, rose 3.1% to HK$772.9 million from HK$750.0 million due to an increase in sales volume.

Revenue from the fishing division, which accounted for 50.6% of total revenue, dropped 2.6% to HK$791.1 million from HK$812.1 million. The increase in revenue from the North Pacific trawling operations as a result of the Group's strategic decision to defer usage of fishing quota from the previous quarter to 1QFY2010 was offset by lower revenue recorded from fishmeal sales due to lower sales volume despite higher fishmeal price.

The fall in sales volume of fishmeal from 32,800 MT to 6,200 MT was caused firstly by timing effect in sales activities, as the level of carry-over inventory available for sales in 1QFY2010 was significantly lower as compared to same period last year. Secondly, most of this quarter's fishmeal production of 33,400 MT, which is a stable production compared to 33,700 MT in the corresponding period last year, has been retained as inventory for sale in 2QFY2010.

By markets, the People's Republic of China ("PRC") remained the Group's largest market with sales of HK$1,373.7 million, accounting for 87.8% of total revenue. Sales to East Asia amounted to HK$34.8 million, accounting for 2.2% of total revenue. Sales to other geographical areas were up more than two-fold mainly due to increased sales to Africa, a new market for the Group.

Gross profit increased by 7.6% to HK$311.4 million from HK$289.4 million, due mainly to higher operating efficiencies achieved by the fishing operations.

Selling expenses increased by 154.3% to HK$60.2 million in line with higher sales volume and a change in sales terms in the fishing division.

Finance costs decreased by 28.0% to HK$82.9 million as a result of prevailing low market interest rates.

As a result of the above, net profit attributable to owners grew 15.2% to HK$100.4 million from HK$87.1 million while net profit margin increased to 9.6% compared to 8.5%.

28 December 2009 vs 28 September 2009

Statement of Financial Position

Non-current assets increased by 2.4% to HK$7,801 million due to the acquisition of one additional catcher vessel for the fishing division's South Pacific operations during the period, coupled with the balance progress payment for the refurbishment of factory vessel.

The operating model of our factory vessel in South Pacific operations is a unique concept of harvesting and processing fish. This state-of-the-art factory vessel will further enhance the operating efficiency and cost effectiveness of the fleet by halving the crew size and decreasing fuel consumption as compared to a conventional fleet, plus this will lead to a reduction in carbon footprint. Moreover, the production concept of a factory vessel working alongside a fleet of catcher vessels enables the fleet to maximise its operating days at the high sea and achieve full production on most of the fishing days during the fishing season.

Current liabilities increased by 9.7% to HK$3,153 million due mainly to an increase in bank borrowings from the fishing division, mainly due to higher fishmeal inventory loans and the funding for the South Pacific operations.

Net debt to equity ratio increased slightly to 75.4% from 72.1% mainly due to higher working capital required for the fishing division.

Commentary

We remain positive on the market outlook for this year. The demand for frozen seafood products in the PRC continues to increase in line with growing affluence and rising demand for protein from fish. We intend to further strengthen our distribution in the PRC to leverage on this demand trend. We also have plans to continue expanding our distribution network in Europe and Africa to further increase the sales volume of frozen fish.

The outlook for the Group's fishing division is also positive. The South Pacific fishing fleet, which can process up to 2,100 MT of fish per day, is now in place and will commence its first major fishing season for Jack Mackerel. The Group has secured sales contracts to supply 200,000MT (subject to catch volume) of Jack Mackerel at US$1,060 per MT in 2010. As the major fishing season for the Jack Mackerel spans from March to October, we anticipate that the second half of the financial year should show significant contributions from the South Pacific operations. Meanwhile, the North Pacific trawling operations is set to benefit from a 13.5% increase in total allowable catch, leading to a corresponding higher expected catch volume. The Peruvian fishmeal operation is also expected to benefit from the anticipated rising fishmeal prices. The Group has contracted to sell 54,485 MT of fishmeal at an average price of US$1,415 per MT, compared to the average selling price of about US$900 per MT in 2009. This is expected to have a positive impact on the Group's revenue and profitability.

All in all, the Group will continue its efforts to manage costs and improve profitability in all areas of the business. We will also continue to explore options to further reduce our gearing and strengthen our balance sheet.

Barring unforeseen circumstances, the Group is expecting to deliver satisfactory results for the current financial year.