There are a couple of curious things arising from the statement tonight. First, it is not clear what Yu De Hua has done wrong to be dismissed as the Director, Legal Representative and Chairman of the PRC subsidiary of Oceanus.

Second, the other 2 board members who are PRC nationals have been replaced too -- by Singaporeans Ms Yap Siew Khim and Mr Chan Kok Pun etc.

It is probable that there has been wrongdoing or incompetence by some or all of the PRC members. Scary, hor, even tho the wresting of control seems assuring. Wonder how the PRC members were kicked out -- that could be another interesting yarn. Who knows?

The high mortality rate should be covered by insurance, no?
Someone should query the management becos there is no mention of insurance coverage in the announcement. I remember they took up insurance and that Dr Ng was so confident (cocky) that insurance was not needed.

OCEANUS: Now insured against disease, natural disasters, theft

....the Group is expected to record a loss for Q3 and year to date, as compared with a profit for the corresponding period in 2010, largely due to the following:

i. Losses arising from change in fair value of biological assets due to high mortality of abalones in third quarter 2011. The PRC subsidiary reported a loss of 42m units of abalones from its land based farms.

ii. High production costs.

iii. The scientific analysis on the farms has been completed and detailed recommendations made, acceptance and implementation at the PRC subsidiary has been delayed.

Amen.

The selling is merciless ... in the same second there can be many transactions, which look suspiciously like computerised trading. That feared monster! At 10 cents --- this bugger is at 50% discount to Taiwan TDR price of 20 Singapore cents. Blur?

Quite surprising that the selling continues to be so heavy so close to the 52-week low of 9.8 cents. What ails this business, once a market darling? 

More than 13.4 m shares traded on Oceanus last Friday made me sit up and take note. Price stuck at 10.5 cent level, very near the bottom of 10 cents. Could something be brewing?

The major shareholder bought a huge chunk a few monts ago. Puzzling thing is who was the seller? I don't think the transaction was done on-market.

Anyone knows>? http://info.sgx.com/webcorannc.nsf/Announcement4-12MonthsByCompanyNameAndCategory/7BE0426B483DFD95482578A900346BCF?opendocument

11.9 cents  .... temptiing. Wat do you think?

From Oceanus, I hv learnt that there is no such thing as little or no risk in business. Aquaculture is risky indeed. And a rapidly growing business is fraught with execution risks, even if the CEO  or chairman is bullish, as Dr Ng has been. Why he is now so low-profile?

1. The board of directors of Oceanus Group Limited (the “Board”) wishes to issue a profit guidance regarding the financial results of the Company and its subsidiaries (the “Group”) for the second quarter ended 30 June 2011 (“Q2”).

2. Based on the information currently available, the Group is expected to record a loss for

Q2, as compared with a profit for the corresponding period in 2010, largely due to the

following:

a. Losses arising from change in fair value of biological assets.

i. This is largely due to mortality of abalones in June 2011 arising from an operational misstep in managing the flow of abalones from sea-based farms to the processing plant. The Company had successfully started pilot production of dried abalones in April 2011 and was gearing up for commercial-scale production from 2Q2011 onwards.

However, a delay in processing equipment delivery caused the large sized abalones to be kept for longer than intended at sea, exposing them to overcrowding due to increased size resulting in high mortality.

ii. Since FY2010, the Company had made a deliberate decision to process

its abalones to enhance its value. Consequently, a record number of

abalones was harvested for processing in 2Q2011, resulting in a reduced

pool of biological assets available for fair value computations.

b. Delayed sales. Since dried abalones command the highest margins, live sales

were further curbed to channel more stock for processing. In 2Q2011, the

Company accumulated dried abalone inventory that had since been partially sold

and with the rest expected to be sold in 2H2011.

Oceanus Group, the world’s largest operator of abalone farms, plans to buy two companies this year to expand its food business and sell shares of its restaurant unit as early as 2012.

Oceanus expects to buy a Taiwanese food-packager by mid-2010 and acquire an Australian company later in the year to boost its supply of wild abalones, Chairman Ng Cher Yew said. Ah Yat Abalone Group, its chain of restaurants, will sell shares in Taiwan or Hong Kong, he said.

The company is expanding to ride on China’s growing consumer market as the nation’s economy is expected to grow 9% this year, based on central bank estimates. Oceanus became the first foreign company to list shares in Taiwan last year as ties between the island and the mainland reached their warmest since the two were separated after a civil war six decades ago.

“We want to see how we can basically acquire at least one Taiwanese packaging and processing entity and look at the Chinese market,” Ng, 50, said in a Jan. 8 interview in Taipei. The Taiwan listing “gives us a better profile with the government and an image in the market that will help the business.”

The company is based in Singapore, where its shares are traded. Oceanus’s operations are mainly in China, where its 137.9 million abalones are in 24,000 tanks along the country’s southern coast.

More Restaurants
The Taiwan stock has risen 21% since the Taiwan depositary receipts were sold at NT$9.5 (41.6 cents) apiece in December, compared with a 2.1% gain in the benchmark Taiex index. The shares in Singapore lost 7.7% during that time.

Oceanus has 20 restaurants in markets including Singapore and China, according to Ah Yat’s website. The company aims to expand to 170 next year, with at least 120 on the mainland, Ng said.

The restaurant business may be worth as much as 2 billion yuan ($408 million) in two years, said Jeffrey Lau, an analyst at Polaris Capital (Asia) in Hong Kong.

“It will be positive for Oceanus, as investors are in favor of Chinese catering companies,” Lau said.

Oceanus is considering the listing in Hong Kong or Taiwan because of demand for abalones from consumers in the two markets, Ng said. The restaurant chain, which is not profitable yet, may turn profitable by the end of the year, said Ng, declining to say how much the chain is making now.

“The restaurant has a different risk profile, so eventually if it’s independent, it makes more sense,” Ng said.


http://www.theedgesingapore.com/the-daily-edge/business/11486-oceanus-to-buy-2-food-companies-spin-off-restaurant-unit.html