Fishing firm Pingtan Marine Enterprise plans to launch more products on Chinese e-commerce giant JD.com in the future, after reporting a drop in fourth quarter profit, but a surge back into the black for its 2017 financial year.

For Q4, revenue was $16.4 million, up 24% year-on-year, with gross profit of $12.2m, compared to $9.9m for 2016. The company’s Q4 net income was $4.8m, down 43% y-o-y.

Chinese firm accused of illegal shark fishing continues cooperation with e-commerce giant

The company reported a 207.7% y-o-y increase in 2017 revenue to $63.2m, with gross profit of $22.1m, compared to a loss of $8.8m for 2016. Pingtan 2017 reported net income of $29.7m, compared to net loss of $13.7m.

Pingtan expects its e-commerce sales to grow in 2018. On Jan. 4 this year, the company entered the online consumer food market by offering its fish products on JD, one of China's largest e-commerce retailers.

The company first launched three of its fish products -- including pomfret, yellow croaker and ribbon fish cuts -- on JD.com, and it expects to launch more products in the future, said Pingtan.

“Looking forward, we intend to accelerate the construction of our processing facilities and expand our territory to enrich product mix and expand our market share through online retail businesses,” said Xinrong Zhuo, chairman and CEO.

“Since the second quarter of 2017, we have started partnerships with major chain restaurants and one of China's largest e-commerce retailers, JD.com,” said Zhuo.

“After months of efforts from both the JD and Pingtan teams, we have successfully launched three of our fish products online. As to date, we have made record online sales of over 10,000 pieces, capturing the attention of e-commerce customers. Our online success has motivated us to seek to launch more products in the future,” he said.

The company “delivered strong operating and financial results in 2017 despite the impact from the Indonesian government’s moratorium and subsequent actions on our fishing operations in Indonesian waters”, said Zhuo.

“We were dedicated to enlarging fishing territories and increasing production capacity and product mix through expanding operating vessels in various fishing methods to harvest higher margin fishing products,” he said. “During the year, we have been paying close attention to any new changes and trends in fishing policy and have been actively exploring for new locations to deploy our vessels.”

In January, the company announced that an additional two fishing vessels -- squid jiggers -- are operating in international waters.

These two vessels departed from port on Dec. 2, 2017 and were put into operation after arrival at their fishing destination in the international waters of southwest Atlantic Ocean on Jan. 10, 2018.

104 vessels idle in Indonesia

The company's strong results come despite the fact over 100 of its vessels are not fishing, due to issues in Indonesia and the Democratic Republic of Timor-Leste, where the company has been busted for shark finning.

As of Dec. 31, 2017, 12 of the company's 140 vessels are located in the Bay of Bengal in India; 11 are located in international waters (including one refrigerated transport vessel); and 13 are located in the Democratic Republic of Timor-Leste, but are not operating.

The remaining 104 vessels are located in Indonesian waters and continue to be idle due to the Indonesian government’s moratorium and subsequent actions, the company said.

In early December 2014 the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country’s Ministry of Maritime Affairs and Fisheries (MMAF) could combat illegal fishing and rectify ocean fishing order.

In February 2015, the company ceased all fishing operations in Indonesia. During the moratorium, the company was informed that fishing licenses of four vessels operated through PT. Avona, one of the local companies through which Pingtan conducts business in Indonesia, and the fishery business license of PT. Dwikarya, the other local company through which Pingtan conducts business in Indonesia, were revoked.

As a result, and because license renewal was prohibited due to the general moratorium, all local fishing licenses of the company’s vessels in Indonesia are presently inactive. The MMAF has not yet restored license issuing or renewal process for vessels built abroad, said the company.

In November 2015, the Indonesian government announced that the moratorium had concluded. As the MMAF has not implemented new fishing policies and resumed the license renewal process, the company does not know when exactly licensing and renewal will start, however.

Since Pingtan derived a majority of its revenue from this area, this ban has caused a significant drop in production.

In September 2017, Pingtan was informed that the fishing licenses of 13 vessels deployed to the Indo-Pacific waters were suspended and the vessels were docked in the port by the Ministry of Agriculture and Fisheries (MAF) of the Democratic Republic of Timor-Leste.

"The MAF is alleging and is investigating whether false statements were made during the licensing process and the vessels were simultaneously registered in Indonesia," it said. Pingtan disputes these allegations.