(Yicai Global) April 15 -- Chinese aquaculturalist Zoneco Group, which has been adrift in a sea of scandals over its frequent scallop disasters, turned a profit in the first quarter with a forecast of up to CNY10 million (USD1.42 million) after transferring some of its aquaculture use rights, it said in a statement yesterday.

Zoneco’s revenue is expected to fall by about CNY28.7 million in the first quarter compared with the same period last year from the fallout of the Covid-19 pandemic, the company based in Dalian in China’s northeastern Liaoning province said. Its revenue in the first quarter rose over the same period last year, however, due to the estimated gain of CNY73.39 million from transferring the use of its sea area off Guanglu Island in the Yellow Sea in the quarter. 

The company suffered a loss of CNY43.1 million in the same period last year.

The firm has resumed over 90 percent of its operations and production, it added.

Zoneco’s shares [SHE:002069] closed 0.36 percent down at CNY2.80 (40 US cents) today.

Formed in September 1992, Zoneco engages in aquaculture, aquatic processing, aquatic trade, and cold chain logistics. Its farmed species include scallops, sea cucumbers, abalone, conch and sea urchin.

Scallopalypse

The company’s main business is farming scallops, but these bivalves have suffered a slew of disasters in recent years.

The company announced the first anomaly with its scallop stocks in October 2014 and was forced to write these off to the tune of almost CNY800 million (USD115 million).

Zoneco again announced an irregularity in January 2018, this time scrapping CNY630 million in stocks. It cited a shortage of food that starved the fan-shelled mollusks to death as the cause.

In July the company was fined CNY600,000 by the China Securities Regulatory Commission for alleged information disclosure violations and Wu Hougang, its chairman, was slapped with a life-long market ban.

Zoneco was charged with collecting sea cucumbers during the no-fishing period in August, but the company denied these allegations.

Zoneco once again reported a mass death of scallops worth over CNY300 million in November, which posed a risk of inventory impairment. The cause of this mass mortality is as yet unknown. 

It lost CNY399 million last year, down 1,341.79 percent compared to a profit of CNY32.1 million in the same period of 2018.

Editor: Ben Armour