Illegal fishing impacts Q1 revenues: Oman Fisheries

Oman Fisheries Company (OFC), which is partly owned by the Omani government, has welcomed efforts by the authorities to crack down on “illegal foreign fishermen” whose poaching activities, the publicly listed company claimed, contributed to a significant decline in its earnings during the first quarter of this year.
The company’s Chairman stated in the Directors’ Report for the January-March 2019 period that illegal fishing took a sizable bite out of the revenue targets linked to procurements of small pelagic fisheries from artisanal Omani fishermen.
“Oman Fisheries’ procurement of fish totally relies on artisanal fisheries, which is not predictable in terms of availability per species and per quantities,” the Chairman of the Board of Directors explained in the newly published Directors’ Report for Q1 2019.
“It was unfortunately the case that during the last three months, while the government took strong action against illegal foreign fishermen involved in small pelagic fishing (sardines), which represents more than 60 per cent of our commercial targets.
As a result, the company was able to export less than 600 metric tons (MT) per month of sardines instead of the 2,500 MT as budgeted,” the official stated.
Significantly, illegal fishing was among a host of “major challenges’ that had impacted its operations and consequently its bottom-line in the first quarter of this year. Restrictions on the exports of tuna “in whole round form”, imposed by regulatory authorities since the start of this year, led to a dramatic reduction in overseas shipments of tuna in the first quarter. As a result of these restriction, tuna exports were limited to only 300 MT as opposed to the targeted level of over 2000 MT, the report said.
“At the same time, landings have been very sporadic during the quarter, inducing high procurement prices non suitable for canning market and quality inconsistencies for the fresh market,” the Chairman stated. Tuna, like sardine, plays a key part in Oman Fisheries’ profitability, according to the company.
Also impacting earnings were continuing restrictions imposed by Chinese authorities over the use of the Vietnam Corridor for imports into China, the report said. These restrictions apply particularly to the fisheries sector in Oman, which exports a major portion of its fish through the Vietnam Corridor into China, it explained.
Oman Fisheries Group reported a net loss of RO 782K for Q1 2019 compared with a net profit of RO 65K for the corresponding period of 2018. The wholly state-owned Oman Food Investment Holding Company (OFIC), the government’s food sector investment arm, currently holds the government’s 24 per cent stake in Oman Fisheries Co.