FUZHOU, China, May 10, 2016 /PRNewswire/ -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME), ("Pingtan," or the "Company") a global fishing company based in the People's Republic of China (PRC), today announced its unaudited financial results the first quarter ended March 31, 2016.

Factors Affecting Pingtan's Results of Operation

As previously disclosed in Form 10-K and 10-Q the Company filed in 2015, 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 monitor the operations of existing fleets and fight illegal fishing activities. As a result, all licensed fishing vessels operating in Indonesian waters were informed by the Indonesian government to operate within strict guidelines and subsequently to cease operation, in order to avoid potential enforcement actions by the Indonesian Navy such as boat seizures.

Among the Company's 135 fishing vessels, 117 of these vessels operate in the Arafura Sea of Indonesia. To cooperate and comply with the Indonesian government's fishing license check procedures, in January 2015, the Company reduced its operations - since February 2015, Pingtan has ceased operations of the 117 vessels which are licensed to operate in Indonesian waters. Since the Company derives a majority of its revenue from this area, this ban caused a significant drop in production.

In November 2015, the Indonesian government announced that the moratorium had concluded. The Company's expectation is that the MMAF will implement new fishing policies and resume the license renewal process although this has not yet occurred. In the interim, the Company's financial results will continue to be materially adversely affected by this moratorium.

As a result, the Company's sales for the three months ended March 31, 2016 decreased significantly as compared to the three months ended March 31, 2015.

During the three months ended March 31, 2016, the Company purchased fish from a third party to satisfy customer demands. The resale of purchased fish to its customers generated a positive gross margin on such sales. The positive gross margin in these reselling activities partially offset the decrease in the Company's overall gross margin for the three months ended March 31, 2016.

First Quarter 2016 Financial Highlights (all results are compared to prior year corresponding period)

• As a result of the above, revenue from fishing business was $4.1 million compared to $28.7 million.
• Gross loss was $3.3 million, compared to gross profit of $11.5 million, and gross margin was (80.5%) compared to 39.9%, due to reduced scale of operations resulted by the moratorium described above.
• Net loss was $5.5 million, or $(0.06) per basic and diluted share, compared to net income of $8.4 million, or $0.10 per basic and diluted share. The decrease was primarily due to the same reasons described above.

Management Commentary

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "While the first quarter of 2016 was challenging due to the moratorium by the Indonesian government, our team successfully met customer demands and needs by purchasing fish for resale from a third party supplier. These resale activities of purchased fish generated a positive gross margin on such sales and helped us to continue to maintain positive relationships with key customers. We believe it is only a matter of time before fully licensed fishing companies like Pingtan are allowed to resume fishing in Indonesian waters. We continue seeking to diversify our fishing territories and we are actively negotiating with neighboring countries to expand into new fishing regions."

Consolidated Financial and Operating Review

Revenue

Revenue from the fishing business, sales of frozen fish and other marine catches for the three months ended March 31, 2016, were $4.1 million compared to $28.7 million for the same period in 2015. The decrease was primarily due to the Company ceasing its operations in Indonesia waters since February 2015 resulting from the moratorium described above.

Gross Margin

The Company's gross margin was (80.5%) for the three months ended March 31, 2016, compared to 39.9% in the prior-year period. The significant decrease was primarily due to the reduced scale of operations resulting in lower revenue, which is reflected in the allocation of fixed costs, mainly consisting of depreciation, to cost of revenue; partially offset by the positive gross margin from our fish resale activities.

Selling Expenses

Selling expenses were $0.3 million, for the three months ended March 31, 2016, compared to $0.7 million, in the prior-year period.

General & Administrative Expenses

For the three months ended March 31, 2016, general and administrative expenses were $1.5 million, compared to $1.4 million, in the prior-year period.

Net (Loss) Income

Net loss for the three months ended March 31, 2016, was $5.5 million, or $(0.06) per basic and diluted share, compared to net income of $8.4 million, or $0.10 per basic and diluted share, in the same period of 2015. The decrease was primarily due to the reasons described above.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Wednesday, May 11, 2016, at 8:30 AM ET.

The dial-in numbers are:

Live Participant Dial In (Toll Free): 877-407-0310
Live Participant Dial In (International): 201-493-6786

To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page, or go to: http://ptmarine.equisolvewebcast.com/q1-2016. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan

Pingtan is a global fishing company, engaging in ocean fishing through its wholly-owned subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing. Pingtan Fishing, a provider of high quality seafood in the PRC, primarily engages in ocean fishing with many of its self-owned vessels operating within the Indian Exclusive Economic Zone and the Arafura Sea of Indonesia.

Business Risks and Forward-Looking Statements

This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements that the Company's expectation is that the MMAF will implement new fishing policies, that the Company seeks to expand into new fishing territories to help reduce its dependency on a single region, diversify its revenue stream and fulfill the needs of its customers. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the risk factors contained in Pingtan's SEC filings available at www.sec.gov, including Pingtan's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Definitive Proxy Statement. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.

CONTACT:
Roy Yu
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
[email protected]

INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior, Senior Vice President
Tel: (212) 836-9606
[email protected]

In China
Katherine Yao, Senior Associate
Tel: +86 10 6587 6435
[email protected]

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SOURCE Pingtan Marine Enterprise Ltd.