Fish farming company in Dubai posts sinking profit

What's Down: The country's only publicly traded fish farming business said profits fell by two thirds as revenues halved and continued costs from discontinued operations.

The country's only publicly listed fish farming business said first-quarter profit fell by two thirds as revenue halved and costs from discontinued operations continued.

Net income at the International Fish Farming Holding Company, better known as Asmak, dropped to Dh3.66 million in the first three months of the year compared with Dh10.11m last year.

The company recorded a loss of Dh128,000 as it continued to be hurt by a halt to farming operations in Oman and the UAE. Revenue fell to Dh58.7m from Dh101.75m. Asmak initially focused on farms in the Emirates, butended operations in the UAE and Oman in 2009 because of huge blooms of oxygen-depleting algae that suffocate fish, The National previously reported.

The company now buys fish from around the world to supply local supermarkets.

It also diversified into other sectors, mainly property and construction. It retains a fish farm in Ajman.

After the weak results, Asmak sought to reassure shareholders yesterday in a statement on the website of the Abu Dhabi bourse.

"The management confirms its commitment to support and enhance the core activities of the company to attain continuous growth," Asmak said. Analysts were sceptical about the statement. "The core business, which is farming fish, hasn't worked," said Mohammed Ali Yasin, an independent analyst in Abu Dhabi. "They haven't made any money on fish, but rather the other businesses they are involved in."

Asmak's stock has surged 418 per cent on the Abu Dhabi Securities Exchange (ADX) since January. After the sudden rise, the ADX made an inquiry on April 17 into the share activity. The company responded by saying it was "fully committed to the laws and regulations of the Securities and Commodities Authority … and has no information or explanation behind the sudden interest in the stock".

The shares declined 8.6 per cent on the ADX last Wednesday and 9.2 per cent on Thursday in the lead-up to first-quarter results.

The shares fell 9.8 per cent yesterday to close at Dh15.55.