Indonesian shrimp farming giant Central Proteinaprima (CP Prima) widened its losses even further in 2016, as it continued to try to resurrect its under siege shrimp operations.

The group reported a loss of almost IDR 2 trillion (€139.7 million/$150.1 million) for the full year of 2016, down further from the loss of IDR 1.2 trillion (€83.8 million/$90.1 million) reported the year prior, meaning auditors still have "significant doubts" over its ability to continue operating at all.

Sales over the period came to IDR 8.5 trillion (€593.7 million/$637.9 million), down from sales of IDR 8.9 trillion (€621.7 million/$667.9 million) reported a year earlier, while the company reported an operating loss of IDR 1.2 trillion (€83.8 million/$90.1 million) compared with an operating profit of IDR 18 billion (€1.3 million/$1.4 million) in 2015.

These negative results reflect the company’s ongoing financial challenges, as the group projects that its cash flows for the current year “will not show the group’s ability to settle its liabilities.”

The group is planning to restructure its bonds to improve the capital structure and cash flows, it said, but so far it hasn't received approval for the restructuring plan, "which would allow the company to fulfill its payment obligations".

“As the group has not obtained formal approvals from the bondholders and the banks on the above mentioned restructuring plan, there is material uncertainty that may cast significant doubt about the group’s ability to continue as going concern,” said the auditors of the report.

For the financial year, the group reported an accumulated deficit of nearly IDR 5.5 trillion (€384.1 million/$412.7 million), mostly due to the cessation of its shrimp farming in certain locations in Lampung in 2011; problems with virus in subsidiaries’ main ponds in 2013, and the termination of certain cooperation agreements with farmers during 2016.

In addition the company saw foreign exchange losses from bonds payable and bank loans.

Change to farming agreements

On Oct. 17, 2016, the company, along with Centralpertiwi Bahari (CPB) -- its main farming operation -- ended cooperation agreements (known as the TIR scheme) with individual farmers by which they were obliged to sell their harvests to the group in return for financial and operational assistance.

This scheme has now been replaced by the Independent Shrimp Farming Operation Scheme under which farmers have the opportunity to buy feed, fry, electricity and supporting facilities from the group, and sell their harvests to any client.

Based on this agreement, CPB will release farmers’ receivables, take over the farmers’ loans with the banks, and also give termination compensation.

CP Prima said it hoped the new arrangement “finally will improve the company and CPB’s financial performance and cash flow.”


For more seafood news and updates, follow us on Facebook and Twitter or sign up for our daily newsletter.