Indonesia’s largest shrimp producer CP Prima had another difficult year in 2015, posting an overall loss for the year of IDR 1.2 trillion (€79.7 million/$90.5 million) increasing on its loss of IDR 390 billion (€25.9 million/$29.4 million) in 2014, according to its latest financial results.

In addition, as of Dec. 31, 2015, CP Prima reported accumulated losses of nearly IDR 3.5 trillion (€232.6 million/$263.9 million).

As a consequence, the company’s independent auditors -- Purwantono, Sungkoro & Surja -- state in the report that these conditions “indicate the existence of a material uncertainty that may cast significant doubt about the company and its subsidiaries' ability to continue as going concerns.”

The group’s revenues in 2015 fell 5.5 percent to IDR 8.98 trillion (€596.7 million/$677.1 million), down from IDR 9.5 trillion (€631.3 million/$716.3 million) in 2014, while gross profit was more or less flat year on year at IDR 1.46 trillion (€97 million/$110.1 million).

Operating profit shrunk 89 percent to IDR 18.3 trillion (€1.2 billion/$1.4 billion) from IDR 166.9 trillion (€11.1 billion/$12.6 billion) a year earlier.

The accumulated losses have been mostly caused by the halting of the company’s shrimp farming in certain locations in Lampung in 2011; the appearance of a virus in its subsidiaries’ main ponds in 2013; and foreign exchange losses from bonds payable, said the report.

The group suffered loss before income tax amounting to IDR 874 billion (€58.1 million/$65.9 million) in 2015.

It said this was mainly due to a foreign exchange loss amounting IDR 439 billion (€29.2 million/$33.1 million) which was caused by the depreciation of the Indonesian Rupiah against the USD.

Finance costs also amounted to IDR 357 billion (€23.7 million/$26.9 million) in the year, mostly because of an increase in bond interest rates from 2 percent in 2014 to 4 percent in 2015, it said.

The decline in the global shrimp market price over the year also directly resulted in a decrease in shrimp product sales and gross profit, said CP Prima.

Plans for recovery

However in the next several years, CP Prima is planning to initiate some strategies to support the group’s growth, it said.

These plans include increasing shrimp production through pond revitalization, improvement of feed quality through the addition of more protein, improvement of water quality through automatic pond cleaning, and improvement of fry, as well as maintaining stricter bio-security procedures.

The company also plans to increase sales volumes of shrimp feed through a program of technical assistance with smaller ponds and cooperation with fish farmers to process their output into value added product.

A focus will also be on producing quality feed and fry which can improve resistance from diseases through a continuous research and development program, it said.

The company also hopes to drive sales by expanding its range of processed food products in domestic and overseas markets through new launches.

These include products such as premium and marinated frozen food products as well as dry and canned products, it said.

There will also be an expansion of its sales distribution channels, and increased penetration into several countries in Asia, Europe, Australia, and the United States.

Despite the unhealthy finances, in 2015 the company saw its total shrimp production reach 45,000 metric tons and is planning for further growth this year, Arianto Yohan, assistant vice president at CP Prima, told IntraFish.

“Production in 2015 was 45,000 metric tons and we are looking 50,000 metric tons in 2016,” he said.

“We have been affected by the recent drought in Indonesia, it happens to everybody, but of course we find some measures to handle it.

“The volume itself is affected by also the size of the shrimp, because when the farm is so dry the salinity becomes so high and it slows down the growth of the shrimp.”

Around 95 percent of what the company produces it exports, Yohan said.

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