Venue: Furama Hotel
Time & date: 2 pm, May 30
This is part 2 of our Oceanus AGM report. Part 1 was @ OCEANUS AGM: Rare case, ex-CEO voted out of board
|OCEANUS GROUP suffered massive losses from the death of a large part of its ablone population last year.
It's a sharp reversal of fortune for what was said to be the world's largest land-based abalone farming operation.
At the AGM, its executive chairman, Dr Ng Cher Yew, was on the ropes as shareholders expressed anger and disappointment at the management of the operations. The fiasco led to Yu De Hua, a mainland Chinese national, being removed from his CEO post in February as he oversaw the company's operations and finance.
Shareholder Low Cze Soo, 60, the former CFO of a mainboard-listed company, pointed out the disheartening fact that the stock price of Oceanus had gone from 24 cents to just 6.7 cents between AGMs.
He asked about Oceanus' move to re-stock its abalone population and said: "When will we see good results?"
My takeaways from the meeting:
1. Strategy for recovery: Oceanus bought some 180 million juvenile abalones at the start of this year, said Dr Ng.
In October, it would be time to sell a portion of these for cashflow while the rest would be allowed to grow further.
Oceanus is also importing good brood stocks now and target to breed 400 million abalones.
Some of these will be sold next January/February for cashflow. Progressively, the others will also be sold while only about 10 million will be kept and grown till 2015 when they are big.
Based on current live prices in China, the 10 million could fetch RMB1 billion, said Dr Ng.
"So it means 2013, 2014, we will improve. In 2015, the result will be very good. Beyond 2015, we should have a stable business if we still have the same number of tanks and we are not expanding the business."
2. Looking for new CEO: Dr Ng is interim CEO while Oceanus is talking to a few candidates and will announce its choice in due course.
"The new CEO need not be mainland Chinese but he must understand farming," said Dr Ng.
(That sounded like a hint that a Singaporean would be the next CEO.)
3. Restaurant business, processing plant: To questions from a shareholder on the status of the restaurant busines and processing plant, Dr Ng said: "We have cut out the restaurant business. It's not core. It's not making money, so let's cut it out.
"As for the processing plant, the investment is done. We have few abalones now. The key is we must focus on building our population to do live sale. When the abalones are big, we can use the processing plant. Now we have scaled it down -- the operating costs have been scaled down drastically.
"We now process a certain amount for a few customers by buying abalones from outside -- it's enough to break even."
4. Restructuring: In the past, Oceanus was structured like any Chinese enterprise listed in Singapore -- the CEO was a mainland Chinese national who oversaw the operations in China and the finance team (made up of mainland Chinese) there.
The restructured Oceanus, however, has a Singapore finance team which is in charge of the finance operations in China.
And whatever the nationality of the CEO, his ops team will be independent and separate of the finance team, said Dr Ng.
5. Move on: While shareholders questioned how the fiasco happened and made clear their unhappiness with the management, Dr Ng's message was: Yes, we can delve endlessly on the past and wished the operations were done differently -- but the better thing to do is to move on and to implement the changes needed to secure Oceanus' survival and recovery.