7. FINANCIAL ANALYSIS

7.1 Cost of Investment

From the average cost per cage it is found that Penang east coast culturists generally had lower average investment cost per cage compared to that of the Bukit Tambun cage culturists. The cost per cage ranged from $351 to $468 (see Table 13). The cage and nets included items such as platforms, floats, anchors, lines, nets and spare nets. (See Table 14) These differences in cost can be explained as follows:-

1. The time of purchase of these items differed. Owing to the sharp increase in the cost of nets as well as the general inflationary factors over the past 3 years, the Bukit Tambun culturists who were the late comers, had to pay a higher price compared with those in the Penang east coast.

2. The types of material used in constructing the cages were different. For instance, the cage frame made of Chengai Pasir or Chengai Batu wood would cost more as compared to that made of Meranti Minyak wood.

3. A larger cage cost more. This particularly referred to Respondent E whose cages were of size 1.8m by 1.8m by 1.8m while all the others had cage size of 2.4m by 2.4m by 1.8m.

4. The Penang east coast culturists used a number of secondhand items which were purchased at a lower price.

7.2 Financial Performance 1984

Table 15 shows the individual performance of the respondents for the financial year, 1984. The highest sales went to Respondent D with a total of $345,600 while Respondent F had the lowest sales of $78,200. As expected, the highest profit was recorded by Respondent D with a total profit of $180,942. However, the lowest profit was not indicated by Respondent F but by Respondent C with a profit of $23,164.

Note *: Based on 25% straight-line depreciation on the total cost invested. The price of marketable grouper, sea bass and golden snapper were minimal at M$8.25, M$6.75 and M$6.00 per fish weighing 0.6kg. each.

Table 16 shows the average profit of each respondent according to its number of cages, number of shareholders, combination of cages and shareholders and profit margin. Again Respondent D had the highest net profit per cage of $1,675 and Respondent C had the lowest net profit of only $252 per cage. The second and third went to Respondents E and B with profit per cage of $1,240 and $1,079 respectively while Respondents F and A had profit per cage of $777 and $670 respectively.

The higher profit per cage for the Penang east coast culturists could be attributed to direct selling. By direct sales, they were able to get higher prices for their fish since no middleman was involved. However, they would also have to pay a higher price because their management cost (which was usually hidden) would be higher. Furthermore, they would have to bear the risk of bad debts especially with the closure of a few large restaurants in Penang due to poor sales in times of recession. Although culturists in Bukit Tambun received a lower price for their fish, they could avoid such debts because all sales transactions would be taken care off by these middlemen and continuous sale was ensured even during peak production period.

Shareholders of both Respondents B and D received the highest share of profit amounting to $38,847 and $45,236 respectively, while Respondents A and C had the lowest profit per shareholder, viz. $9,375 and $3,309 respectively.

However, when the profit margin of each respondent was analysed, Respondents D and E had the highest profit margins of 52% and 58% respectively. Although Respondent C had the lowest profit margin of only 16%, it could be considered lucrative for a normal business venture. The unusually high profit margin for the Penang east coast culturists again was a result of direct selling.

7.3 Cost of Production

Table 17 shows the cost of production per kilogramme of fish. The cost of production of grouper, for all respondents ranged from $7.04 to $7.90 except Respondent C which had a cost of $9.26 per kilogramme. Those for sea bass and golden snapper however ranged from $3.32 to $5.77 for (sea bass) and from $2.40 to $4.62 (for golden snapper).

Respondent E had the lowest cost per kilo, for all fish species. This was the result of their own supplement of trash feed from their own daily catch. They purchased only an average of 20% of their daily requirement.

7.4 Breakdown Of Cost Of Production

Based on the information obtained, the costs of production/kg. for grouper, sea bass, golden snapper and red snapper were calculated (see Table 17). The average costs of production were M$8.24, M$4.66, M$3.63 and M$4.16 for grouper, sea bass, golden snapper and red snapper respectively. The high cost of production for grouper was due mainly to the high cost of fingerlings (inclusive of high mortality rate) which took up 67.7% of the cost (see Table 17A). For sea bass, golden snapper and red snapper, the of cost fingerlings took up 42.9%, 25.1% and 37.7% of the cost of production respectively (see Tables 17B to 17D).

Note : The low feed cost of Respondent E is due to the supplement of 80% of their trash fish requirement from their own catch.