Issue link: https://maltatoday.uberflip.com/i/1060184
3 maltatoday | SUNDAY • 9 DECEMBER 2018 NEWS MATTHEW VELLA A sudden downturn in the value of Malta's tuna and aquaculture industry in 2017 could be linked to the business activities of Span- ish tuna giant Ricardo Fuentes in Malta. The latest data from the Na- tional Statistics Office paints the picture of a tuna industry in rude health with tuna and other fish-farming activities growing by 15% in 2017 to an output of €203 million. Simultaneously, however, the costs of the industry rose expo- nentially by 42%, or €61 million. That increase in industry costs has completely reversed a trend of growing value added: in 2014, the tuna industry had a gross val- ue added of €18 million, growing the year after to €21 million, then €34 million, and in 2017 sudden- ly crashing to just €147,000. Fishers and industry watch- ers who spoke to MaltaToday said the anomaly made no sense. "How can an industry that is posting annual increases in sales and profits, suddenly go down from a value added of €34 million to just €147,000?" said a govern- ment aide who alerted the news- paper to the NSO data. One industry player contacted by this paper, defending the profits made by his company, pointed fingers at the Fuentes subsidiary in Malta – saying that a sudden reversal from profit to loss in 2017 has influenced the industry's rise in operating ex- penses. As the accounts of the Mare Blu Tuna Farm Limited compa- ny show, the Fuentes fish farm- ing operation in Malta has gone from a pre-tax profit of €7.9 mil- lion in 2016, to a massive loss of €11 million in 2017 – a downturn of 152% in what was supposed to be a year of booming tuna sales. In fact, Mare Blu actually re- corded increased sales, up from €53 million to €56 million in 2017. But the company has also reg- istered a doubling of "related party" creditors in 2017, up to €37 million: unsecured loans, with no fixed date of repayment, and at interest rates of 3% or zero rates to Fuentes companies and subsidiaries. Indeed, in 2017 Mare Blu's li- abilities exploded after register- ing loans from companies such as the Fuentes ship registration companies Princesa Guasimara, Golden Sea Trading, Waterline Trading, Frigorificos De Tunidos SA, Commercializadora de Arm- uelis SA, Tuna Graso, and Viver Atun Cartagena. The company's own auditors flagged the sudden increase in these liabilities. "The company incurred a net loss of €7.5 million [in 2017] and the company's total liabilities ex- ceeded total assets by €7.77 mil- lion… these vents or conditions, along with other matters… indi- cate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern." The auditors also stated in their report that they had not received all the information and explana- tions required for their audit. "Adequate accounting records have not been kept, or those re- turns adequate for our audit have not been received from branches not visited by us. The financial statements are not in agreement with the accounting records and returns." The chief executive of the Fed- eration for Maltese Aquaculture Producers, Charlon Gouder, who said the NSO data also showed a picture of a growing in- dustry, however, expressed cau- tion when shown the figures. "I am saddened and perplexed at the statistics because the pic- ture I have of the companies we represent is one that has report- ed profits on which corporate tax has been paid." Malta's tuna industry downturn blamed on Spanish tuna giant operating in Malta Malta's tuna output has grown in value again, but a spike in costs has made its value-added crash from €34 million to just €147,000 – why? A tuna fattening ranch: purse seiners capture enormous amounts of tuna to place in ranches