Sea Harvest expects 31% decline in profits hit by Viking buyout

SOUTH AFRICA – South African fishing company Sea Harvest expects interim basic earnings a share to decline by 31%, a slowdown attributed to the acquisition of rival Viking Fishing Holdings.

For the six months ended June, basic earnings were expected to be between 46cents and 50c a share, a decrease of between 31% and 25% as compared with the earnings a share of 67c reported last year.

The company, however said its headline earnings for the period were expected to increase by up to 3% to between US$7.87mn and US$8.10mn, compared with headline earnings of US$7.87mn reported last year.

“Basic headline earnings per share are expected to decrease by between 20% and 13&, to between 45c and 49c a share, compared to the headline earnings a share of 56.6c a share reported for the six months to June 2017,” the group said in an update to the Johannesburg stock exchange.

The company added the decrease in earnings was mainly attributed to an increase in the weighted average number of shares in issue (Wanos) due to the annualised effect of the shares issued at listing on March 23 last year being included in the Wanos calculation for only a portion of the period in 2017.

Sea Harvest, majorly owned by Brimstone Corporation announced in June that it had reached an agreement to acquire fishing business of Viking Fishing for US$62.81 million in line with its strategy and vision of becoming one of the largest black owned diversified global seafood and food companies

The transaction was to be satisfied through a combination of cash on hand, bank facilities, an issue of Sea Harvest shares and vendor funding.

The acquisition bid which was tabled by Sea Harvest and a consortium of black-owned companies was approved by South Africa’s competition tribunal on June 19 offering it an opportunity to grow via acquisitions in the fishing and aquaculture sectors.

Viking Fishing operates a fleet of 30 vessels from Cape Town, Hout Bay, Mossel Bay, Durban and Maputo to catch and process hake, horse mackerel, pilchards and anchovy as well as west coast rock lobster, prawns and tuna.

The Viking deal also gives the Sea Harvest consortium a 51% stake in Viking Aquaculture, which farms abalone, mussels, oysters and trout in SA and Namibia.

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