Oceana Group moves to stabilize operations, optimistic about prospects after difficult half year

SOUTH AFRICA – Africa’s largest fishing company, Oceana Group, has appointed Neville Brink, who has served as interim CEO since February this year, as its permanent CEO.

According to the Lucky Star brand maker, Neville brings a wealth of experience to the role and valuable institutional memory.

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He has had an illustrious career in the fishing industry that spans more than 38 years, 27 of which have been with Oceana.

Neville takes over the helm of the company from Imraan Soomra who tendered his resignation as Executive Director and Chief Executive Officer of the company in February.

As part of its executive reshuffling, the fishing group has terminated the employment of its suspended CFO Hajra Karrim after findings of gross misconduct.

Karrim joins a string of senior executives, including the company secretary, who have parted ways with the fishing group in the past few months.

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Meanwhile, the company endured a difficult first half but recovering inventory levels, improved pricing, better fishing and continued strong demand across its product lines point to a stronger second-half performance.

Low opening inventory levels, continued global supply chain disruptions and poor fishing conditions saw revenue decline by 11%, with gross margin 3.7% lower at 30.2% for the six months ended 31 March 2022.

Operating profit declined by 41% to R345 million (US$22.2m) and profit after tax by 52% to R166 million (US$10.6m), after also incurring R42 million (US$2.7m) in additional audit and legal fees related to the delayed publication of its 2021 results. Its headline earnings per share was down 51% to 126.4 cents.

“We’ve weathered a perfect storm but demand for affordable, healthy protein remains undiminished and this combined with improved fishing, better pricing and recovering inventory levels all indicate a better second half, traditionally our stronger period.

“While input cost pressure remains, this is offset by increasing production and circumspect price increases on canned fish, which we’re careful to keep affordable as it is a healthy staple in so many households,” says Neville Brink.

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Supply chain disruptions and opening stock levels caused an 8% decline in revenue at Oceana’s flagship brand, Lucky Star, but operating profit increased by 1%, benefiting from a more than doubling of production to 2.4 million cartons (March 2021, 1 million) as the business worked to restock.

At the Group’s US subsidiary, Daybrook, low opening inventory following poor catch rates and weather disruptions in the previous season resulted in declines of 33% in fishmeal and 15% in fish oil sales. This was somewhat offset by price increases of 5% of fishmeal and 4% for fish oil.

Its Commercial Cold Storage (CCS) business registered decline in revenue and operating profit due to an 9% decrease in occupancy levels and a 16% reduction in capacity following the closure of two stores last year.

“Throughout this difficult period, we have never forgotten the responsibility we have to our investors, lenders, employees, consumers, the communities in which we operate and the South African fishing sector.

“As we anticipate the second half, our commitment to invest in and develop South Africa’s oceans’ economy remains unwavering as does our brand purpose of positively impacting lives,” says Neville.

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