Oceana lifts profits 16% to US$38.8m on improved catch & sales volumes

SOUTH AFRICA – Oceana Group, Africa’s largest fishing group, reported 16%  increase in operating profit to US$38.8 million (R554m) during the six months to March 30, 2019 supported by increasing canned fish volumes.

The fishing giant’s solid performance was also reflected by improvements in revenue supported by improved pricing realised by its export businesses and improved catch rates.

During the period under review, Oceana’s revenue increased by 3% to US$249.14 million (R3.557bn) which was further bolstered by strong supply chain efficiencies

Despite a sluggish South African market, Lucky Star achieved an 11% volume growth, attributed to its affordability strategy and focused promotional and marketing efforts.

The group recorded improved catch rates in the hake and horse mackerel sectors, but partly offset by lower export volumes due to reduced sea days brought about by planned vessel maintenance in the period.

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According to a Fin24 report, Oceana market outside South Africa, specifically in the US, recorded a 7% increase in revenues in its Daybrook brand primarily due to firmer fishmeal and oil pricing and a weaker SA currency.

The group posted a 28% increase in profit before tax on strong operating performance and the positive impact of lower loan term debt

Headline earnings per share, however, reduced by 19%, primarily due to the non-recurrence of a US deferred tax release in the prior period resulting from a reduction in the US federal corporate tax rate.

However, excluding this effect, headline earnings per share increased by 17%.

Oceana group chief executive, Imraan Soomra said in a statement that the company had kept its focus on both the top and bottom line by driving sales in a strategically diversified portfolio while consistently improving our efficiencies.

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Profitability in the Africa fishmeal business improved, with higher sales volumes and realised prices in South Africa while operations in Angola recorded lower losses following suspension of operations.

Its commercial cold storage business continued to show improvement reflected by increased occupancy levels, storage rates and pallets handled.

The company’s performance at coastal facilities also benefited from increased procurement of frozen fish for the canned fish business.

“Looking ahead, we are confident about the prospects for Lucky Star, although we expect a tougher trading environment and the impact of a weaker rand on imported fish,” said Soomra.

He further highlighted that the second half will be underpinned by improved vessel utilisation in the horse mackerel and hake businesses.

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