Oceana reports 2% rise in H1 revenues boosted by improved African operations

SOUTH AFRICA – One of Africa’s leading fishing companies, Oceana Group has delivered a resilient operating performance for the six months ended 31 March 2020 despite the difficult trading conditions in the latter quarter reporting a 2% increase in revenue to R3.62b (US$210m) from R3.55b (US$205.95m) recorded during the same period last year.

Oceana Group is incorporated in South Africa, but has operations in Namibia and the United States.

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Its core businesses include procuring, processing, marketing and distribution of canned fish, fishmeal, fish oil and catching horse mackerel, hake, lobster and squid.

Other operations include both deep-sea and mid-water trawling, refrigerated warehousing and logistical support services.

The group attributed the rise in revenue to increased African operations’ revenue of 3% mainly attributable to improved canned fish, fish oil and horse mackerel pricing, increased cold storage occupancy levels and the favourable impact of the weaker Rand on export revenues.

Revenue from the companies USA operations, Daybrook, declined 4% due to lower fish oil sales volumes following lower prior year catches and oil yields, partially negated by firmer global fish oil pricing and the favourable US Dollar exchange rate.

According to the company’s interim unaudited results, group operating profit increased by 9% to R605 million (US$35m) compared to R554 million (US$32.1m) earned the previous year, driven by growth of 18% in African operations, offset by a reduction Daybrook’s operating profit which shrank by 23%.

Net interest expense increased by 7% from R130m (US$7.5m) recorded in March 2019 to R139 million (US$8m) in the current period. Its group profit before tax increased by 10% to R466 million (US$27m).

On a comparable basis, excluding the effects of the incremental dividends withholding tax, headline earnings increased by 4%.

Due to the current uncertain times brought by the COVID-19 pandemic, Oceana has undertaken a precautionary measure of deferring their 2020 interim dividend payment, pending a possible review in the coming months in a bid to preserve cash and provides greater balance sheet flexibility, reports The Namibian.

The company’s products are sold in 46 countries across the world and have been considered as essential goods thus the group has been continuing with its operations despite the COVID-19 while implementing the stipulated health and safety protocols.

“All our operations were classified as essential service providers and continued to operate during the Covid-19 lockdown. As the infection rate in South Africa increases, our operations may be interrupted to some extent, with the risk greatest in our mid-water vessel operations,” said CEO Imraan Soomra.

Soomra says the company does not foresee the risk of a large-scale impact in the immediate future.

In respect of long-term fishing rights, he says in South Africa, cabinet had approved the extension of fishing rights to December 2021 with exemptions granted to existing rights holders to continue fishing based on current allocations, while in Namibia the fishing rights of partners have been extended for a further seven years.

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“It is worth pointing out that, given the diverse nature of the business, only 16% of Oceana’s fish supply is up for renewal in 2021,” he says.

The chief executive officer says post-Covid-19, there would be a great need for collaboration between the government and industry.

The company is listed on both the Johannesburg Stock Exchange and the Namibian Stock Exchange.

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