Sea Harvest demonstrates sheer mettle against waves of continued uncertainty, reporting 5% rise in revenue

SOUTH AFRICA – Despite the ongoing volatility caused by COVID-19, Sea Harvest has once again proved its resilient and defensive nature in delivering revenue for the year ended 31 December 2021 of R4.6 billion (US$298m), 5% ahead of 2020.

Its operating profit of R691 million (US$44.8m) was 10% ahead of 2020 with earnings per share increasing by 9% to 168 cents per share.

The overall results were pleasing with the group’s different business segments delivering a mixed performance while navigating a world gripped by a pandemic for a second year running.

The group’s fishing operations in South Africa remained a strong performer increasing operating profit by 18% to R672 million (US$43.5m), despite a 5% reduction in the Hake total allowable catch (TAC) in 2021, a 7% strengthening in the Rand to the euro, and a 21% increase in the price of fuel.

The Cape Harvest Foods segment experienced significant organic and acquisitive growth resulting in revenue increasing 28% to R1.3 billion (US$84m) offset by an increase in milk prices and other once-off costs from the expansion projects in the Ladismith Cheese business.

The company also succeeded in executing its growth strategies within the dairy business by increasing production capacity in the powder and butter segments and acquiring Mooivallei Suiwel to provide additional cheese capacity.

It further completed the acquisition of 53.7% of BM Foods Group; thereby diversifying its South African food offering into new categories, including convenience and prepared foods.

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Meanwhile its unit in Australia enjoyed strong catches resulting in increased volumes of its own wild-caught fisheries products.

Critical to the group’s growth strategy in Australia is the execution of a transformative acquisition that will help reduce the businesses cost base and increase its market relevance in the region.

To this end, in 2021, the group commenced negotiations to acquire the Western Australia-based fishing and related businesses of MG Kailis, a well-established and market leading vertically integrated seafood business with over 50 years’ experience in the seafood industry in Australia.

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This culminated in the signing of agreements on 11 January 2022, with the transaction expected to close on 2 April 2022.

Meanwhile, the Sea Harvest Aquaculture business faced another year of tough trading conditions with the curtailment of international air travel and resultant inflated freight costs from South Africa, together with continued lockdown restrictions in the Far East.

Sea Harvest’s performance in 2022 is highly reliant on the outcome of the 2021/22 fishing rights allocation process, which allocates resources in a sustainable manner and proposes fees payable in respect of applications for commercial fishing rights.

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