Sea Harvest reports 86% growth in half year revenue boosted by acquisitions

SOUTH AFRICA – Sea Harvest, a South African seafood and fisheries group, posted 86 percent growth in half year revenues to R1.87bn (US$125.68m), buoyed by its recent acquisitions.

During the six months period to end June, the Brimstone controlled firm recorded 70 percent increase in operating profit which rose to R281m (US$ 18.88) while net profit increased by 44% to R161m (US$10.82m).

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Sea Harvest, which listed on the Johannesburg Stock Exchange in April 2017, saw its Headline earnings per share increase by 32%. The company said it is seeking further expansion.

“The satisfactory results come on the back of the acquisition of Viking Fishing and Ladismith Cheese, which have been earnings accretive for the company and the 100% buyout and subsequent de-listing of our Australian subsidiary, Mareterram, which serves as a beachhead for further growth in that strategic market,” CEO Felix Ratheb said.

Sea Harvest acquired Ladismith Cheese in January 2019 for R527m (US$35.42m), saying at the time it was seeking to diversify earnings and benefit from growing consumers in natural-fat products.

In May 2019, the company completed its 100% acquisition of Mareterram in Australia — now Sea Harvest Australia that led to the subsequent delisting of the Australian subsidiary.

Sea harvest said that would strengthen its presence in Australia and provide a platform for growth in the region.

In June last year, the company also spent R885 million in the acquisition of Viking fishing Group and 50% of Viking Aquaculture.

Sea Harvest plans to diversify its portfolio in order to mitigate risks of relying solely on revenue from South Africa fisheries, especially in the light of the recent delay of the Fishing Rights Allocation Process (FRAC) for 2020.

According to a Business Day report, Environment, Forestry and Fisheries Minister Barbara Creecy suspended the allocation process for quotas across 12 commercial fisheries on August this year.

Sea Harvest welcomed the move  that could have seen new entrants to the market being favored during quota allocations.

As part of its diversification strategy, the group said that construction of a third powder plant at Ladismith Cheese had commenced, with the plant expected to be operational during the first half of 2020.

Sea Harvest retained a positive outlook for the remainder of its financial year.

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