Sea Harvest revenue down 5% with slightly higher earnings impacted by Viking buy

SOUTH AFRICA – Sea Harvest Group has reported revenue of US$69.83 million, down by 5% for the six months ended 30 June 2018 from the corresponding period in 2017 impacted by the reduction in the total allowable catch (TAC) in South Africa, and the delayed start to the prawn fishing season in Australia.

Headline earnings improved slightly by 1% to US$7.74 million weighed down by cost impacts from the US$61mn acquisition of Viking fishing group.

Also its performance was influenced by its Australian seafood subsidiary Mareterram which saw late start of the prawn season.

Gross profit increased by 4% to US425.57mn for the period and the gross profit margin improved by 3% to 36.6%, benefitting from further efficiency gains across both the fleet and factory operations and an increase in higher margin export sales volumes.

During the period under review, Sea Harvest Group generated US$13.56mn in cash from operations while it utilized US$9.04 million in investing activities ending the period with US$22.35 million of cash on hand.

In April, the company said it added Harvest Mzansi to its fleet and its factory optimization project to conclude in the fourth quarter of this year, all geared at delivering margin enhancement.

In its acquisitive goals, the company plans to invest in fishing and complementary sectors of the South African food and agricultural industry.

Sea Harvest also announced that its wholly-owned subsidiary, Cape Harvest Food Group Proprietary Limited (Cape Harvest), has concluded a share purchase agreement of US$36.65 million to acquire the entire issued share capital of Ladismith Cheese Company Proprietary Limited.

“The acquisition of Ladismith Cheese will provide Sea Harvest, through its wholly-owned subsidiary company, Cape Harvest, with an ideal platform from which to build on in the dairy sector through the development and acquisition of additional dairy and allied beverage products,” said Fred Robertson, Chairperson of the Group’s majority shareholder, Brimstone.

The company looks to retain a positive outlook as global demand for high-value, sustainable certified wild-caught seafood remains high and this will continue to drive higher margin export growth.

“We expect to see significant benefit from the complementary nature of the Viking fishing business and our diversification into aquaculture and complementary sectors of the South African food and agricultural sectors,” added Robertson.

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