South Africa’s Sea Harvest reports 4% decline in half year profit triggered by COVID-19 restrictions

SOUTH AFRICA – Sea Harvest, South African seafood and fisheries group, has reported a 4% slump in profits for the six months to the end of June 2020 as Covid-19 supply chain constraints hit its operations.

The group said its profit after tax for the period decreased to R154.7m (US$9.15m), while headline earnings remained constant at R170m (US$10m), from R169m (US$9.9m) during the comparative period last year.

The group’s revenue for the period increased 7 percent to R2 billion (US$118.3m) but revenue from Sea Harvest’s aquaculture business slumped 63% to R15m (US$887k), due to a closure of Far East markets in early 2020, and the curtailment of air freight from SA.

Its cost of sales increased 6 percent on the back of cost containment and lower fuel prices while operating expenses for the period increased 5 percent to R387m (US$22.8m).

The group operated as an essential service during the Covid-19 lockdown, saying that there had been an increase in home consumption during the pandemic, but a slowdown in demand by pubs and restaurants.

Chief executive Felix Ratheb said although Sea Harvest continued operating as an essential service provider, the effect of the pandemic and the lockdowns in the markets in which the group operated meant that it did so below normal capacity levels.

This also required a change in product mix, including diverting more product to retail markets, which negatively affected profits.

The company’s results were mostly driven by stable performances from its South African fishing segment, the Cape Harvest food group segment, which included Ladismith Cheese, as well as its Australian operations.

The Australian operations were offset by continued challenges in the aquaculture segment that was severely impacted by the effects of Covid-19.

Sea Harvest said it had invested significant resources in skills development, employment equity, supplier and enterprise development initiatives, as well as projects focused on job creation, the youth and rural development.

The group had spent in excess of R3.2m (US$189k) during the period on community-based projects, including Covid-19 relief.

Ratheb said Sea Harvest will remain cautious for the remainder of 2020.

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