Highlights

  • Group revenue up 14% to R7 733 million
  • Operating profit up 24% to R1 234 million
  • Group profit before taxation up by 32% to R883 million
  • Headline earnings per share (HEPS) up by 86%
  • Dividends up 362% to 416c per share

Africa’s largest fishing group, Oceana, today reported a strong turnaround in performance in its centenary year, with improvements in revenue, operating profit and headline earnings per share.

Despite continued economic pressure, the Group increased revenue by 14% to R7,733 million and operating profit by 24% to R1,234 million. The full year’s performance benefited predominantly from improved landings and yield for the Gulf Menhaden resource in the US, a recovery of canned fish volumes, and efficiencies achieved in the cannery production process. These were partially offset by lower global fish oil prices, reduced fish landings in Angola and lower Namibian horse mackerel catch rates. The performance of the Commercial Cold Storage and Logistics’s Gauteng portfolio remains a challenge, and plans to turn around its performance are in place.

“Our consistent focus on driving sales, improving efficiencies and managing foreign currency exposure are paying dividends. Our growth this year is once again a function of the strength of our diversified portfolio,” said Oceana Group CEO Imraan Soomra.

“HEPS is up by 86% and benefitting from a R238 million once-off release of deferred taxation following the reduction in the US federal corporate tax rate. I’m delighted to report a recovery of dividends to 416 c per share for the full year.”

Daybrook, Oceana’s fishmeal and fish oil operation in the US, set a new seasonal catch record of 803 million fish, leading to a 24% increase in revenue, and a 9% increase in volume caught and processed. Daybrook’s record landings and improved fish oil yield were partially restrained by weaker global fish oil prices, leading to a 5% increase in operating profit.

“Our strategy to diversify our offerings, improve margins and reduce exposure to price volatility, along with increased sales volumes to other regions, have mitigated the negative impact of China’s tariffs on imported US fishmeal. Additionally, we have three projects underway that will reduce maintenance costs, improve yield and increase efficiencies in our US operation,” said Soomra.

Revenue from African operations was up by 11%, while operating profit increased by 35% driven by volume growth and a favourable adjustment in net foreign exchange from a R69 million loss in 2017 to a R19 million gain for this period.

The canned fish and fishmeal operation in Africa benefited from strong demand stimulated by affordable and consistent pricing, as well as improved cannery efficiencies and supply chain logistics, which led to a significant increase in operating margins. Oceana’s cannery production continued to be supplied primarily by imported frozen fish from various geographies.

“The Group’s Horse Mackerel operation enjoyed a boost to sales volumes in South Africa for the year, thanks to a marked improvement in the Desert Diamond’s catch rates. Vessel utilisation for all our hake vessels improved this season after our investment in preventative maintenance last year,” says Soomra.

“Our squid business continues to perform well with a fourth consecutive year of positive results.

“The year was not without its challenges,” says Soomra. “The moratorium on pilchard fishing in Namibia and a poor catch season in Angola affected the performance of our associates and joint ventures. Our Commercial Cold Storage and Logistics division suffered from an oversupply of pallet space in Gauteng, which impacted occupancy levels and pricing. We have strengthened the leadership team in this division and expect to see marked improvement in management and operational matters in the coming financial year.

“These improved financial results give me confidence in our long-term strategies for continued growth, and in the Group’s resilience in the face of a number of challenges. In the coming year, we will continue to seek organic growth by furthering our core businesses.”

In his outlook for the Group, Soomra said that exchange rates for exports looked positive, and a continued improvement in volumes – especially in the canned fish segment – was also being targeted. However, he cautioned that the first 6 months’ performance would be tempered year-on-year as a result of the once-off US tax benefit.

Soomra added, “As we bring our centenary year to a close, we are also proud to announce our status as a level 1 B-BBEE contributor which is testament to our commitment to improving transformation and making a meaningful economic contribution to the communities in which we operate.”

ENDS

www.oceana.co.za

Issued by Corporate Image on behalf of Oceana Group