Oceana records good results but gets ready for further lockdowns

Africa’s largest fishing company, Oceana Group, is bracing for a second-wave lockdown in its big markets after strong results for the year ending September.

“We remain wary of a second wave in SA, in particular, and we intend to increase testing levels so that we can get to full production as soon as possible after the holiday break. We are carrying good inventory levels so we feel good that we should be able to see ourselves through any further lockdown,” CEO Imraan Soomra said.

Soomra, whose company has operations in SA, Namibia and the US, attributed part of the group’s strong results to anticipating the implementation of lockdowns and preparing the company accordingly.

Oceana lifted revenue 9% to R8.bn and increased operating profit 21% to R1.4bn. This contributed to growth in headline earnings per share of 15%. The company was able to raise the final dividend by 22% to R2.93 per share on account of its strong cash generation.

“We wanted to deliver consistent results in an environment with highly variable returns, and we think we have seen the strength of our diversified portfolio this year,” Soomra said.

Fortune also played a role. Most of the group’s products are consumed in the homes of customers and are not affected by lockdowns that have shut pubs and restaurants worldwide.

Strong demand, together with dollar price increases in mackerel and euro price increases in hake, contributed to a bumper year.

Soomra said US households increased their number of pets, which boosted demand for pet food, a product the group supplies.

Oceana generates 25%-30% of its earnings from the US.

The huge US market will be a focal point for the company in the current financial year.

“We have increased capacity in our fleet, catch and processing capability and we intend to extract a lot of growth from the US. So we think we are in a reasonable position to deliver growth in earnings again next year,” said Soomra.

US HOUSEHOLDS INCREASED THEIR NUMBER OF PETS, WHICH BOOSTED DEMAND FOR PET FOOD PRODUCTS