Shrinking squid catches put skids under Premier Fishing
Reduced squid catches amid a price boom coupled with continued global trade restrictions dealt a blow to the results of Premier Fishing and Brands (PFB), controlled by Iqbal Survé said on Thursday.
For the year to end-August, the commercial fisher, processor and marketer reported gross profit fell 20% to R153m from R192m, and group revenue dipped 7% to R475m.
“The continuing decline in the squid catch rates came as somewhat of an industry-wide surprise, which again was out of our control,” said CEO Brent Robertson. “However, historically, we know that the squid resource catch rates can be volatile year on year, but it has significant potential when the resource is strong.”
While the export market for squid remains strong and prices went up, low volumes saw PFB missing out on these gains, the company said. Conversely, solid performances in the lobster pelagic and hake sectors shored up the Cape Town-based group’s performance for the year. This, together with a grant received from the department of trade, industry & competition, saw profit before tax rise to R19m from R18m in 2021.
The 70-year-old group also reported improvements in the farmed abalone sector, particularly in the export market. However, it said cost challenges including electricity, water, fuel, bait, wages and feeding, placed a strain on operating margins.
As banks such as Absa, FirstRand’s FNB and Standard bank try to distance themselves from Sekunjalo companies, citing reputational risk, Nedbank in February tried to withdraw Premier’s banking facilities.
However, the bank lost an Equality Court case on this matter in June and was forced to keep Premier’s accounts open subject to a final court ruling. In July, the Public Investment Corporation, which manages the Government Employees Pension Fund (GEPF), divested from the company, selling its entire 19.73% stake.
African Equity Empowerment Investments, which holds 56% of the shares in the company, has indicated its intention to make a firm offer to acquire all of the ordinary shares in the company that it does not hold.
PFB operates in fishing grounds stretching from Lambert’s Bay in the Western Cape to Gqeberha in the Eastern Cape, while its aquaculture operation is based in the Overberg region.
The company’s share price was unchanged at R1.30 on Thursday.