Oceana still experiencing demand for its products
Black-owned seafood group delighted with performance, but wary of Covid-19 disruption
THE OCEANA Group said yesterday that it expected its hake and horse mackerel segment in the Western Cape to be negatively effected by the Covid-19 outbreak as the number of infections peak, leading to a higher risk of business interruptions.
The province accounts for more than 65 percent of the country’s infections and deaths.
However, Africa’s largest blackowned fishing company said the risk of a large-scale impact in the immediate future was mitigated by the diverse and wide footprint of its operations, the geographic spread of its customer base, and the high levels of in-home consumption of its products.
Chief executive Imraan Soomra said the group strategy of customer and geographic diversification was paying dividends.
“Not only are we well positioned across geographies, but our customers are located right across the world, with fresh fish being in demand in Africa and Europe, pet food in the US, fishmeal in Europe, Africa and Asia, and canned fish in South Africa.
“What has been critical in the Covid-19 environment is that our products are primarily consumed in-home, which has protected us from closures in the tourism and hospitality industries,” Soomra said.
The horse mackerel, hake, lobster and squid segment reported a 9 percent growth in operating profit for the six months to the end of March, driven by a strong performance from the horse mackerel and hake businesses.
The group’s operating profit increased 9 percent to R605 million, driven by growth of 18 percent in its African operations to R514m, but was offset by a reduction in the US, where Daybrook’s operating profit declined 23 percent.
Oceana acquired 100 percent of Us-based fish meal and oil specialist Daybrook Fisheries for R4.6 billion in 2015.
Group revenue increased 2 percent to R3.63bn, primarily due to a 3 percent increase in revenue from African operations. However, Daybrook’s revenue declined 4 percent due to lower fish oil sales volumes.
Oceana’s earnings per share increased 1 percent to 250.4 cents a share, while headline earnings per share were in line with last year’s 249.8c.
The group said it has decided to defer its decision on an interim dividend in light of the evolving impact of Covid-19. The group will review the decision in the coming months.
Soomra said the weakening of the rand would have a positive impact on the next set of results, given that Oceana was a net exporter in the second half of the financial year.
“I am delighted with our improved performance in April and May, and we have recorded very good demand for all of our products, in particular canned pilchards,” Soomra said.