Eastplats remains wary despite rise in revenue

OCEANA rose nearly 6 percent on the JSE yesterday after Africa’s largest black-owned fishing company reported a 9 percent increase in operating profit to R605 million during the six months to end March.

The group said the uptick was driven by an 18 percent rise in its African operations to R514m.

However, the growth was offset by a 23 percent decline in Daybrook’s operating profit to R91.4m. Oceana acquired 100 percent of US-based fishmeal and oil specialist Daybrook Fisheries for R4.6 billion in 2015, to increase its profile as a global player in the fishing industry. Daybrook’s revenue declined by 4 percent due to lower fish oil sales volumes.

Group revenue increased 2 percent to R3.63bn, primarily due to a 3 percent increase in revenue from African operations. Earnings per share increased 1 percent to 250.4 cents a share, while headline earnings per share was in line with last year’s 249.8c.

Oceana said it had decided to defer its decision on an interim dividend in light of the evolving impact of the coronavirus (Covid-19) pandemic.

Chief executive Imraan Soomra said the group had survived under difficult conditions.

“Our strategy of both customer and geographic diversification is paying dividends,” Soomra said.

“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,” he said.

Oceana was positioned across several geographies, 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.

Soomra said Oceana expected the pandemic to have a negative effect on its hake and horse mackerel segment.

The horse mackerel, hake, lobster and squid segment reported a 9 percent growth in operating profit, driven by a strong performance from the horse mackerel and hake businesses.

However, 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, Soomra said.

Oceana shares closed 2.22 percent higher at R0.92.

EASTERN Platinum (Eastplats) reported a 163 percent increase in revenue for the March quarter, despite foreign exchange losses due to the Covid-19 pandemic that widened the net loss to equity shareholders.

Eastplats, the Canadian company with South African platinum group metals (PGM) and chrome assets, reported that its revenue had increased to $14.2 million (R241.4 million) in March from $5.4m a year earlier.

The JSE-listed company reported an $8.2m net loss to equity shareholders, or a $0.09 loss a share compared with a $800 000 net loss a year earlier, or a loss of $0.01 share. “The increase resulting from a $8.7m change in foreign exchange losses due to a significant devaluation in the rand to dollar (is) as a result of Covid-19,” it said.

Eastplats said it was in a strong financial position with cash of $8.3m and net working capital, excluding non-cash deferred revenue of $8.1m as at March 31.

Net operating cash flows generated were $7.6m compared with $3.7m a year earlier. Its operating loss narrowed to $1.2m from $1.8m last March.

Eastplats warned that the Covid19 effects were changing rapidly and would impact its ability to meet its 2020 targets and outlook.

The company’s 2020 targets subject to capital availability included the completion of the optimisation programme for the retreatment project and maximising operating results of the retreatment project.

Eastplats said tailings retreatment had returned to full operation at Barplats Mines, following the easing of lockdown restrictions, adding that employees had returned to work.

“Barplats operations were not producing for 18 days. Further, as a result of the change in lockdown levels effective June 1, 2020, Barplats will recall construction contractors in a phased return. Based on the appropriate mobilisation, construction activities are expected to begin in relation to the tailings storage facility wall building and the retreatment project optimisation,” it said.

Eastplats said it continued to update and monitor its risk assessments. It had adopted appropriate procedures, consistent with government directives, to maintain a safe workplace for its employees. “The effects of Covid-19 are changing and evolving and the company cannot reasonably estimate at this time all the impacts of Covid-19 or if new or unexpected changes to the lockdown levels will be imposed by the government of South Africa,” said the company.

Eastplats tumbled 19.19 percent to close at R3.20 on the JSE yesterday.