Oceana reported its mid-year financial results today, posting a 59% increase in headline earnings per share and a 63% increase in earnings per share for the six months ended 31 March 2009 compared to the previous year. Revenue increased by 24% whilst operating profit before abnormal items increased by 69%.
In his review of operations, Oceana Acting CEO Rod Nicol said that the income contribution from canned fish and horse mackerel businesses showed good improvement over the prior year. Sales volumes of canned fish were higher due to the availability of increased quantities of imported product. “Margins showed some improvement and Lucky Star’s market share recovered further as a result of higher sales,” said Nicol.
The 2009 Total Allowable Catch (TAC) for pilchard is 90 000 tons (2008: 90 776 tons). Pilchard landings to date have been encouraging and yields have been good. Canned fish production was accordingly above prior year levels. The Namibian pilchard TAC was announced as 15 000 tons (2008: 15 000 tons) and fishing commenced in May.
According to Nicol, volumes and margins declined at Glenryck Foods in the United Kingdom as a consequence of the depressed economic conditions there and the weakening of sterling against the US dollar.
“Overall, profit from canned fish operations was well up relative to the same period last year,” he added.
Reporting on fish meal operations, Nicol said that due to the seasonal nature of fish meal operations a loss was recorded in the first half although this was lower than in the first half of last year.
“The anchovy A season TAC for 2009 is 299 437 tons (2008: 397 500 tons). Pelagic fishing conditions have been good and landings to the Group’s fish meal plants were higher than in the comparative period. Processing yields were good and production costs were favourably impacted by reducing energy prices. Selling prices for fish meal on the local and export markets were higher.”
According to Nicol, the TAC for west coast lobster was reduced to 2 340 tons (2008: 2 571 tons). He said that quota available to Oceana for the current season amounts to 348 tons (2008: 373 tons). Lobster catch rates in certain fishing zones were below those of the prior year resulting in higher catching costs per unit. Export sales prices were lower in foreign currency but benefitted from weaker exchange rates resulting in prices being higher in rand terms. Profits from lobster declined due mainly to lower sales volumes and higher catching costs.
“A protracted strike by fishermen in the squid industry caused squid catches to be lower than those of last year. A loss was made by this business due to the low volumes and significantly lower euro selling prices.
“Profits from the French fry operation were marginally better than the prior year on similar volumes.”
Reporting on midwater and deep-sea operations, Nicol said that good export prices were achieved although demand has softened in recent months. Overall operating profit from horse mackerel was significantly above that of the comparative period.
“The Namibian horse mackerel TAC is unchanged at 230 000 tons. The Group’s additional (third) Namibian midwater trawler which commenced fishing in August last year performed well. Catches in Namibia and South Africa were very good with high catch rates per trip and an improved mix of larger fish. Volumes were accordingly up on the comparative period last year.”
Hake vessels performed well and operating results showed an improvement with the effect of lower export prices being offset by the weaker rand/euro exchange rate.
Reporting on cold storage, Nicol said that occupancy levels were generally lower as a result of a decline in customers’ import volumes although the stores at Walvis Bay and Duncan Dock, Cape Town experienced higher utilisation. Handling activity levels of frozen product were slightly below those in the comparative period. The expansion at the City Deep facility in Johannesburg was commissioned successfully in December. Operating profit for the six months was lower.
Commenting on the outlook for the reminder of the financial year, Oceana Chairman, Mustaq Brey said, “Whilst earnings growth in the first half of the year was well ahead of last year, performance in the second half will be affected by different foreign currency exchange rates and less favourable market conditions. Growth in earnings and headline earnings for the full year is expected to be at a much lower rate than that of the first half-year. The forecast information has not been reviewed or reported on by Oceana’s auditors.”
Mr Francois Kuttel has been appointed as group CEO with effect from 1st July 2009.
An interim dividend of 31.0 cents per share has been declared which is 19 % higher than 2008
07 May 2009
For further information please contact:
Mbuyi Mtsheketshe – Head: Corporate Affairs and Transformation
Oceana Group Limited
Tel: +27 21 – 410 1400 Fax: +27 21 – 419 5979
Cell no: 082 464 9747 E-mail: email@example.com