Johannesburg - Fishing company Oceana Group reported yesterday a 69 percent growth in operating profit to R1.7 billion for the year to end September, largely driven by the acquisition of Daybrook and 24 percent growth in African operations.
Group revenue grew 34 percent to R8.2bn, up from R6.2bn, while headline earnings per share (Heps) increased 20 percent to 703.4cents from 588.2c reported during the corresponding period last year.
Chief executive Francois Kuttel said the group had been able to deliver solid results despite tough trading conditions in the African markets.
Kuttel said growth was driven mainly by the inclusion of Daybrook and Amawandle (formerly Foodcorp) assets for a full period, supported by 13 percent revenue growth in African operations.
The group acquired 100 percent of US fishmeal and oil specialist Daybrook Fisheries for R4.6bn and Amawandle for R355 million last year.
Kuttel said strong volumes in canned fish, fishmeal and hake, higher occupancy levels in the CCS business, and favourable pricing in most markets boosted the growth margins.
He said the Daybrook acquisition now represented almost 40 percent of the company’s total market capitalisation.
“This acquisition has thus far delivered exactly what we wanted it to, and more,” Kuttel said. “Our investment in Daybrook is a critical component of our commitment to securing long-term opportunities for value growth.”
Daybrook delivered revenue of R1.9bn and operating profit of R668 million during the period.
The group said the Lucky Star canned fish and fishmeal division continued to be a star performer by contributing 52 percent to group revenue despite adverse fishing conditions and reduced quota allocation in South Africa and Namibia.
Kuttel said: “The 13 percent increase in sales volumes reflects competitive pricing against other proteins, a strong marketing strategy and the introduction of new products and flavours, with Lucky Star Pilchards maintaining market share of (about) 80 percent.”
Oceana’s industrial fishmeal business recorded a 19 percent increase in landings of anchovy and redeye herring in South Africa, with a further 13 000 tons landed and processed in the newly commissioned fishmeal plant in Angola through the Oceana Boa Pesca joint venture.
This resulted in a significant increase in sales volumes of fishmeal and fish oil.
The hake profitability improved significantly as a result of increased volumes following the Amawandle acquisition, firmer euro prices combined with a favourable exchange rate, as well as lower fuel prices.
Oceana’s own and contracted quota now represents 12.4 percent of the Hake Deep Sea Trawl TAC, up from 1.1 percent five years ago. Horse mackerel prices faced continuing pressure due to oversupply and tough conditions in traditional African markets.
CCS Logistics continued to deliver revenue growth, driven by record occupancy levels in its 11 cold stores and supported by a strong focus on cost efficiencies. The new transport services business doubled its profits this year.
The board declared a gross final dividend amounting to 357c a share.
Oceana shares rose 1.56 percent on the JSE yesterday to close at R116.70.
BUSINESS REPORT