Demand for Premier’s products still strong
CAPE TOWN - JSE-LISTED Premier Fishing and Brands, one of the largest black-owned and managed fishing companies in South Africa, continues to experience strong demand for its products despite ongoing Covid-19-related uncertainties, chief executive Rushaan Isaacs said yesterday.
Covid-19 had severely impacted the export market of West Coast Rock Lobster and abalone in the Far East, squid in the Italian and Spanish export markets and the export of South Coast Rock Lobster to the US, she said at the release of the group’s annual results for the year to August 31.
This, together with the lack of export opportunities to Premier’s clients, was exacerbated by undue pressure placed on the selling prices of abalone, which affected the operating margins, with a decline in revenue that in turn meant lower profit for the year.
She said the group, one of the largest fishing companies in the country, had moved swiftly during the year to mitigate the effects of the pandemic by curbing expenditure, maximising revenue and preserving cash flow sustainability at all of its divisions.
Revenue of R449 million was generated, down from R575m, and earnings before interest tax depreciation and amortisation came to R55m, well down from R99m last year. Headline earnings per share decreased to 2.49 cents per share compared with 11.06c for 2019. No dividend was declared due to the uncertain Covid-19-related environment.
Isaacs said the results were “reasonable” given the context, and which were “achieved by the group through their focus and determination”.
Abalone farm production increased to 229 tons to the end of 2020 from 161 tons in 2019.
The lobster and pelagic divisions continued to deliver “solid performances” as the resource continued to be stable. All Covid-19-related risks in these divisions had been mitigated and prospects remained positive.
One of Premier’s largest projects, the expansion of its solar-powered abalone farm, was nearing completion after months of lockdown restrictions.
Based on the current growth of spat, Premier expected the abalone farm to produce between 300 and 350 tons of abalone in the near future. The abalone farm is one of the first in the country to be solar-powered and plans were in place to further “green” the farm. Since the start of the expansion in 2018, the farm has already increased its production by 91 percent from 120 tons to 229 tons.
The squid sector experienced industry-wide low landings with a decrease of 47 percent, compared to the previous fishing season. This was not unusual for the squid sector, as it has the tendency to go through seasonal trends, but the outlook for this division remained positive and catches had already improved post the financial year end.
“The group is cash positive and has adequate financial resources and continues operating well under the circumstances. The one major aspect that pleases me most is how all our staff members remained resilient during the year,” said chief financial officer Brent Robertson.
He said preservation of cash was still paramount due to the impact that Covid-19 had on the immediate future, but he expected the group would prosper in the 2020/21 financial year due the strategies already in place.