Oceana’s flags half-year profit to be boosted by US subsidiary sales

Oceana’s Desert Diamond fishing boat. File

Oceana’s Desert Diamond fishing boat. File

Published Mar 18, 2024


Global fishing and food products group Oceana said earnings and headline earnings a share were expected to be at least 60% higher for the half-year to March 31, 2024, after high stocks and good prices for fishmeal and fish oil boosted the results of US subsidiary Daybrook.

This had contributed to a 13.2% increase in group revenue for the five months to February 28, 2024, the group said in a trading statement on Friday.

Sales of Lucky Star canned fish were down from the record highs of the prior year, when consumers stocked up ahead of a January 2023 price increase. This resulted in an 8.7% decline in canned fish revenue.

Fishmeal and fish oil revenue in South Africa dropped 36.3%. Lower opening inventory and factory upgrades, which affected production, impacted sales volumes.

The West Coast factory upgrades were progressing as planned. The St Helena Bay canning and fishmeal factory resumed operations mid-January and the Laaiplek upgrade was on track for completion in mid-April.

Revenue from the group’s wild-caught seafood business declined by 18.4%.

Lower horse mackerel catch rates in South Africa were compounded by the Desert Diamond being unable to fish due to a major breakdown, and the time needed to source replacement parts. This was offset by better catch rates in Namibia in the second quarter, as well as firm demand and US-dollar export pricing.

An improvement in fleet utilisation contributed to higher hake sales volumes, with good prices resulting from strong European demand. Poor fishing conditions affected squid catch rates across the industry.

“The focus for the second half will be on improving margins, while sales volumes will benefit from the new Lucky Star canned meat factory, which is now in full production,” Oceana’s directors said.

Anchovy and red-eye landings for the season, which peaks between March and July, would determine the performance of the South African fishmeal and fish oil business.

Pricing for fish oil was expected to remain strong over the short- to medium-term.

Firm demand and pricing for wild-caught species was anticipated to continue and catch rates in South Africa and Namibia showed signs of recovery in the second quarter.

Repairs to the Desert Diamond were expected to be completed during the second half.

Following the certainty provided by the 15-year renewal of fishing rights, the three-year capital investment plans to upgrade the South African processing facilities and vessels were on track, the group said.