Chief executive Rushaan Isaacs.
Chief executive Rushaan Isaacs.

Premier Fishing and Brands remains financially stable despite Covid-19 impact

By Edward West Time of article published May 13, 2020

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CAPE TOWN - Premier Fishing and Brands, one of the largest black-owned and managed fishing companies, said yesterday that taxed profit fell 63.6 percent to R20 million in the six months to February 29, mainly due to factors outside its control, such as the impact of Covid-19 on export markets and lower total allowable catches.

Chief executive Rushaan Isaacs said Premier had faced big challenges over the period, but “our results are satisfactory and better than expected, given that we are still facing these challenges”.

“The group is in a financially stable position with no debt, it is cash positive and we have put strategies in place to mitigate some of the losses suffered because of the pandemic,” she said.

No interim dividend was declared due to the uncertain environment.

Premier is a vertically integrated fishing company specialising in the harvesting, processing, marketing and sales and distribution of marine products.

It owns and manages factories, an abalone farm, facilities and fishing vessels, and prides itself on being one of the most transformed in the fishing industry in terms of management and employees.

Revenue fell to R215m from R287m, due mainly to lower catch rates. Earnings before interest, depreciation and amortisation decreased to R28m from R69m. Headline earnings a share fell 63.3 percent to 4.94 cents per share.

Isaacs said consistent performance across most operating divisions contributed to the “pleasing” result, despite the negative impact that the socio-political unrest in the Far East and the Coronavirus had on the fishing industry globally.

The demand for Premier’s branded products remained strong, but Covid-19 severely impacted exports 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.

Other challenges included the decrease in the total allowable catch the of West Coast rock lobster, which had persisted since the previous financial year. Premier also experienced the lowest landings of squid, which was an industry-wide trend.

Chief financial officer Brent Robertson said low catch rates industry-wide in the squid division had led to a decline in revenue and profitability.

“This division has the tendency to go through seasonal trends, but the potential and outlook in this division remains a positive one,” he said.

Cost-containment measures were put in place to preserve as much cash as possible, so that once the pandemic was under control, the group could continue to focus on its growth strategies for the abalone farm’s expansion and pursue potential acquisitions.”

Although fishing and farming were rated as “essential services”, parts of the expansion of the abalone farm had been put on hold in the lockdown.

Premier expected to increase its abalone production capacity from 120 tons to around 300 to 350 tons per annum, once the expansion was completed. Group chief executive of the majority shareholder, African Equity Empowerment Investments, Valentine Dzvova, said growth plans for the Premier Group were taking place in earnest.

Premier Fishings share price closed 11.49 percent higher at R0.97 on the JSE yesterday.

BUSINESS REPORT

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