South Africa-based Oceana Group saw increased revenue for the year ending 30 September, 2022, driven by higher sales of its fishmeal and fish oil and positive pricing across most products.
According to the reviewed, condensed, and consolidated results for the year, the company’s revenue for its total operations, including commercial cold storage (CCS), increased by 11 percent to ZAR 8.4 billion (USD 486 million, EUR 461 million), up from ZAR 7.6 billion (USD 440 million, EUR 417 million) in 2021. Oceana Group’s operating profit before other operating items increased by 6 percent to ZAR 1.2 billion (USD 72 million EUR 68 million), compared to ZAR 1.1 billion (USD 65 million EUR 61 million) in 2021.
“The group delivered excellent results for the year, recovering strongly in the second half after a first half impacted by low inventory levels carried forward into the year,” a joint statement from Oceana Group CEO Neville Brink and Chairman Mustaq Brey said. “There was continued strong demand and price improvements for most of our products, particularly fishmeal and fish oil, [and] the canned fish business recovered well in the second half after supply was normalized following global supply-chain disruptions and civil unrest the previous year.”
The group’s revenue form continuing operations grew by 12 percent to ZAR 8.1 billion (USD 466 million, EUR 445 million), up from ZAR 7.2 billion (USD 414 million, EUR 396 million), which the company to higher fishmeal and fish oil sales, positive pricing, and the weaker exchange rate on export and U.S.-dollar-translated revenue.
The continuing operations also reported a 31 percent increase in sales and distribution expenditures, reaching ZAR 479 million (USD 27.6 million, EUR 26.2 million), up from the ZAR 365 million (USD 21 million, EUR 19.9 million) in 2021 due “to increased freight and container costs and the effect of a weaker exchange rate on U.S. dollar translated costs.”
Oceana’s canned fish and fishmeal segment in Africa saw a strong recovery in sales in the second half of the year due to growing consumer demand for affordable protein, with sales boosted by its Lucky Star brand’s “relative value compared to competing proteins.”
The group’s procurement of frozen fish rose 45 percent during the year, a trend Oceana attributed to low opening stock levels triggered by global supply-chain disruptions and stock lost during the 2021 KwaZulu-Natal unrest.
Oceana’s African market fishmeal and fish oil sales volumes rose by 6 percent to 26,691 metric tons, up from 25,174 MT in 2021, “driven by an increase in anchovy landings, increased pilchard offal volumes resulting from higher local canning production, and an improved oil yield offset by low opening inventory levels.”
The company's U.S. operations struggled as its fishmeal and fish oil sales went through a lean period. Its sales dipped 10 percent to 54,117 MT from 60,106 MT in the U.S. in 2021 due to low opening inventory levels, it said.
In South Africa and Namibia, Oceana experienced a 16 percent decline in combined sales volumes for horse mackerel, hake, lobster, and squid because of lower catches and scheduled vessel maintenance in Namibia. Operations were also hit by higher fuel costs and quota costs, the company said.
“Significantly higher fuel and Namibian quota costs increased operating costs, with fuel costs increasing by ZAR 100 million [USD 5.7 million, EUR 5.4 million],” Oceana Group said.
Oceana also said poor fishing contributed to a 64 percent decline in squid catch rates for the period, despite strong demand.
The company said it is optimistic about the future performance of canned fish, fishmeal, and oil in the first half of 2023, on the back of higher opening inventory levels.
“Demand for low-cost protein is expected to continue to drive sales volumes of canned fish despite the constrained consumer environment,” the company said. In the coming year, Oceana anticipates an increase in canned fish due to cost pressures, “most notably the effect of the weaker exchange rate on imported raw materials.”
Photo courtesy of Oceana Group
