Oceana Group, one of the largest seafood companies in South Africa, said COVID-19-related foodservice trends in the European and Chinese seafood markets have continued to have an impact on the company.
Oceana posted a mixed financial performance in Q1 2021, largely dictated by the uncertainties created by the global pandemic, it said.
The company’s after-tax profit increased 11 percent to ZAR 348 million (USD 25.6 million, EUR 21 million) for the six months ending 31 March 2021, up from the ZAR 313 million (USD 23 million, EUR 18.9 million) for the similar period in 2020.
The group reported an overall revenue decline of 2 percent, falling from ZAR 3.6 billion (USD 266.9 million, EUR 219.4 million) in 2020 to ZAR 3.5 billion (USD 262.6 million, EUR 215.8 million).
More recent revenue figures were slightly worse. For the six months ending 31 March, 2021, Oceana Group – which has six subsidiaries of Lucky Star Limited, Blue Continent Products Proprietary Limited, Commercial Cold Storage (Namibia) Proprietary Limited, Erongo Marine Enterprises Proprietary Limited, Amawandle Pelagic Proprietary Limited and Amawandle Hake Proprietary Limited – reported a 4 percent dip in overall revenue to ZAR 583 million (USD 42.9 million, EUR 35.2 million), down from ZAR 605 million (USD 44.5 million, EUR 36.6 million) earned in 2020.
The overall cash generated from all Oceana Group operations globally slipped by 4 percent to ZAR 674 million (USD 49.6 million, EUR 40.7 million) down from ZAR 683 million (USD 50.2 million, EUR 41.3 million) in Q1 2020.
“The business environment for the first half of the 2021 financial year continued to be shaped by the ongoing uncertainties brought on by the COVID-19 pandemic on economies across the globe, impacting both the pace of economic recoveries as well as consumer spending patterns,” a joint statement by Oceana Group Chairman Mustaq Ahmed and CEO Imraan Soomra said. “While demand for our core products remained strong, the Group’s supply chain and operations were hampered by temporary disruptions brought on by lockdown regulations and restrictions in key supply territories.”
Operating profit from its African operations fell 1 percent, while that of Daybrook – a U.S. subsidiary the company acquired in 2015 – declined by 16 percent.
Despite the decreased revenues, Oceana enjoyed increased demand for its canned fish as its market share grew, it said. However, total sales declined from impacts of COVID-19, which also led to lower sales volumes in December 2020 and exacerbated by lower supply service levels in March 2021 due to lower frozen fish availability, it said.
“Shipping and port delays resulted in a 60 percent supply shortfall compared to the comparative period with a resulting reduction in production and consequently lower inventory levels,” Ahmed and Soomra said. “The combined effect of COVID-19 lockdown restrictions, global container shortages and port delays in Cape Town resulted in a 60 percent decline in frozen fish imports, reducing production levels and canned fish inventory available for sale.”
Oceana reported global demand for fish meal supported improvement in pricing for its African fishmeal and fish oil products, despite the division’s profitability coming under pressure “from early season bycatch limitations which constrained catch levels for the industry to 37 percent of the prior period.”
“This, together with the port and freight logistics challenges which impacted export sales, has materially offset the benefit from favorable fishmeal pricing,” Ahmed and Soomra said.
Both the fishmeal and fish oil division reported a 24 percent decline in operating profit due to “lost production days, lower fixed cost absorption and lower fishmeal volumes.”
It was good news for Oceana’s South Africa and Namibia horse mackerel, hake, lobster, and squid business, which experienced 9 percent and 13 percent growth, respectively, in revenue and operating profit.
For the six months to 31 March, 2021, horse mackerel operations remained resilient in both countries, showing no changes to performance compared to the previous half-year results although supply shortages and a strong demand across traditional African markets for the seafood product led to a favorable pricing trend that actually compensated for reduced Namibian catch rates.
“Notwithstanding a 9 percent reduction in landings largely as a result of lost sea days due to vessel maintenance, this segment delivered significantly increased revenues and improved operating profit for the period,” the Oceana officials said.
Within the reporting period, Oceana says the 2021 Hake Total Allowable Catch (TAC) fell 5 percent relative compared to 2020, which coupled with the lower industry-wide catch rates and two statutory vessel dry-docks led to a 9 percent and 25 percent reduction in sea days and landings, respectively.
Photo courtesy of Oceana Group
