Cape Town, South Africa-based fish-processing company Oceana Group posted a 29 percent year-over-year increase in revenue for the fiscal year ending 30 September 2023, driven by an increase in global prices on nearly all of its products – particularly fish oil.
Oceana Chairman Mustaq Brey and CEO Neville Brink said in a joint statement issued on 27 November that a weaker South African rand that aided in export value, and a surge in revenue from its U.S. operations, pushed its FY 2023 revenue to ZAR 10 billion (USD 532 million, EUR 486 million) – the company’s highest posting in five years. Comparatively, last year’s revenues totaled ZAR 8.1 billion (USD 431 million, EUR 314 million).
“The group’s performance benefitted further from increased demand and improved pricing across all wild-caught seafood products,” the statement said.
Oceana Group’s operating profit from continuing operations increased 19.8 percent year over year to ZAR 1.5 billion (USD 80 million, EUR 73 million), while its profit after tax in the category jumped 25.2 percent to ZAR 990 million (USD 53 million, EUR 48 million).
A series of business moves – such as holding higher levels of inventory and diversifying operations across various species, geographic locations, and multiple currencies – enabled the company to leverage high demand for canned fish, fishmeal, and fish oil, as well as “remain resilient in a challenging operating environment characterized by high inflation, rising interest rates, a volatile currency, and increased load shedding in South Africa,” according to the statement.
Although the market faced significant pressure, Oceana said it attracted more consumers by “maintaining affordability relative to competing proteins, building a resilient supply chain to meet growing consumer demand, and continuing with innovative marketing and brand investment.”
Capitalizing on the consumer craze for canned products, the company’s Lucky Star canned fish brand increased the number of cartons sold to 9.6 million in FY 2023, compared to last year’s 8.8 million cartons sold.
However, the canned segment’s operating margin reduced year over year as “higher selling prices were not sufficient to offset cost pressures, particularly energy, tin can and tomato paste costs, and the impact of the weaker rand to U.S. dollar exchange rate that affected the cost of imported frozen fish.”
Elsewhere, Oceana’s African fishmeal and fish oil sales volumes posted a 9.8 percent dip to 24,088 metric tons (MT) from the 26,691 MT posted in 2022, due to both harsh winter weather conditions and a subsequent reduction in redeye bass and anchovy landings.
Even though fishmeal and fish production declined, the segment’s revenues and operating profit benefited from “record fish oil pricing, firm fishmeal pricing, and the weaker rand against the U.S. dollar.”
The cancellation of Peru’s main anchovy fishing season due to the high presence of juveniles detected before the season began, Oceana’s statement says, adversely impacted the global fishmeal and fish oil industry, pushing up prices on raw products.
Weather patterns also impacted Oceana’s wild-caught seafood, with horse mackerel sales volumes declining 6 percent to 45,327 MT, down from 48,245 MT the year prior.
“In South Africa, catch rates were 32.4 percent lower due to the impact of the ongoing La Niña weather pattern on the East Coast and associated warmer sea temperatures extending into the 2023 season,” Oceana said.
Similar to fishmeal, though volumes declined, high demand for horse mackerel and U.S. dollar export pricing for the species remained firm, which together with the weaker rand resulted in sales prices increasing by 19 percent year over year.
Hake catch volumes were reduced by 34.8 percent due to a drop in days at sea and overall catch rates.
“The reduction in sea days was due to a combination of both planned and unplanned maintenance, which included the successful refrigeration freon conversion and production capacity upgrade to our flagship hake trawler: the Beatrice Marine,” Oceana said.
The company’s board also announced the extension of Brink’s tenure as CEO to 31 December 2026, saying it is confident his leadership “will provide the continuity necessary to execute on the group’s strategy and continue driving performance.” Brink took over as CEO in February 2022 after its previous CEO, Imraan Soomra, resigned amid the delayed publication of its year-end results after auditors raised concerns about certain aspects of its financial reporting. The initial audit was triggered by a whistleblower that alleged financial impropriety at the company.
That same event resulted in the company’s then-CFO Hajra Karrim being dismissed after a disciplinary procedure based on findings of gross misconduct.
Photo courtesy of Oceana Group
