South Africa-based Sea Harvest Group defied the impacts of the COVID-19 pandemic to grow its revenues during the financial year ending 31 December, mainly on the strength of its flexible operational strategies.
The company’s revenue surged 10 percent to ZAR 4.4 billion (USD 292.9 million, EUR 243.16 million), while headline earnings rose 3 percent to ZAR 421 million (USD 28 million, EUR 23.2 million) and earnings per share increased 3 percent to ZAR 1.54 (USD 0.10, EUR 0.08).
Sea Harvest CEO Felix Ratheb said the group’s positive performance was driven by the company’s ability to diversify its offerings and shift its foodservice products to retail.
“Our fishing business is very well-diversified in terms of markets, supplying a variety of products to 36 countries across the globe,” Ratheb said. “Within these markets, the group has a strong mix of retail and HoReCa (hotels, restaurants, and catering) customers. What we managed to do very effectively is divert products to retail markets where demand was firm.”
The group also managed to deliver an operating profit of ZAR 639 million (USD 41 million, EUR 34.8 million), a five percent increase over the previous year.
Despite those successes, Sea Harvest reports a tough operating environment for the aquaculture sector attributed to COVID-19, especially after the company was shut out of the Far East markets, “due to lockdowns and curfews in the region, as well as the curtailment of air freight from South Africa.”
Those difficulties led to a 23 percent decrease in revenue in the segment, dropping to ZAR 53 million (USD 3.4 million, EUR 2.8 million) and resulting in an operating loss of ZAR 73 million (USD 4.7 million, EUR 3.9 million).
Maneuvering the challenges posed by COVID-19 to post a profit for the company took the involvement of the South African government, which approved listing fishing operations as essential services, out of the purview of lockdown regulations.
“The Department of Environment, Forestry, and Fisheries was very supportive of the industry and ensured that fishing operations were deemed an ‘essential service’ and granted various exemptions, which allowed the seamless continuity of operations and hence food security during a very difficult time,” Ratheb said.
Furthermore, South Africa’s labor unions partnered with seafood enterprises in the country to “implement work health protocols that were world class that ensured not a single job was shed in the industry during the pandemic.”
The recent recertification of the hake fishery until 2026 by the Marine Stewardship Council (MSC) has also been massive positive for the sector as the standard provides access to lucrative global seafood markets.
“This would not have been possible without the strong collaboration between the scientific community, the department and the industry,” Ratheb said.
Looking into the future, Sea Harvest said it is difficult to predict how COVID-19 will continue impacting seafood markets although many of them are settling in since the first outbreak in 2019 as countries learn how to live with the pandemic.
“The situation is fluid as various markets re-establish different lockdowns on the back of second or third COVID-19 outbreaks, or indeed, lift lockdowns on the back of recoveries while the efficacy of vaccines and the impact on markets, particularly foodservice markets, could take a while to filter through,” Sea Harvest said in a statement.
The company predicts strong showings in the retail market, with a ramp-up of the foodservice markets likely to happen in the long term.
Photo courtesy of Sea Harvest Group
