Oceana CEO Francois Kuttel. Picture: FINANCIAL MAIL
Oceana CEO Francois Kuttel. Picture: FINANCIAL MAIL

Oceana's share price fell as much as 17% to R70.80 on Friday as the market reacted to its interim results released after the JSE closed on Thursday.

The producer of Lucky Star canned pilchards said it was forgoing a final dividend for its 2017 financial year to focus on reducing debt.

Oceana paid a R3.57 final dividend in 2016. Its investors received an interim dividend of 90c for the first half of the 2017 financial year, down from R1.12 in the matching period in 2016.

Revenue for the year to end-September declined 17% to R6.8bn, which Oceana blamed on a stronger rand. The rand averaged R13.37/$ in its 2017 financial year versus R14.79/$ in its 2016 financial year.

The drop in revenue was also due to the number of cartons of canned fish sold dropping by 16% to 7.9-million from 9.4-million.

Oceana said the amount of pilchards it was permitted to catch was cut by 30% to 45,560 tonnes from 64,928 tonnes.

The amount of anchovies it was permitted to catch, however, was increased by 27% to 450,000 tonnes from 354,326 tonnes, the highest in 30 years.

"A difficult catching environment in the second half of the year resulted in an increased reliance on frozen fish imports to meet canned production demand. This ensured improved utilisation of local production capacity and the continuity of supply of Lucky Star product," CEO Francois Kuttel said in the results statement.

The group bet the wrong way on foreign exchange contracts taken to pay for frozen fish imports, resulting in a loss of R61m from a gain of R73m in the prior year. This contributed to its after-tax profit halving to R479m.

Oceana’s US subsidiary, Daybrook, posted a 36% decline in operating profit to $29m. Measured in rand, the drop was 42% to R390m.

"In the context of this year’s performance relative to the level of gearing in the group, the board considers it prudent to conserve cash and forgo the payment of a final dividend. It is anticipated that the group will resume dividend payments in 2018," the results statement said.

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