Oceana caught by bad weather
Headline earnings per share fell by a quarter in the year to end-September, with the fishing group having benefited from lower US tax rates in the prior period
Oceana Group, which produces canned pilchards under the Lucky Star label, said on Thursday bad weather in the US and SA had weighed on fish meal production during its year to the end of September.
Group revenue was flat at R7.64bn for the period, with headline earnings per share falling 25.1% to 554.1c, as the prior financial year had included a one-off release of R238m in deferred taxation due to the lowering of corporate tax rates in the US.
Historically high rainfall in the US before the start of the fishing season resulted in water levels in its traditional fishing grounds being substantially higher than normal, the company said. Extended winter weather patterns also affected landings of industrial fish in SA.
The group cut its final dividend 21% to 240c, bringing its total dividend for the period to 363c, from 416c previously.
The company said it would be focusing on improved fleet and land-based facility utilisation, and would be commencing fishing in the US on weekends, where it also expects to add an additional vessel to its fleet.
The company was pleased by the performance of its canned fish division during the period, Oceana Group CEO Imraan Soomra said. The company had been pursuing a strategy of ensuring those products were affordable, as well as available, despite a local shortage of fish.
“The canned fish business — Lucky Star — had a standout year and delivered exceptional results, with a double-digit revenue growth of 12%, due to good volume growth in a tough trading environment,” Soomra said.
“We also increased efficiencies and throughput, which unlocked cost savings of approximately R45m,” he said.
The company’s share price has fallen 15.05% so far in 2019, having fallen to a near seven-year low in November.