Higher fish oil sales support Oceana’s Daybrook

Fishing group Oceana says it performed well for the 11 months to August 25 as its US operation Daybrook benefited from higher fish oil sales volumes and record dollar prices.

Oceana said in a voluntary trading update on Monday that Daybrook continued building on the strong first half while consistent demand for affordable protein underpinned Lucky Star’s performance.

However, the group’s results for the period were tempered by the disappointing performance of both the SA and Namibian horse mackerel businesses in the wild caught seafood segment, it said.

Lucky Star sales volumes declined 2% in the 11 months to August 25 due to record volumes sold in the comparative period.

After the decision in the first half to close both west coast plants earlier than usual to implement factory upgrades, production volumes declined by 26%. The plants returned to full production in the second half, with enhanced efficiencies and improved margins resulting from higher volumes of locally landed fresh pilchards.

Africa fishmeal and fish oil sales volumes decreased by 16% due to lower opening inventory levels and lower volumes produced in the period. Raw material available for production in the period declined due to the combined effect of reduced pilchard trimmings from the cannery and lower anchovy landings, which were affected by prolonged adverse winter weather conditions.

Improved oil yields, strong dollar fish oil prices and the weaker rand exchange rate partly offset the impact of lower sales volumes.

Oceana said the recent plant upgrades have yielded benefits through increased efficiency and enhanced product quality.

Daybrook’s performance benefited from higher fish oil sales volumes and record dollar prices, together with the effect of a 4% weaker rand on translation.

As expected, global fish oil prices started decreasing during the period driven by supply and demand stabilisation with improved production levels in Peru.

Unseasonal windy conditions for the first half of the season contributed to Gulf menhaden landings being 26% lower than the comparative 21-week period.

Fishing operations were suspended during week 22 due to adverse weather conditions in the Gulf caused by Hurricane Francine. Fortunately, no damage was reported to the factory or Westbank’s fishing fleet, Oceana said.

In the wild caught seafood unit, hake sale volumes increased by 31% with improved seadays and catch rates resulting in a better fleet performance. Strong European demand underpinned firm pricing.

The Desert Diamond resumed fishing in early August, having been unable to fish for most of the 11 months due to a major mechanical failure. Consequently, horse mackerel sales volumes in SA were 84% lower and operating performance declined significantly.

A combination of lower sales volumes, resulting from decreased catch rates and weaker market prices had a negative effect on horse mackerel performance in Namibia.

Good squid catches led to increased sales volumes, but lower sales prices offset the benefits, resulting in a reasonable performance that was consistent with the prior period.

Oceana said it would release annual results on November 25.

mackenziej@arena.africa