Oceana expects almost 20% increase in full-year headline earnings

Fishing group Oceana expects to report higher full-year headline earnings per share (HEPS) after its strong first-half performance.

HEPS for the year to end-September was expected to be between 900c and 935c — an increase of 15%-19% from a year ago, it said in a voluntary trading update on Thursday.

Earnings per share (EPS) were expected in a range of 896c-946c, representing a decrease of between 14% and 18% from the prior year. This was mainly due to the non-recurring effect of the previous year’s profit on the disposal of Commercial Cold Storage Logistics Group (CCS), it said.

The profit on disposal of CCS directly translated to an increase in EPS of 314.4c in the comparative period, but had no effect on HEPS in the previous year.

Oceana will release its results on November 25.

In an update in September, Oceana said it had 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.

Daybrook continued building on the strong first half while consistent demand for affordable protein underpinned Lucky Star’s performance.

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

Oceana said the recent plant upgrades had 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.

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.

mackenziej@arena.africa