Oceana records strong increase in profits
2016-11-21 15:35:48   copyfrom:    hits:

Seafood canning factory (Photo: Oceana Group)SOUTH AFRICASaturday, November 19, 2016,02:10 (GMT + 9)Oceana Group Li
 

Seafood canning factory. (Photo: Oceana Group)

 

Click on the flag for more information about South AfricaSOUTH AFRICA 
Saturday, November 19, 2016, 02:10 (GMT + 9)

 

Oceana Group Limited managed to achieve 69 per cent growth in operating profit in the fiscal year ended on September 30, to ZAR 1.7 billion (USD 118 million) thanks to the acquisition of Daybrook and 24 per cent growth in African operations.

Referring to the results obtained by the group, its CEO Francois Kuttel said: “This positive growth was driven by the inclusion of Daybrook and Amawandle (Foodcorp) assets for a full period, supported by 13 per cent revenue growth in our African operations as a result of strong volumes in canned fish, fishmeal and hake, higher occupancy levels in the CCS business, and favourable pricing in most markets.”

The Lucky Star canned fish and fishmeal division contributed 52 per cent to group revenue despite adverse fishing conditions and reduced quota allocation in South Africa and Namibia.

The company’s strategy to increase importation of frozen rather than canned pilchards, and to double production in its canneries in South Africa and Namibia, resulted in reduced foreign currency exposure and had a positive impact on overhead recoveries.

“Importantly,” said Kuttel, “maximising local production capacity and investing in facility and process improvements resulted in enhanced efficiencies and had significant positive knock-on effects, providing 214 additional jobs.”

The industrial fishmeal business recorded a 19 per cent increase in landings of anchovy and redeye herring in South Africa, with a further 13,000 tons landed and processed in the newly‑commissioned fishmeal plant in Angola through the Oceana Boa Pesca joint venture.

According to the firm’s representatives, this resulted in a significant increase in sales volumes of fishmeal and fish oil. However, they recognise that pricing has been impacted by Peruvian quota announcements but positively offset by a favourable exchange rate.

The Group also informed that Daybrook’s improved operational efficiencies made up for the softening in fishmeal prices following reasonable landings in its first 2016 Peruvian fishing season, and slightly slower than expected volume uptake in China.

Horse mackerel prices faced continuing pressure due to oversupply and tough trading conditions in traditional African markets, although the favourable exchange rate partially offset weaker dollar prices.

The company’s board highlighted that despite weaker markets, margins in Namibia improved following the sale of excess fishing capacity, consistent catch rates, and the termination of experimental fishing efforts in Angola.

Hake profitability improved significantly as a result of increased volumes following the Amawandle (Foodcorp) acquisition, firmer Euro prices combined with a favourable exchange rate, and lower fuel prices.

However, the west coast rock lobster business showed a decline in profitability, following lower catch rates experienced by the industry and a lower live mix due to poorer fish quality, both of which negated a favourable exchange rate.

The squid business reported a second consecutive year of positive results, following good landings, a weaker exchange rate, and a reduced fixed-cost structure. The fishing resource remains stable.

CCS Logistics continued to deliver revenue growth and doubled its profits this year.

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