Fishing major delivers steady results in challenging times

Sea Harvest annouces results

SOUTH AFRICA: Despite challenges that include ongoing loadshedding, cost inflation and a global oversupply of prawns, the Sea Harvest Group is buoyed by the finalisation of long term fishing rights in the country and as announced a six percent increase in revenue for the year ending 31 December 2023.

Commenting on the results, Group CEO, Felix Ratheb notes that with the nearly 50 percent of the company’s sales destined for foreign markets, the strong price increases coupled by a weaker Rand has helped bolster results.

“This result was pleasing considering the challenges the business faced with tough fishing conditions, loadshedding and persistent inflation on input costs The Group’s performance benefited from strong demand across all markets and channels. Despite significantly lower volumes because of lower landings of hake and less availability of milk, revenue was up,” he says.

Group revenue increased by 6% to R6.2 billion, whilst earnings before interest and tax (EBIT) was 15% ahead of the same period in 2022, and headline earnings per share (HEPS) of 100 cents, 5% behind 2022.

The company’s involvement in the aquaculture sector saw their abalone business turned profitable as the farms matured. While the oyster business was sold, the Viking Aquaculture minorities were bought out, increasing the Group’s shareholding to 87%.

Sea Harvest also recently announced the proposed acquisition of 100% of Terrasan’s pelagic fishing business (Saldanha) and 63.07% of Terrasan’s abalone business (Aqunion). The transaction will add pelagics to the fishing portfolio and double the size of the abalone business, but is still subject to shareholder and regulatory approvals.

Looking forward, Ratheb says, “While local and international demand for our products remain firm, fishing conditions continue to challenge us. With FRAP concluded, it provides much needed certainty to our business and lays the platform for required investment. The Harvest Cap Nord, a hake freezer trawler, as well as the Isabella Marine, a hake wet fish trawler, were both acquired and commenced fishing in early 2024. Timing is good, as the Total Allowable Catch for hake has been increased by a further 5% for 2024.

Our abalone business turned to profit in 2023, and through the proposed merger with Aqunion in 2024, creates an abalone business of scale. The integration of MG Kailis in Australia has created a prawn and fish business of scale, and provided prawn prices recover, the business will continue to grow.