Oceana in choppy waters

Cape Town - SA’s biggest fishing group Oceana [JSE:OCE], which is controlled by Tiger Brands [JSE:TBS], endured some choppy trading conditions in the six months to end March.

According to results released on Thursday, Oceana had to rely on holding down its cost of sales to secure a 10% increase in operating profits (before abnormal items) to R192m.

While sales were down 6% to R1.5bn, Oceana’s management - led by recently appointed CEO Francois Kuttel – can take a bow for pushing up gross margins to 35% (last year: 28%).

Basic earnings came in 13% lower at 107c/share, but Oceana’s directors opted to push up the dividend by 6% to 33c/share.

The star performer for Oceana was its Midwater and Deep Sea fishing operations which managed a profit of R99m from turnover of R249m. The larger inshore operations generated R68m in profits from turnover of R1bn.

Kuttel said that overall profit from canned fish was above that of the same period last year with "good" pilchard landings and processing yields at the St Helena Bay cannery.

Oceana holds the Lucy Star brand.

He said canned fish sales volumes increased due to a more robust supply chain with imported product continuing to supplement local supplies. "Margins showed some improvement and Lucky Star’s market share recovered further as a result of higher sales."

But Kuttel noted that market conditions at Glenryck in the UK were "extremely difficult" with margins under pressure due to pound weakness and competitor activity.

Looking ahead, Oceana chairperson Mustaq Brey said fishing conditions in the southern African region were expected to remain reasonably stable. "Our South African, other African and Asian markets are anticipated to show growth whilst our European export markets have yet to recover to levels experienced before the global economic crisis."

- Fin24.com