Fishing group Sea Harvest said on Monday that earnings increased, boosted by strong demand, higher selling prices in all markets and channels, and a weaker rand.
In its interim results for the six months ended June 30, 2023, the group said it proved its resilience and defensive nature by delivering headline earnings of 77 cents, 19% higher than in 2002.
The group reported that revenue increased by 18% to R3.2 billion compared to 2022’s R2.7bn, benefiting from strong demand, higher selling prices in all markets and channels, and a weaker rand, thereby mitigating the significant inflation, including the double-digit increases in the fuel price and milk price, and continued load shedding experienced during the period.
Despite this, no interim dividend was declared.
Sea Harvest CEO Felix Ratheb said despite lower hake catch volumes, revenue from the South African Fishing segment increased 10% to R1.57bn (2022: R1.42bn), benefiting from strong demand in all markets and channels, higher selling prices, and a weaker rand against the major trading currencies.
“Revenue from the Aquaculture segment increased 11% to R62 million, compared to the previous comparable which was R56m, with higher selling prices as a result of a recovering Asian market and the tailwinds of a weaker rand offset by lower available volumes due to the farms still being in their growth phase,” the group said.
Sea Harvest said its Cape Harvest Foods segment was negatively affected by supply constraints during the period.
“Lower countrywide milk flow, as farmers face significant cost inflation, load shedding, and a load shedding-related fire at Ladysmith, which caused a one-month disruption at the facility, curtailed available volumes.”
“Despite these challenges and a constrained local consumer, revenue in the segment increased 9% to R1.05bn, benefiting from higher selling prices across all categories,” it said.
The group said this segment was particularly hard hit by load shedding and incurred costs of R15m, compared to 2022’s R2m, in mitigating its effects during the period.
Solutions to load shedding at its various operating sites in South Africa were being investigated.
The Australian segment delivered a 94% increase in revenue to R524m, benefiting from the inclusion of MG Kailis for the full period and a weaker rand – a strong sales performance in the period considering prawn fishing only started in April 2023, and sales are weighted towards the second half of the year.
The group acquired Australian group MG Kailis in a A$70m deal in January.
Looking ahead, the group said challenging fishing conditions due to the erratic weather continue to impact catch volumes in the South African Fishing segment.
“However, markets internationally and locally are firm, with the rand weaker against major trading currencies and the book well hedged against both the euro and the Australian dollar.”
It said its management continues to focus on fixed cost containment to offset a higher fuel price and lower catch volumes.
“With the continued increase in the abalone size mix, the continued recovery of Far East markets, and the resumption of international flights from mid-Q3 2023, the Aquaculture segment is well poised to continue its recovery in the 2023 financial year,” it said.