Sea Harvest Group Proves its Resilient and Defensive Nature with its 2020 FYE Results

During one of the worst pandemics facing the world in recent times, resulting in significant disruptions to markets and supply chains, the Sea Harvest Group proved its resilient and defensive nature growing revenue by 10% to R4.4bn and headline earnings by 3% to R421m for the year ended 31 December 2020, whilst earnings per share (EPS) increased 3% to 154.3 cents per share.
According to Sea Harvest Group CEO, Felix Ratheb, this strong performance was driven by the Group’s fishing operations in South Africa and Australia.

“Our fishing business is very well diversified in terms of markets, supplying a variety of products to 36 countries across the globe. Within these markets, the Group has a strong mix of retail and HORECA (Hotels, Restaurants and Catering) customers. What we managed to do very effectively is divert products to retail markets where demand was firm. This flexibility was a significant strength in these difficult times where out-of-home consumption was severely affected with various lockdowns,” explains Ratheb. He adds that, “Challenges were experienced in the Aquaculture segment, which was drastically affected by COVID-19. The Group’s inability to access markets in the Far East due to lockdowns and curfews in the region, as well as the curtailment of air freight from South Africa, resulted in a significant loss in that business.”

According to Ratheb, this performance in the fishing business would not have been possible without government intervention. “The Department of Environment, Forestry and Fisheries (DEFF) was very supportive of the industry and ensured that fishing operations were deemed an ‘essential service’ and granted various exemptions, which allowed the seamless continuity of operations and hence food security during a very difficult time. The various labour unions, in particular the Food and Allied Workers Union (FAWU), worked very closely with the industry and the department to implement work health protocols that were world class. As a result, not a single job was shed in the industry due to the pandemic,” declares Ratheb.

Despite supply chain disruptions, including lower throughput and lower levels of productivity, higher selling and distribution costs, a shift in market mix, and R39 million in COVID-19 related direct costs, the Group increased operating profit 5% to R629 million.

Another massive positive for the sector has been the re-certification of the hake fishery until 2026 by the Marine Stewardship Council (MSC). The MSC is the global “gold” standard for the sustainability of fish stocks, indicating the hake resource in South Africa is well managed and providing access to key international markets. Ratheb asserts that, “This would not have been possible without the strong collaboration between the scientific community, the department (DEFF) and the industry.”

Meanwhile, staying true to its commitment to transformation, the Group retained its Level 1 broad-based black economic empowerment (B-BBEE) contributor status and spent R1.1 billion with 222 majority black-owned suppliers, while R463 million was spent on 642 small, medium and micro enterprises (SMMEs).

Sea Harvest Group Board Chairman, Fred Robertson, says that the priorities of the Group shifted drastically in 2020. “Our main priority was the safety and health of our employees. Never did we envisage spending weekends calling around to find hospital beds and oxygen for our employees. Added to this were the devastating consequences of the pandemic in our communities. Sea Harvest operates in remote towns that are economically distressed.

COVID-19 brought further hardship in the form of increased unemployment and food shortages. Our employees volunteered to pack food parcels to ensure our communities were fed and survived this pandemic. It makes me incredibly proud to see how we came together as a Company, Community and Nation in the face of this pandemic. I salute our healthcare workers who were in the frontline and would like to pay special tribute to the five employees, including founder of Viking Fishing, Nico Bacon, who lost their lives to COVID-19.”

The Group has declared a full and final cash dividend of 45 cents per ordinary share, in respect of the year ended 31 December 2020, in line with the prior year.