Sea Harvest Group Delivers Sound Performance in H1 2021 and Secures Another Acquisition
The Sea Harvest Group continues to demonstrate its resilient and defensive nature with a consecutive set of stable interim results amid the current COVID-19 global crisis. The Group has delivered headline earnings of R202 million for the period ended 30 June 2021, 19% ahead of 2020, while earnings per share increased 27% to 77.7 cents per share. Group revenue for the period increased 5% to R2.1 billion.
The Group’s results were driven by consistent performances from its South African fishing segment, the Cape Harvest Food Group segment (which includes Ladismith Cheese), and its Australian operations. The Aquaculture segment, while showing an improving revenue trend and more than doubling revenue, remains severely impacted by the effects of COVID-19 on global markets.
Sea Harvest Group Chief Executive Officer, Felix Ratheb, states that “We are pleased with our performance, considering we faced headwinds in the form of a 5% reduction in the total allowable catch in 2021, a stronger Rand, additional COVID-19 related costs, and operating pressures in our Aquaculture segment. However, we benefitted from good fishing conditions, firm export, and local retail markets, and a sound hedging strategy, delivering an operating profit of R323 million for the period, 26% higher than the prior period, with the operating profit margin expanding to 15%.”
Ratheb adds that during the period under review, the Group stayed its course. “We have remained true to our corporate anchors, which include driving transformation and acting responsibly with Sea Harvest Group retaining its Level 1 broad-based black economic empowerment (B-BBEE) contributor status. The Sea Harvest Foundation continued its good work on community-based projects in all the areas in which the Group operates. Together with our majority shareholder, Brimstone, we have also maintained our sponsorship of the South African Fisheries Development Fund to empower small-scale businesses in the fishing and allied sectors.”
Ratheb explains that the robust processes implemented since the first phase of the COVID-19 pandemic have ensured that the Group has been able to continue operating smoothly. “To ensure that the Group continued to provide a safe working environment at our sea-based and land-based operations, the Group incurred net COVID-19 related costs of R16 million in the provision of personal protective equipment, transport, screening, and testing,” says Ratheb.
Looking ahead to H2 2021, Ratheb expects the Group’s performance to continue its strong trajectory, boosted by the acquisition of 100% of the issued capital of Mooivallei Suiwel Proprietary Limited (“Mooivallei”) by Sea Harvest Group’s wholly-owned subsidiary, Ladismith Cheese, which is effective 2 August 2021. This acquisition will add significant cheese production capacity to the Group. Ratheb concludes, “We are anxiously looking forward to the conclusion of the fishing rights allocation process (FRAP) 2020/21. According to the guidelines gazetted, the process should culminate in December 2021, and we are confident about the future, as we have shown our commitment to working with the government in achieving its National Development Plan 2030 priorities and meeting its expectations for the benefit of our country, communities and all our stakeholders.”
Sea Harvest Group Board Chairman, Fred Robertson, states, “The Board is pleased with the positive financial results that the Sea Harvest Group continues to deliver. We are particularly proud that Sea Harvest has earned the South African government’s confidence with the Group’s Saldanha Bay operation becoming a pilot Vaccination Centre for the Agriculture/ Fishing sectors resulting in the first vaccines being administered on 23 July 2021. This initiative demonstrates the Group’s commitment to working with the government to achieve the desired objective of health and wealth for everyone.”
