Fishing group Oceana in a voluntary trading update reported a significant decline in financial performance for the five months ended February 23, compared to the record results of the previous period. The downturn was largely due to normalised global pricing for fishmeal and fish oil following Peru’s production recovery, impacting its US and African segments.
"Lucky Star Foods delivered pleasing results, driven by steady consumer demand and supported by increased local production volumes and improved efficiencies following the successful cannery upgrades implemented in the prior period," Oceana stated. The brand saw a 5% rise in sales volumes, fuelled by demand for affordable protein and strategic expansion, though margins were tempered by higher inventory costs.
In its Wild Caught Seafood division, Oceana noted improvement in the second quarter after a slow start. "Global demand for sustainable wild caught species remains strong, with pricing reflecting this trend," the company said. The hake business benefited from a 5% increase in total allowable catch and better catch rates, while the Desert Diamond vessel in Namibia showed progress despite earlier setbacks.
Fishmeal and fish oil production in Africa doubled, thanks to facility upgrades and higher red-eye herring landings. "The recent upgrades are yielding good benefits through notable reductions in power and coal usage, as well as improvements in product quality," Oceana reported. However, lower fishmeal and fish oil prices offset these gains, with inventory levels surging 119% higher than the prior period.
In the US, Daybrook’s performance weakened due to a drop in fish oil prices from a prior high of $5 000 (R90 000) per ton and 17% lower sales volumes, leaving inventory 43% higher. The fishing season, limited to one month in the period, resumes in mid-April.
The company’s interim results are slated for release on June 9.
Meanwhile, Oceana said it is set to repurchase and cancel shares held by the Oceana Stakeholder Empowerment Trust, established in 2021 as part of its broad-based black economic empowerment initiative, following a resolution by the Trust’s trustees to commence provisional sequestration.
The Trust, holding just 0.5% of Oceana’s issued share capital, has failed to generate significant value, rendering its administration disproportionately costly, the company said. The Trust’s wind-up triggers a clause allowing Oceana to buy back its 0.5% stake- equating to 652159 shares - for R0.01 each.
BUSINESS REPORT