2023 was a year characterised by a strong demand internationally for seafood, offset by challenging fishing conditions, persistent cost inflation and the continued impact of load shedding, according to Sea Harvest Group, as it made public its 2023 results.
The Group returned a strong set of results with revenue increased by 6% to R6.2 billion, whilst earnings before interest and tax (EBIT) was 15% ahead of the same period in 2022.
‘This result was pleasing considering the challenges the business faced with tough fishing conditions, loadshedding and persistent inflation on input costs The Group’s performance benefited from strong demand across all markets and channels,’ said Sea Harvest Group CEO Felix Ratheb.
‘Despite significantly lower volumes because of lower landings of hake and less availability of milk, revenue was up. This was driven by strong price increases, compounded internationally by a weaker Rand to the Euro and Australian Dollar. Nearly 50% of Sea Harvest’s sales are in foreign currency, making the Group a strong Rand hedge.’
Last year the Fishing Rights Application Process (FRAP) appeals in hake were completed on 4th October 2023, providing the company with visibility for the next 15 years. Despite 8% lower sales volumes due to the challenging fishing conditions, EBIT in the Group’s core South African Fishing business increased by 12%, driven by improved pricing in all markets and channels, a weaker Rand and good cost control.
During last year Sea Harvest also announced the proposed acquisition of 100% of Terrasan’s pelagic fishing business (Saldanha) and 63.07% of Terrasan’s abalone business (Aqunion), adding pelagics to the fishing portfolio and doubling the size of the abalone business. This transaction is subject to shareholder and regulatory approvals.
‘While local and international demand for our products remain firm, fishing conditions continue to challenge us. With FRAP concluded, it provides much needed certainty to our business and lays the platform for required investment. Harvest Cap Nord, a hake freezer trawler, as well as Isabella Marine, a hake wet fish trawler, were both acquired and commenced fishing in early 2024. Timing is good, as the TAC for hake has been increased by a further 5% for 2024,’ Felix Ratheb said.
‘Our abalone business turned to profit in 2023, and through the proposed merger with Aqunion in 2024, creates an abalone business of scale. The integration of MG Kailis in Australia has created a prawn and fish business of scale, and provided prawn prices recover, the business will continue to grow.’
He added that the constrained consumer, the impact of load shedding and infrastructure impediments continue to provide challenges.
‘We are completing our first solar PV installation at Ladismith to reduce the impact of loadshedding. This will be our third investment in sustainable infrastructure, following the wind farm in our abalone business and the investment in a de-salination plant in our fishing business to reduce the cost of water and electricity.’
