Sea Harvest Group reports that its interim results softened for the first six months of 2022, driven by losses in hake volumes from the recently concluded Fishing Rights Allocation Process (FRAP) and a material increase in the fuel price.
‘We confronted tough macro-environmental factors driven by significant input cost pressures and supply chain disruptions. The South African Fishing operation, the bedrock of the Group, had to contend with a c.10% decrease in available hake quota volumes due to losses associated with the FRAP and a reduction in the TAC, compounded by significantly higher fuel prices and a stronger exchange Rand, resulting in 25% lower operating profit for the period,’ said CEO Felix Ratheb, commenting that the group has been through a challenging six months to the end of June this year.
In spite of this, the Group delivered earnings before interest and tax (EBIT) of R287 million and headline earnings per share of 65 cents, 10% behind 2021 respectively, an acceptable outcome in the circumstances.
‘Although we were disappointed with the outcome, considering that Sea Harvest was one of the top performing companies in all sectors it applied for, the result lays a good foundation for certainty and stability to the Group for the next 15 years,’ Felix Ratheb said, commenting on the recently concluded FRAP.
Tough trading conditions aside, the Group completed the acquisition of MG Kailis’ fishing business on 23rd May 2022.
‘The acquisition of MG Kailis’ fishing business is transformative, representing a significant step in the execution of the Group’s investment strategy of acquisitive growth in the international seafood space, which focuses on businesses of scale in high-value seafood species,’ he said.
‘It complements and diversifies our existing business operations in Australia. The Australian subsidiary performed well, with revenue up 17% for the period. Pleasingly, our other operations continue to deliver. The Cape Harvest Foods segment increased 85% to R956 million as a result of the increased capacity at Ladismith Cheese, combined with the Mooivallei and BM Foods acquisitions.’
