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Fishing group Sea Harvest said on Monday that strong demand for its products helped offset erratic weather, lower quotas and load shedding in its half-year to end-June.
Revenue rose 18% to R3.2 billion while attributable profit lifted 14% to almost R213 million, it said, and the company was also hit by a doubling in finance costs as rising interest rates, while load shedding cost it an estimated R22 million. Operating profit fell about 9% to R252 million, with its second biggest division, Cape Harvest Foods, hit by supply disruptions, load shedding, and a load shedding-related fire.
Valued at about R3 billion on the JSE, Sea Harvest employs about 5 200 people, operating some 57 vessels and 11 operational facilities in SA, Australia and Namibia. Along with fishing, the company owns two dairy operations in Ladismith and Bonnievale in the Western Cape, producing a variety of cheese, butter and powder products.
Sea Harvest Aquaculture operates five farms that grow abalone and oysters in SA and Namibia.
In 2022, the company was hit by a reduction to its fishing rights in terms of the government's Fishing Rights Allocation Process (FRAP), but the group said revenue in the SA fishing segment increased 10% to R1.57 billion, benefiting from strong demand in all markets and channels, higher selling prices, and a weaker rand.
The group did face cost pressures as well, however, including through diesel prices and packaging, with operating profit only rising 1%, with its margin slipping to 15% from 17%.
In Cape Harvest Foods, which includes its dairy interests, revenue rose 9% to R1.05 billion, but operating profit slumped 48% to R29 million, with the company adding that price increases to recapture rising input costs also hit volumes.
In March, however, the group acquired a further 28% of the shares in Viking Aquaculture, resulting in a gain on purchased loans of R93 million during the period, with its stake picking up from 54% to 82%.
"Strong demand for our products, both locally and internationally, resulting in higher selling prices in all markets and channels and the weaker rand against our basket of trading currencies mitigated the material cost inflation the group experienced compared to the same period last year," CEO Felix Ratheb said in a statement.
"We continue to recover from the FRAP volume losses, which was compounded by challenging fishing conditions, due to the erratic weather and lower catch rates in the first half of the year. The team did well to mitigate the lower volumes through higher selling prices and a higher value market mix, buoyed by strong demand and a weaker rand, and, with a relentless focus on cost containment, we achieved a pleasing 15% operating profit margin in a difficult environment."
