CAPE TOWN’s two premier hake fishing enterprises, Sea Harvest and I&J, once again produced pleasingly stout results to end December.
I&J’s mainstay hake operation kept profits at R153 million for the half year to end December. Revenue – which included the loss-making abalone segment – inched up 4.5% to R1.24 billion thanks mainly to sales benefitting from a weaker Rand on exports.
Parent company AVI said I&J’s fishing performance was in line with last year with higher catch rates largely offset by lower sea days.
Hake tons per sea day increased to 9.8 tons compared with 8.9 tons in the previous interim period. The improvement was largely due to higher wet vessel catch rates.
AVI also reported that hake demand and selling prices held up in a challenging trading environment with lower demand across retail and food service customers. But export revenue growth was 6.3% for the period.
AVI disclosed that I&J market share decreased from 54,2% to 49,3% due to “targeted value realisation” in a volatile market.
The performance of I&J in the second half of this financial year is expected to be materially better than the second half in 2020 with a less pronounced impact from Covid-19 predicted.
Sea Harvest also produced strong results in the year to end December with local fishing revenue up 12% to R2.8 billion and operating profits 21% higher at R570 million.
CEO Felix Ratheb said a solid set of results was achieved despite challenges on both the market and the supply chain sides of the business.
He said revenue benefitted from favourable exchange rates and increased in-home consumption in both local and international retail markets. These, he said, were offset by a lower-value product mix and a slowdown in both local and international foodservice markets as a result of various lockdown levels being implemented across the globe. Ratheb said this was compounded by populations not yet fully comfortable with dining out after the Covid-19 lockdowns.
He said the jump in operating profit was helped by stringent cost containment and a lower fuel price with gross margins fattening to 42% (2019: 39%).
Ratheb noted that on the back of firm retail markets, export revenue increased 15%, while the combined export mix has improved to 54% (2019: 53%) of total revenue. Europe remained Sea Harvest’s largest export market.
Locally, Ratheb said revenue through the retail channel increased 36%, driven by increased in-home consumption. The retail channel mix increasing to 13% (2019: 10%) of total sales.
Affected by the lockdowns, revenue in the local foodservice decreased by 2%, while the wholesale segment remained resilient and increased revenue by 25%.
Premier’s mystery deal
PREMIER Fishing & Brands looks set to make some waves before the FRAP (fishing rights allocation process) has been finalised.
In a note to shareholders PremFish advised it was in negotiations with an unnamed party to sell an undisclosed subsidiary.
The move is most surprising with most deal making activity in the fishing sector on hold until the delayed FRAP is finalised at the end of this year.
Speculation is that PremFish may wish to sell any or all of its pelagic, lobster and squid interests.
The squid operations – held under Eastern Cape-based Talhado – and the south coast lobster operations have been good performers for PremFish in recent years.
Such a sell off would leave the group concentrating on its large abalone farming venture near Gansbaai. Aquaculture is not subject to FRAP.
PremFish has advised shareholders it was mulling a broad based black economic transaction.
