The Namibia Stock Exchange-listed Oceana Group has reported an increase in operating profit for the 11 months ended 31 August. This improvement was driven by stronger performances from its Lucky Star Foods, fishmeal and fish oil in the United States, and wild-caught seafood segments. Despite challenges in the fishmeal and fish oil business in Africa, the company's overall operating profit rose.
Oceana's group revenue remained in line with the prior period. However, total sales volumes declined by 5%, mainly due to a 9% decrease in canned fish volumes. This decline was partly offset by stronger canned meat sales. The company's local canning production volumes fell by 60% as a result of raw material shortages, increasing per-unit production costs.
The fishmeal and fish oil Africa segment experienced significant challenges, with production volumes falling by 73% and sales volumes declining by 72%. This was due to lower industrial fish landings and reduced pilchard trimmings following lower cannery production. Despite average fishmeal and fish oil prices increasing by 31% in Rand terms, the segment's operating loss increased.
In contrast, Oceana's US fishmeal and fish oil business, Daybrook, delivered a stronger performance. Sales volumes increased by 16%, while average fish oil prices rose by 24% in the 11-month period. Average fishmeal prices in US dollar terms were largely unchanged, contributing to the improved performance.
The wild-caught seafood segment also showed improvement, driven mainly by a recovery in horse mackerel. Hake operations benefited from improved landings, increased days at sea, and higher catch rates, while sales volumes rose by 5%. Horse mackerel sales volumes increased by 8%, supported by improved catch rates and firm market pricing.
However, not all segments performed well. The squid business recorded an operating loss due to persistently weak catch rates across the industry. Lucky Star Foods recorded mixed results, with a strong first half followed by weaker performance in the second half to August. Shortages of frozen fish raw material constrained canned pilchard availability and slowed sales.
Oceana's operating margins benefited from higher net realised sales values, lower freight and inventory holding costs, an improved sales mix, and increased volumes of locally caught pilchards. The company said its results for the year ended 30 September would be released later.
Key points
- Oceana's operating profit increased despite challenges in the fishmeal and fish oil business in Africa.
- The company's US fishmeal and fish oil business, Daybrook, delivered a stronger performance with increased sales volumes and improved pricing.
- Wild-caught seafood segment improved, driven by a recovery in horse mackerel and hake operations.
