Lucky Star canned fish producers Oceana Group Limited has deferred their 2020 interim dividend payment, pending a possible review in the coming months.

According to the company, the decision to defer their 152 dividend payments was prudent to preserve cash in light of the uncertainty posed by Covid-19 and its effect on macro-economic conditions.

The last dividend was paid out in December last year at N$2,40 per share.

Oceana is incorporated in South Africa, but has operations in Namibia and the United States. Core businesses include procuring, processing, marketing and distribution of canned fish, fishmeal, fish oil and catching horse mackerel, hake, lobster and squid.

Other operations include both deep-sea and midwater trawling, refrigerated warehousing and logistical support services.

Interim group revenue increased by 2% to N$3,6 billion at 31 March 2020, which the company attributed to increased African operations revenue, increased cold storage occupancy levels and a favourable impact of the weaker rand on export revenues.

Group operating profit, on the other hand, increased by 9% to N$605 million, when compared to N$554 million earned the previous year.

The company said this was driven by growth of 18% in African operations, offset by a reduction in the USA, where their Daybrook subsidiary operating profit shrank by 23%.

Most of the profit was from African operations, the company said, at N$466 million or 77%.

Taxation expense at interim stood at N$153 million.

The company's products are sold in 46 countries across the world and are all essentials, rendering the impact of Covid-19 not that severe.

"What has been critical in the Covid-19 environment is that our products are primarily consumed in-home, which has protected us from closures in the tourism and hospitality industries," says chief executive officer Imraan Soomra.

He says the company's pricing, affordability and accessibility strategy for Lucky Star canned fish has paid off.

"We have price points that are really attractive to cash-constrained consumers. Strong availability has also been critical to servicing demand, with six months of inventory available as at the half year," he says.

Looking forward, Soomra says the weakening rand would have a positive impact on results, given that Oceana was a net exporter in the second half of the financial year, but cautioned possible minimal interruptions.

"All our operations were classified as essential service providers and continued to operate during the Covid-19 lockdown. As the infection rate in South Africa increases, our operations may be interrupted to some extent, with the risk greatest in our mid-water vessel operations," he says.

Soomra says the company does not foresee the risk of a large-scale impact in the immediate future.

In respect of long-term fishing rights, he says in South Africa, cabinet had approved the extension of fishing rights to December 2021 with exemptions granted to existing rights holders to continue fishing based on current allocations, while in Namibia the fishing rights of partners have been extended for a further seven years.

"It is worth pointing out that, given the diverse nature of the business, only 16% of Oceana's fish supply is up for renewal in 2021," he says.

The chief executive officer says post-Covid-19, there would be a great need for collaboration between the government and industry.

The company is listed on both the Johannesburg Stock Exchange and the Namibian Stock Exchange.

Shares were trading at N$66,24 per share on Friday.

Copyright The Namibian. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English