Oceana : lands a bounty for shareholders

• Revenue from continuing operations up 12% and from total operations up 11%.
• Operating profit (before other operating items) from continuing operations up 11% and from total operations up 6%.
• Headline earnings per share from continuing operations up 17% and from total operations up 10%
• Total dividend down 3% to 346 cents per share

The Oceana Group has delivered excellent operating results for the 2022 financial year thanks to continued, healthy demand, resultant price improvements for most of its products and a strong second-half performance.

Fishmeal and fish oil prices were particularly favourable, and the canned fish business recovered well in the second half when supply normalised following the global supply chain disruptions and civil unrest experienced in 2021.

Much-improved fishing conditions in the United States ensured good Gulf Menhaden landings by Westbank Fishing, enabling Daybrook to deliver record second-half earnings, which contributed to the Group's robust performance.

"Fish, particularly canned fish, is an affordable, healthy source of protein for many South African families as the Kasi Brands survey confirmed when it found Lucky Star tinned fish to be the top township brand. The demand was always there, and the second-half sales volumes improved when we were able to replenish our stocks. This as well as global demand for fishmeal and fish oil and the Daybrook performance contributed to a set of results we're very pleased with, particularly given the constrained global and local economies," says Oceana CEO, Neville Brink.

Group revenue from continuing operations grew by 12% to R8 148 million (2021: R7 296 million) as a result of positive pricing, higher fishmeal and fish oil sales and the benefit of a weaker exchange rate on export and US-dollar translated revenue. This also saw the gross margin from continued operations increase to 30.8% (2021: 30.0%).

Revenue from total operations increased by 11% to R8 438 million (2021: R7 633 million). This includes Commercial Cold Storage, which has been treated as a discontinued operation as the Group is in the process of selling it for R760 million.

Group operating profit, before other operating items, from continuing operations increased by 11% to R1 250 million (2021: R1 128 million). Total Group operating profit, before other operating items increased by 6% to R1 256 million (2021: R1 183 million).

Other income includes insurance proceeds of R87 million relating to prior year claims resulting from Hurricane Ida in the United States (R63 million) and the civil unrest in KwaZulu-Natal (R14 million).

Headline earnings from continuing operations increased by 20% to R760 million and headline earnings per share improved 17% to 626.0 cents per share (2021: 536.2 cents per share). Headline earnings from total operations were up 13% to R736 million (2021: R652 million) and headline earnings per share improved 10% to 606.2 cents per share (2021: 550.0 cents per share).

Cash generated from operations decreased by 33% to R990 million (2021: R1 484 million). This was mainly to increase inventory levels to ensure continuity of supply to meet canned fish and fishmeal demand.

The board declared a final dividend of 291 cents (2021: 248 cents) per share, which together with the interim dividend bring the total dividend for the year to 346 cents (2021: 358 cents) per share.

Brink says while the second half is usually stronger, the Group is well placed for the first half of 2023 with higher inventory levels of canned fish and fishmeal available to service strong market demand. A weaker rand will support the export and dollar-denominated businesses.

"While cost pressures remain a concern, the business is generally in good shape and there is sustained and growing demand for our products. We know how reliant many consumers are on Lucky Star and will be driving efficiencies and cost improvements to maintain its relative affordability. We will also be looking to expand the brand into new canned food categories."