| Imagery Source: Oceana Group Limited |
| Information Source: JSE SENS |
| Oceana Group Limited |
| GROUP OVERVIEW |
| An improved performance in the South African (SA) businesses partially offset the decline in the Group’s profitability for the period. Lucky Star Foods delivered strong results, supported by steady consumer demand, increased local production volumes, and greater operational efficiencies following recent capital investment. Improved landings and plant performance contributed to better results in the Fishmeal and fish oil (Africa) segment, while the Wild caught seafood segment benefited from stronger hake catches in the second quarter, combined with firm pricing. |
| Global fish oil pricing corrected over the period following the recovery in Peruvian anchovy resource and production levels, with the lower fish oil price mainly responsible for the 43.9% decrease in the Group’s headline earnings per share. |
| Revenue increased by 2.9% to R5.2 billion (March 2024: R5.0 billion), primarily due to increased sales volumes of canned foods, fishmeal and fish oil, hake and Namibian horse mackerel, together with firm pricing of wild-caught seafood. This revenue growth was offset by lower sales pricing for fishmeal and fish oil. |
| Gross profit margin decreased to 27.8% (March 2024: 34.1%), attributable to lower fishmeal and particularly fish oil prices and a higher proportion of lower-value bycatch and increased quota costs, in Namibian horse mackerel. The Lucky Star foods margin increased, driven by the higher local production volumes and improved efficiencies following cannery upgrades in the previous financial year. |
| Operating profit decreased by 33.5% to R676 million (March 2024: R1 017 million), mainly due to the lower gross margin at Daybrook. The growth in overhead expenditure at 3.4% was contained below inflation. Operating profit for the current period includes R28 million insurance proceeds related to wild-caught seafood vessel breakdown losses incurred in the prior year, compared to R8 million in Covid-19 business interruption insurance proceeds included in March 2024. |
| Net interest expense increased to R144 million (March 2024: R93 million) due to higher borrowing levels to fund the capital expenditure programme implemented over the past two years and the investment in working capital during the current period. The renewal of the interest rate swap in the United States (US) in February 2024 at higher rates, which hedged 50% of the US debt, further contributed to the increased interest expense. |
| The effective tax rate increased to 24.3% (March 2024: 22.5%) due to the reduced earnings from the US business, which is taxed at a lower rate. |
| Profit after tax decreased by 43.7% to R402 million (March 2024: R716 million), driven mainly by the decline in operating profit of the Fishmeal and fish oil (USA) segment and an increase in the net interest expense. |
| CASH FLOW AND FINANCIAL POSITION |
| The Group's net debt increased to R3 498 million at the end of the period (March 2024: R2 461 million), primarily to fund working capital requirements. The increase in working capital was driven by higher imports of frozen fish during the period, resulting in higher inventory levels. This strategic procurement decision was taken to ensure consistent supply and to optimise quality and yields. |
| The higher working capital investment, combined with lower cash operating profit, resulted in cash generated from operations decreasing to R10 million (March 2024: R634 million), |
| The Group’s net debt to EBITDA ratio accordingly increased to 2.2 times (March 2024: 1.2 times). The SA lender covenant leverage ratio for the March 2025 measurement date was increased from 2.5 times to 3.0 times, due to the higher working capital requirements. The Group complied with all lender covenant requirements relating to both its SA and US debt. |
| Capital expenditure was R183 million (March 2024: R297 million), primarily related to dry docks and further upgrades to the hake and horse mackerel fleet, including the Desert Jewel freon conversion. |
| DIVIDEND |
| The Group declared an interim dividend of 110 cents (2024: 195 cents) per share. |
| OUTLOOK |
| The operating environment for the Fishmeal and fish oil segments is expected to become more challenging amid softer global prices, compounded by the recent Peruvian anchovy first season TAC announcement of 3.0 million tons (March 2024: 2.5 million tons) and strong catches to date. |
| The US gulf menhaden fishing season started mid-April and will run for 28 weeks to the end of October. Early season landings at the end of week 6 are on par with the last season. Daybrook continues to monitor the evolving global tariff landscape. In response to the uncertainty around US-China tariffs, Daybrook is focusing on domestic petfood sales and exploring alternative market opportunities for fishmeal. |
| The FMO SA business will continue to focus on driving production efficiencies and product quality, but an anticipated anchovy TAC reduction due to a cyclically low biomass will temper results. |
| Lucky Star foods aim to sustain volume growth by leveraging its affordability and availability strategy, while expanding its brand and product range in the broader food sector and into new geographies. The strong inventory position will continue to support our ability to meet demand in the second half. Fishing operations and cost recoveries will be negatively impacted by the delay in the announcement of the final pilchard TAC. |
| The Wild caught seafood segment will continue to optimise vessel utilisation to leverage firm market demand. |
| The Group continues to prioritise reducing debt, along with the prudent management of costs and capital expenditure. The anticipated unwind of Lucky Star inventory levels in the second half will support a decrease in short-term borrowings. |
| Any forward-looking statements in this announcement have not been reviewed or reported on by the Company's external auditors. |
| DECLARATION OF INTERIM DIVIDEND NUMBER 162 |
| Notice is hereby given that the Board of Directors of Oceana has declared an interim gross cash dividend per share of 110 cents per share, out of current earnings, in respect of the period ended 31 March 2025. Where applicable, the deduction of dividends withholding tax at a rate of 20% will result in a net dividend amounting to 88 cents per share. |
| The issued share capital at the declaration date is 129,779,645 ordinary shares. The Company’s tax reference number is 9675/139/71/2. The relevant dates for the dividend will be as follows: |
| Last day to trade cum dividend: Tuesday, 24 June 2025 |
| Commence trading ex-dividend: Wednesday, 25 June 2025 |
| Record date: Friday, 27 June 2025 |
| Dividend payment date: Friday, 27 June 2025 |
| Share certificates may not be dematerialised or rematerialised between Wednesday, 25 June 2025 and Friday, 27 June 2025 (both dates inclusive). |
| This short-form announcement is the responsibility of the directors and is a summary of the information in the condensed consolidated interim results and does not contain complete details. Any investment decision should be based on the full announcement, which is available on our website: https://results.oceana.co.za/interim-results-2025 on https://senspdf.jse.co.za/documents/2025/jse/isse/oce/HY25.pdf as well as via our JSE sponsor at jsesponsor@standardbank.co.za. |
| For the full document, click the link below |
| Oceana Group Limited |
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