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Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration number 1939/001730/06)
JSE/A2X share code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
("Oceana" or "the Group")
VOLUNTARY TRADING UPDATE AND TRADING STATEMENT
1. VOLUNTARY TRADING UPDATE FOR THE FIVE MONTHS ENDED 25 FEBRUARY 2024
A strong operating performance in the United States contributed to the Group delivering a 13.2%
increase in revenue for the five months ended 25 February 2024 ("the period"). As previously
communicated, Daybrook's higher opening inventory levels enabled higher fishmeal and fish oil sales
volumes at record US dollar fish oil pricing levels during the period. Revenue further benefitted from
the positive effect of the weaker Rand exchange rate on export and US dollar translated revenue.
Lower sales volumes of Lucky Star canned products and wild caught seafood species moderated this
strong revenue growth.
Canned Fish and Fishmeal (Africa)
Lucky Star's canned food revenue declined by 8.7% for the period due to lower sales volumes largely
as a result of the high base in the prior comparative period where record sales were boosted by
customer buy-in ahead of the January 2023 price increase.
Fishmeal and fish oil revenue in the South African (SA) business reduced by 36.3% for the period due
to lower opening inventory levels and resultant lower sales volumes coupled with lower volumes of
pilchard offcuts from the cannery, linked to the longer factory closure.
The decision to close both West Coast plants earlier than normal to implement the planned factory
upgrades resulted in lower production volumes for the period, which impacted fixed cost recovery
and operating margin. The upgrades are progressing as planned with the St Helena Bay cannery and
fishmeal plant upgrades completed in mid-January and the Laaiplek fishmeal plant upgrade expected
to be completed by mid-April.
Fishmeal and Fish oil (USA)
Higher opening inventory levels and good fish oil yields produced from end of season October
landings, together with continued strong global pricing for fishmeal and fish oil, resulted in an
exceptional performance for the period with revenue doubling. The upcoming fishing season is set to
commence on 15 April 2024.
Wild Caught Seafood
The SA Horse Mackerel operating performance was impacted by lower volumes due to persistently
lower catch rates. This was compounded by the Desert Diamond vessel being unable to fish for a large
portion of the period due to an unplanned major breakdown and extended time required to source
replacement parts.
In Namibia, improved horse mackerel catch rates in the second quarter, together with firm demand
and US dollar export pricing, benefitted performance.
Hake performed well for the period with higher sales volumes and improved prices, driven by strong
European demand. The increase in sales volumes was due to an improvement in fleet utilisation
however, catch rates across the industry remained below historical average.
Poor fishing conditions during the period adversely impacted industry-wide squid catch rates.
These factors contributed to revenue in this segment reducing by 18.4% for the period.
Outlook
The constrained domestic consumer environment is expected to continue to place pressure on
protein consumption. Despite the tough trading environment, Lucky Star expects stronger March
sales volumes resulting in a marginal decline in revenue at the interim period close. Lucky Star's
second half focus will be on margin enhancement while sales volumes are expected to benefit from
the new canned meat facility which is now in full production.
Anchovy and red eye landings for the season, which peak between March and July each year, will be
key to the performance of South African fishmeal and fish oil business.
Global fishmeal and fish oil markets will monitor the fishing and production output of Peru's first
anchovy season which runs April to June, and this could slow demand and the willingness of customers
to commit to longer term contracts until Peru's performance is known. Pricing for fish oil is expected
to remain strong in the short- to medium-term given the shortage in global supply to meet market
demand. Daybrook will continue with the practice of ensuring that inventory levels are adequate to
meet customer demand levels during its off season.
Market demand for wild caught species is expected to remain firm with second half performance
largely dependent on catch rates in both SA and Namibia, which have shown initial signs of recovery
in the second quarter. The Desert Diamond is expected to return to sea during the second half.
Following the certainty provided by the 15-year renewal of fishing rights, the Group is on track with
its three-year capital investment plan to upgrade its SA processing facilities and vessels, which will
result in direct efficiency gains and benefit future operational performance.
2. TRADING STATEMENT FOR THE SIX MONTHS ENDING 31 MARCH 2024
The Group is nearing the end of its six months ending 31 March 2024. In accordance with section
3.4(b) of the Listings Requirements of the JSE Limited ("JSE"), a listed company must publish a trading
statement once it is satisfied that a reasonable degree of certainty exists that the financial results for
the period to be reported on next will differ by at least 20% from the financial results reported in the
prior period.
The Group is satisfied that a reasonable degree of certainty exists that total basic headline earnings
per share (HEPS) and total basic earnings per share (EPS) for the six months ending 31 March 2024
will be more than 60% higher than the reported HEPS of 299.1 cents and EPS of 295.4 cents for the
prior comparative period. This increase in earnings is primarily due to higher opening fishmeal and
fish oil inventory levels in the US, and record international pricing for fish oil.
Further earnings guidance will be provided to shareholders when the Group has reasonable certainty
of the anticipated EPS and HEPS range, in accordance with paragraph 3.4(b)(iii) of the Listings
Requirements of the JSE.
The Group's interim results are expected to be released on the Stock Exchange News Service on 10
June 2024.
The financial information and any forward-looking statements in this announcement have not been
reviewed or reported on by the Group's auditors.
15 March 2024
Cape Town
JSE Sponsor
The Standard Bank of South Africa Limited
NSX Sponsor
Old Mutual Investment Services (Namibia) Proprietary Limited
Date: 15-03-2024 07:30:00
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