Oceana reported lower sales and production volumes in its largest segment by revenue because of greater costs and the weaker rand, despite seeing greater canned sales of its Lucky Star brand.
SA’s largest fishing company, valued at about R10bn on the JSE, said in a voluntary trading update for the 11 months to August 27 that higher selling prices and lower freight costs could not cover the above-inflation increases in energy, tin can and tomato paste costs, and the effect of the weaker rand against the dollar on the cost of imported raw material in its Africa canned fish and fishmeal segment.
In SA, this resulted in a 32% jump in the average selling price during the period, while sales volumes fell 8% to 21,246 tonnes and production volumes 24% because of bad weather impeding fishing.
According to the company’s latest interim results, the Africa canned fish and fishmeal segment of Oceana generated 54.5% of total revenue, but only 20.2% of operating profit.
But one highlight was the 8% year-on-year growth of Lucky Star’s canned sales volumes to 8.7-million cartons, as constrained consumers looked for cheaper sources of protein. Canned fish is also a good option as it does not need cooking or refrigeration, making it popular at spaza shops and during load-shedding.
Food inflation remains high despite domestic consumer inflation easing in recent times and Business Day reporting in June that CEO Neville Brink said food prices in SA would continue to rise.
In the US fishmeal and fish oil segment, the largest by operating profit, landings were 5% lower at 568-million in part because of the higher average water temperatures in the Gulf of Mexico and low water levels in the Mississippi River, but sales volumes were helped by greater inventory at the start of the period.
Landings are the part of the fish catch that is put ashore.
Meanwhile, Peru’s main anchovy fishing season was also cancelled because of the high number of young fish after the El Niño phenomenon — a climate pattern caused by the Pacific Ocean periodically heating up.
“The lower supply from Peru and stable global demand resulted in US-dollar fishmeal sales prices increasing 9% and US-dollar fish oil sales prices increasing 38% compared to the prior 11 month period,” Oceana said.
The company expects to publish its annual results on November 27.
With Katharine Child
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