Food processor Oceana reported an increase in earnings for the 2023 financial year as its Lucky Star tinned fish product achieved record sales.
Oceana released its results for the year ended 30 September 2023 today, which revealed a strong performance for the company.
The company’s headline earnings per share from continuing operations increased by 29.2% to 808.8 cents per share.
Earnings per share grew by 29.1% from 622.9 to 804.1 cents per share.
Revenue also increased by almost 23% to R9.99 billion, with strong demand for affordable protein driving consumption and sales volumes.
The company said its strong performance was driven mainly by record sales volumes of Lucky Star pilchards in a constrained consumer environment and record pricing for fish oil following favourable global supply and demand dynamics.
“Higher opening inventory levels positioned the group well to service strong demand and benefit from price improvements across its product range,” Oceana said.
“The strength of the group’s diversification across species, geographies and currencies enabled it to remain resilient in a challenging operating environment characterised by high inflation, high interest rates, a volatile currency and increased load-shedding in South Africa.”
Oceana further benefitted further from increased demand and improved pricing across all wild-caught seafood products.
The company’s strategy of holding higher inventory levels enabled it to capitalise on the ongoing demand for canned fish, fishmeal, and fish oil.
Revenue also benefitted from improved pricing across all products, particularly for fish oil, and the effect of the weaker rand exchange rate on export and US-dollar translated revenue.
However, the company’s gross margin from continuing operations reduced to 28.6% (2022: 30.8%) despite positive price movements.
Ocean said the full impact of rising input costs in the canned fish business was not passed onto consumers as management adopted a strategy to maintain affordability.
The company’s margins were also negatively impacted by lower catch volumes and fish oil yields in both South Africa and the US fishmeal and fish oil operations, poorer vessel utilisation
and catch rates in its South African hake and horse mackerel fleets, and costs directly related to load-shedding.
Ocean upped its dividend to 305 cents (2022: 291 cents) per share, which, together with the interim dividend, brings the total dividend for the year to 435 cents (2022: 346 cents) per share, an increase of 25.7%.