Oceana reports a strong catch


Oceana reports a strong catch

Published Date: 2019-05-10 | Source: Stephen Gunnion | Author: Stephen Gunnion

Oceana reports a strong catch

The producer of Lucky Star pilchards benefited from increased sales of canned fish but footed a much higher tax bill.

Oceana Group has reported a strong rise in first-half earnings - if you strip out a significantly higher tax charge. Africa's biggest fisheries company warned last month that taxes would erode profits after it benefitted last year from the once-off release of deferred taxation amounting to R161 million when the US cut its federal corporate tax rate to 21% from 35%.

The group said a positive performance in the six months to end-March was driven by increased sales volumes of canned fish, such as its iconic Lucky Star pilchards brand, as well as production efficiencies at its local canneries. Stronger fishmeal and fish oil prices, good hake and horse mackerel catch rates and prices, combined with higher cold store occupancy levels in the SA coastal stores, also contributed.

Group revenue increased by 3% over the period to R3.56 billion and group operating profit rose 12% to R554 million. Its net interest expense fell by 12% to R130 million, resulting in a 28% rise in pre-tax profit to R423 million. However, following tax income of R47 million last year, it faced a tax expense of R122 million this year. That left headline earnings 19% lower at R292 million. Headline earnings per share were down by the same margin at 249.7c. Excluding the effect of the once-off deferred tax adjustment, fair value adjustments and other operating items, headline earnings increased by 17%. It's raised its interim dividend by 9.8% to R123c per share.

The group has a much wider investor base after Tiger Brands unbundled its holding to shareholders at the beginning of last week. That's after it sold a stake to Brimstone Investments.

Its shares fell 2.3% to R73.01 yesterday.

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