Premier Fishing and Brands’ headline earnings per share swung from a 3.39 cents loss to 5.65 cents profit in the year to August 31, after strong rock lobster, pelagic and hake results offset disappointing environment-related squid catch-rates.
Revenue decreased 17% to R475 million, while gross profit fell by 20% to R153 million. Earnings before interest, taxation, depreciation, and amortisation increased 11% to R48m.
The Level 1-BEE fishing group, through its subsidiaries, harvests, processes, and markets sells and distributes a variety of marine products, and owns and manages its factories, an abalone farm, has a range of organic fertilisers through its Seagro brand and operates more than 30 fishing vessels.
The revenue decline was mainly due to the squid division, a statement from the group said. The squid sector saw reduced catch rates, an industry-wide phenomena.The export market for squid remained strong, with high prices per kilogram, but the low volumes missed out on capitalising on the price factor.
Pretax profit rose 6% to R19m, primarily due to a grant from the Department of Trade, Industry and Competition, and solid performances from lobster and in the pelagic and hake sectors. Catch rates for south coast rock lobster, hake and pelagic were expected to remain healthy.
Farmed abalone improved, especially in the export market. However, costs such as electricity, water, fuel, bait, feeding costs and employee costs had strained margins on abalone, and also the group’s operating margins.
The West Coast rock lobster sector remained a resource challenge as the group experienced a total allowable catch (TAC) decline, and catch rates in the year were low for the Premier quota and outside quota holders.
However, Premier was optimistic this sector would improve in the foreseeable future, said CEO Sooren Ramdenee.
He said they operated in an environment dependent on nature and the environment, and preserving cash over the past few years of economic turmoil because of global health restrictions, coupled with shifts in stock rates, had proved a good investment in Premier’s long-term future.
“Despite the disappointing squid catch-rate results, the group has performed ably,” he said.
Ramdenee said the board opted not to declare a dividend as Covid-19 continued to reverberate throughout global markets, the mercurial nature of the environment and the straitened catch rates in some of Premier’s fishing sectors.
The Fishing Rights Application Process was concluded in March. The group’s applications were scored and rated based on the quality of how they operated the fishing rights, the efficiency and usage of the assets and resources, investment into the vessels and management of the entire crew over 15 years – Premier has an exemplary safety record at sea, Ramdenee said.
Other areas where ratings were given included job creation, corporate social investment, transformation and other societal benefits.
“The group scored very well in all its major applications with the Department of Agriculture, Forestry and Fishing granting the group all its fishing rights for the next 15 years in March 2022,” he said.
Premier Fishing and Brands released a cautionary notice this month indicating African Equity Empowerment Investments (AEEI), which holds 56% of the shares in Premier, intended to make an offer to acquire the rest of the shares in Premier.