On Monday, Sea Harvest [JSE: SHG] reported a 86% increase in its revenue (R1.87 billion) for the six months to end-June, thanks in part to the takeover of Ladismith Cheese earlier this year.
Its headline earnings increased by 52% to R169 million, and headline earnings per share gained 32%.
Revenue from its South Africa fishing operations rose by 49% and Sea Harvest expects that global demand for its high-value, wild-caught seafood will support growth and “firm” pricing in export markets.
But abalone sales were lower due to “an extended red tide event” as well as “market issues in Hong Kong and China, impacted by geo-political issues within the region”. Increased competition in the smaller size category from other abalone producers also contributed.
Sea Harvest expects that local retail volumes will come under continued pressure as a result of the challenging economic environment and price inflation in the category.
Ladismith Cheese contributed R441 million in revenue, and saw volume growth across all categories.
This year, the company bought a remaining 43.7% interest in of Sea Harvest Australia (formerly Mareterram) that it didn't previously owned. Revenue for the past six months from this operation increased 4% to R182 million. Sea Harvest expects that revenue and earnings from Sea Harvest Australia will be higher in the second half of the year due to the seasonal nature of the business.
Sea Harvest's share price rose by more than 5% to R13.94 by early afternoon on Monday.
Compiled by Helena Wasserman
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