Oceana thanks its Lucky Stars for canned fish and improved hake catch

The Oceana Group, which owns Lucky Star, says it expects to post strong results later in the year, thanks to strong performance from its Daybrook operation and canned fish business, even though its Wild Caught Seafood segment is disappointing.

In a Sens update on Monday, Oceana said it had performed well for the 11 months ended 25 August 2024, with Daybrook – its fish meal and fish oil division that operates in South Africa and the US – growing. Lucky Star’s performance was bolstered by the consistent demand for affordable protein due to cost-of-living pressures.

A year ago, Oceana reported that demand for affordable and shelf-stable protein, promotional activity and good opening stocks had boosted Lucky Star sales by 21% to a record five million cartons.

This year, Oceana reported exceptional performance of Daybrook and Lucky Star, which sold 4.8 million cartons for the six months ending 30 June. 

Profit after tax from continuing operations had soared by 74.2% to R716-million, while headline earnings per share increased 84.6% to 578.8 cents.

The board declared a 50% increase in the interim dividend to 195c/share, reflecting the strong financial performance and capital expenditure programme. 

Revenue from continuing operations increased 12.1% to R5-billion, and the gross margin expanded by 700 basis points to 34.1%. 

The group has invested in factory and vessel upgrades, expanded the Lucky Star brand, and acquired bolt-on businesses. 

Daybrook has capitalised on high demand for fish oil at record dollar prices, while Lucky Star's value offering boosted canned food sales. 

At the time, Oceana — the world’s biggest buyer of frozen pilchards — said it expected fish oil prices to remain firm due to growing aquaculture demand. It is also expanding its squid operations and has acquired a squid business to benefit from export demand. 

In today’s update, Oceana said its results for the period were tempered by the disappointing performance of both the South African and Namibian horse mackerel businesses.

Lucky Star sales volumes were down by 2%, but this was against the backdrop of record volumes sold in the comparative 11-month period. Oceana said affordability, availability and versatility were driving Lucky Star sales, which it hopes to capitalise on through its recent investments in canned meat and chicken liver. 

It had also closed both its West Coast plants earlier than usual to undertake factory upgrades, which dented production volumes by 26% for the period. Production resumed in the second half, with enhanced efficiencies and improved margins due to higher volumes of locally landed fresh pilchards. 

But Africa fishmeal and fish oil sales volumes were down by 16% due to lower raw material availability. Reduced pilchard trimmings from the cannery and lower anchovy landings, affected by adverse winter weather, contributed to the decline.

Daybrook’s performance was boosted by higher fish oil sales volumes, record US dollar prices, and a weaker rand. While fishmeal sales were lower, fish oil inventory levels increased significantly. Unseasonably windy conditions and a hurricane affected menhaden catches, but fish oil yields improved.

Hake sales volumes increased by 31%, helped by strong European demand, although horse mackerel sales in South Africa were 84% lower, causing a significant decline in operating performance.

Horse mackerel sales in Namibia were down, due to decreased catch rates and weaker prices. 

Oceana’s share price has declined by more than 9% over the past six months. 

Its on-day share price shifted by just over 1% by midday trade.

The group’s results for the year ending 30 September 2024 are expected to be released on or about 25 November 2024. DM