…Blames Pilchard moratorium for N$29m Joint venture losses
By Hilary Mare
THE Oceana Group’s losses from associate and joint ventures increased to N$29 million (March 2017: N$9 million) attributable largely to the moratorium on pilchard fishing in Namibia and challenging fishing conditions experienced in Angola, the Group’s unaudited interim results for the six months ended 31 March 2018 reveal.
In December last year, former information minister, Tjekero Tweya announced that Namibia will not harvest pilchard for the next three years, due to climate change adding that the Total Allowable Catch (TAC) for pilchard was set at zero metric tonnes for the years 2018-2020, in order to allow the species to recover.
Ocean is associated with Namibia’s Etosha Fishing Corporation through a shareholding agreement with concluded in 2000.
“Local supply has been bolstered by an increase in the initial 2018 South African Total Allowable Catch (TAC) for pilchard to 59 214 tons from 45 560 tons in 2017, but offset by a Ministerial decision in Namibia to suspend pilchard fishing in 2018 (March 2017: 14,000 tons) based on scientific advice,” said the Group last week before adding that costs have been well managed due to the positive impact of stable international procurement prices and the stronger Rand on raw material costs, supported by a revised forward cover policy.
“As a result the canned fish segment has delivered an improved profit for the period.”
The Group added that the fishmeal and fish oil division has been adversely affected by lower landings and production yields in Angola.
“Anchovy landings in South Africa have been consistent with prior periods. Fishmeal and fish oil pricing for this segment remained firm in USD terms but have been offset by the stronger Rand,” the group further explained.
However, the Group’s operating profit before associate and joint venture income and fair value adjustments increased by 9 percent to N$560 million (March 2017: N$516 million).
“This is primarily due to a 51percent increase in operating profit from Africa operations which, in addition to the revenue drivers listed above, is the effect of improved cost efficiencies resulting from lower raw material and logistics costs, improved vessel utilisation and higher catches rates,” added the group.
Overall financial performance of the Group for the six months has been solid, underpinned by a recovery of the African operations after a challenging year in 2017. Material volume improvements in the canned fish and hake and horse mackerel segments and continued efficiencies contributed to the positive performance, bolstered by improved management of foreign currency exposure.
Last week, Etosha Fishing Managing Director, Pieter Greeff was quoted in the media saying that imported frozen pilchard from North Africa, a strategy that was born in 2010 out of desperation, is helping the last cannery in Walvis Bay to continue its operations, and to employ its usual number of staff.
Etosha Fishing Corporation announced that its cannery has been fully operational since January, processing frozen pilchard cutlets from Morocco and whole round frozen pilchard from Mauritania. The company gave the assurance that this strategy will enable it to guarantee employment for all its seasonal workers until the end of this year.
“Our cannery has been fully operational since January and we anticipate continuing normal operations for the remainder of the year. I am also confident that we will be operational until the end of 2019,” stated Greeff.
Providing some relief The Oceana Group also reported that in Namibia the 2018 horse mackerel TAC remained in line with 2017 at 340 000 tons.
“Namibian landings improved against the comparable period due to higher catch rates and better vessel utilisation. The higher catch rates together with the positive effect of the stronger rand on USD denominated costs reduced the cost per ton of landed fish,” said the Group.
Incorporated in 1918 and listed on the Johannesburg (JSE) and Namibian (NSX) stock exchanges, Oceana Group is the largest fishing company in Africa and an important participant in the Namibian, Angolan and US fishing industries. The Group employs 5 690 people, of whom 4 473 are directly employed and 1 217 are indirectly employed.
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