South Africa’s Sea Harvest Group managed to increase both revenue and operating profit in 2021, despite ‘waves of continued uncertainty’ caused by the COVID-19 pandemic.
The group posted an operating profit of ZAR 691 million (€40.1 million/$44.7 million), up 10 percent over 2020, and revenue of ZAR 4.6 billion (€266.7 million/$297.8 million), up 5 percent on the year before.
Sea Harvest Group CEO Felix Ratheb said 2021 demonstrated the group’s “sheer mettle” against the ongoing volatility caused by COVID-19.
"While our different business segments delivered a mixed performance, the overall results are certainly pleasing given that we had to navigate a world gripped by a pandemic for a second year running,” said Ratheb.
Sea Harvest’s fishing operations in South Africa led the charge, increasing operating profit by 18 percent to ZAR 672 million (€39 million/$43.5 million), despite revenue dropping 3 percent and a 5 percent reduction in the hake total allowable catch (TAC) in 2021.
Meanwhile, the group’s fishing operations in Australia managed to grow revenue in the year by 2 percent. However, operating profit slipped 18 percent to ZAR 31 million (€1.8 million/$2 million).
Ratheb said the fishing business in Australia enjoyed strong catches, resulting in increased volumes of its own wild-caught fisheries products.
“This always provides a greater return compared to substitute or traded product and, coupled with a firm market in Australia in terms of price and the limited impact from COVID-19, allowed Sea Harvest Australia to continue its good performance of 2020.”
Critical to the group’s growth strategy in Australia is the execution of a transformative acquisition plan that will help reduce the businesses cost base and increase its market relevance in the region, he said.
To this end, in 2021, the group began negotiations to acquire the Western Australia-based fishing and related businesses of MG Kailis. The transaction is expected to close on April 2.
‘Streamlining’ aquaculture
Sea Harvest’s aquaculture business faced another year of tough trading conditions with inflated freight costs from South Africa and continued lockdown restrictions in the Far East.
Although revenue for the segment increased 72 percent to ZAR 92 million (€5.3 million/$6 million) over the year because of the introduction of additional abalone product formats and good volume growth, this increase was insufficient to turn the segment around.
The aquaculture unit posted another operating loss of ZAR 64 million (€3.7 million/$4.1 million).
With the segment still under pressure, the board of Viking Aquaculture resolved to limit its losses by closing the mussel and trout businesses to focus management’s time and efforts on the high-value, high-margin abalone business, said the group.
The mussel business was successfully closed by Dec. 31, and it is expected that the trout business will be closed by the end of March.
These closures resulted in ZAR 6.2 million (€359,495/$401,360) of impairment losses in the aquaculture segment for the year.
The operating loss attributable to the discontinued mussel and trout businesses amounted to ZAR 23 million (€1.3 million/$1.5 million).
"Through 2021, we worked really hard to implement key changes to our aquaculture business, which we know will hold us in good-stead once the market rebounds," said Ratheb.
"These included the introduction of new key executive management with a sales focus together with a streamlining of the core assets within our aquaculture portfolio."
