Despite "one of the most challenging years in global history" Africa’s largest fishing company Oceana Group reported an increase in earnings for the financial year ending Sept. 30.

Operating profit rose 21 percent to ZAR 1.4 billion (€75.6 million/$92.4 million) boosted by a 9 percent nudge up in revenues to ZAR 8.3 billion (€448.2 million/$547.8 million), attributed to solid performance in the company's canned fish and fishmeal and oil segments.

The group operates in South Africa, Namibia and the United States and markets fish-based products in 46 countries across the world, managing a fleet of 54 vessels and eight cold storage facilities.

“Our customers are located across the world, with fresh fish being in demand in Africa and Europe, pet food in the US, fishmeal in Europe, Africa and Asia, and canned fish in South Africa," said CEO Imraan Soomra. "Diversification of both supply of raw materials and demand for our products has been key to delivering strong results this year."

Strong at-home consumption drove volume growth across the company's Lucky Star branded canned fish products, with the group's canneries in South Africa and Namibia delivering production and supply chain efficiencies to offset the significant increase in the cost of imported raw material.

The group’s fishmeal segment operates primarily in the United States and South Africa, supplying fishmeal and fish oil to a global customer base. Overall performance for this segment improved materially, driven by firm pricing, particularly in the US pet food sector and good catch rates in both geographies. Landings in South Africa were up 20 percent.

COVID-19 disruptions and an abnormally active hurricane season further hampered operations in the United States, but the business was able to absorb the effects of these impediments, growing profits in the segment by 18 percent.

Strong demand for fresh fish protein, particularly in Sub-Saharan Africa, contributed to similar growth in the group’s mackerel, hake and cold storage operations, with these segments delivering operating profit growth of 20 percent.

The group incurred incremental costs of ZAR 50 million (€2.7 million/$3.3 million) in the provision of personal protective equipment, dedicated staff transport, food parcels and recognition bonuses for frontline workers. In addition, the estimated loss of earnings due to lost fishing days, primarily in the United States and Namibia, is estimated at ZAR 75 million (€4.1 million/$4.9 million).

Over the medium term, the group expects a growing demand for its products. It will look to earnings growth in canned fish by keeping it affordable and consistently supplied, said Soomra. With fishmeal and fish oil, the group anticipates increased consumption in aquaculture, farming and the US pet food sector, and improved volumes in US fishmeal from investments in catch and processing capacity which is expected to yield results from the commencement of the new fishing season.

“While in-home consumption, strong inventory management and our affordability strategy will position us well for the next year, we are mindful that a second wave of the COVID-19 outbreak, particularly a prolonged one that potentially extends into the second half of 2021, may disrupt fish supply and availability," said Soomra. "We continue to monitor global trends and refine our operational tactics accordingly.”

South African fishing giant Oceana rides lucrative COVID-19 trends with 2020 earnings upsurge