Despite the ongoing volatility caused by COVID-19, Sea Harvest has once again proved its resilient and defensive nature in delivering revenue for the year ended 31 December 2021 of R4.6 billion, 5% ahead of 2020, and operating profit of R691 million, 10% ahead of 2020. Earnings per share increased 9% to 168 cents per share.
Sea Harvest Group CEO, Felix Ratheb, says 2021 demonstrated the Group’s sheer mettle against waves of continued uncertainty. “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. We also succeeded in executing our growth strategies within our dairy business by increasing our production capacity in the powder and butter segments and acquiring Mooivallei Suiwel to provide additional cheese capacity. We further completed the acquisition of 53.7% of BM Foods Group; thereby diversifying our South African food offering into new categories, including convenience and prepared foods,” he explains.
According to Ratheb, the Group’s fishing operations in South Africa (SA) remained a strong performer increasing operating profit by 18% to R672 million, despite a 5% reduction in the Hake total allowable catch (TAC) in 2021, a 7% strengthening in the Rand to the euro, and a 21% increase in the price of fuel.
The Cape Harvest Foods segment experienced significant organic and acquisitive growth resulting in revenue increasing 28% to R1.3 billion offset by an increase in milk prices and other once-off costs from the expansion projects in the Ladismith Cheese business.
Ratheb continues that the Group’s fishing business in Australia enjoyed strong catches resulting in increased volumes of its own wild-caught fisheries products. He explains, “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 that will help reduce the business’s cost base and increase its market relevance in the region. To this end, in 2021, the Group commenced negotiations to acquire the Western Australia-based fishing and related businesses of MG Kailis, a well-established and market-leading vertically integrated seafood business with over 50 years of experience in the seafood industry in Australia. This culminated in the signing of agreements on 11 January 2022, with the transaction expected to close on 2 April 2022.
Meanwhile, Ratheb says the Sea Harvest Aquaculture business faced another year of tough trading conditions with the curtailment of international air travel and resultant inflated freight costs from South Africa, together with continued lockdown restrictions in the Far East. “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. 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,” says Ratheb.
Sea Harvest Group Board Chairman, Fred Robertson, has expressed his satisfaction with the Group’s performance. “It was a great effort, thanks to the commitment and dedication of staff who were confronted with yet another very challenging year. I believe the leadership team, supported by the Board and shareholders did an excellent job, especially when considering the holistic approach adopted in managing the long-term sustainability of the business. This included a focused approach to administering COVID-19 vaccines to employees during 2021 that resulted in 91% of the Group’s employees being vaccinated,” states Robertson.
In conclusion, Ratheb says the Group’s outlook for 2022 is highly reliant on the FRAP2021 outcome in pursuit of its ambition of being a leading, diversified, responsible, black-owned global fishing and foods business.