COMMENTS
Financial results
Group earnings for the year ended 30 September 2013 reflects the benefit of Oceanas diversified portfolio and continued
execution of strategy.
Earnings per share for the year ended 30 September 2013 increased by 10% and headline earnings per share increased
by 7% compared to the previous year.
Group revenue has improved by 8% to R4,997 million in 2013. This growth has been achieved from improvements in each
of our four operating segments, led primarily by an increase of 14% in the horse mackerel and hake division.
Revenue growth in the second half of the year has been affected by the continued constraints felt by South African
consumers, resulting in a slowdown in canned fish sales volumes and a significant decline in industrial fish landings.
Overhead expenditure includes a charge to the statement of comprehensive income of R152,4 million compared to R75,6
million in 2012, arising from IFRS2 share-based expenses. This increase, which is a direct result of the significant
improvement in Oceanas share price during the period under review, has had a material impact on the operating profit
for the year.
Operating profit before abnormal items increased by 5% compared to the previous year.
Inventory levels have increased by 64% in 2013 as a direct result of intentional canned fish stock build in anticipation
of continued demand, further impacted by a downturn in domestic canned fish volumes in the second half of the year as a
consequence of pressure on consumers. This has adversely impacted stock holding costs and working capital requirements.
A final dividend of 222 cents per share has been declared which together with the interim dividend of 100 cents brings
the total dividend for the year to 322 cents per share, an increase of 7% on the 2012 total dividend of 301 cents
per share.
Prospects
In light of the prevailing economic environment our ability to extract further volume growth in South Africa will remain
under pressure. We continue to explore growth opportunities in the rest of Africa.
Operational efficiency and working capital management will remain focus areas. Procurement of canned fish from foreign
suppliers, which has a six month lead time, has been cut-back in order to compensate for current inventory levels. We
anticipate that this will have a positive effect on working capital during the second half of the year once the lead time
effect has been taken into account.
Foodcorp acquisition
Further to the announcement released on the Stock Exchange News Service of the JSE on 4 June 2013 in respect of Oceanas
acquisition of the fishing interests of Foodcorp (Pty) Limited (Foodcorp), the Competition Commission has approved the
acquisition, subject to certain conditions. One of these conditions is not acceptable to both Oceana and Foodcorp.
Accordingly, the parties will file a Request for Consideration with the Competition Tribunal challenging the condition in
question. In the interim Oceana and Foodcorp have agreed to extend the sale of business agreement for a further three
months to 31 January 2014.
