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Oceana Group Limited - Reviewed Group Results and Dividend Declaration for the
year ended 30 September 2003
OCEANA GROUP LIMITED
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
REVIEWED GROUP RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 30 SEPTEMBER
2003
The results of the group for the year ended 30 September 2003 are set out
herein.
The accounting policies used in preparing this report are consistent with those
used in the annual financial statements which have been prepared in accordance
with South African Statements of Generally Accepted Accounting Practice on a
basis consistent with the previous year, except as disclosed
in note 2.
The financial information has been reviewed by our auditors, Deloitte & Touche,
whose unqualified review opinion is available for inspection at
the registered office of the company.
Oceana Group Limited
Registered Office: 16th Floor Metlife Centre, 7 Coen Steytler Avenue,
Cape Town 8001
Transfer Secretaries: Computershare Limited, 70 Marshall Street, Johannesburg
2001 (P O Box 61051, Marshalltown 2107).
Sponsor: Standard Corporate and Merchant Bank (a division of The Standard Bank
of South Africa Limited)
Directors : D M J Ncube* (Chairman), R A Williams* (Vice Chairman),
A B Marshall (Chief Executive Officer), D F Behrens*, M A Brey*, B P Connellan*,
N Dennis*, R G Nicol, S Pather*, R V Smither*. (* non executive)
Company Secretary: JD Cole
GROUP INCOME STATEMENT
Reviewed Audited
Notes 2003 2002 Change
R"000 R"000 %
Revenue 2,582,626 2,690,433 (4)
Operating profit before abnormal
items 267,072 248,015 8
Abnormal items 1 (180) 14,484
Operating profit 266,892 262,499
Dividends received 9,646 48
Net interest received 20,941 27,081
Profit before taxation 297,479 289,628 3
Taxation 101,393 98,786 3
Profit after taxation 196,086 190,842
Attributable to outside shareholders
in subsidiaries 5,580 7,423
Attributable to own shareholders 190,506 183,419 4
-
Number of shares in issue (000"s) 108,475 107,742
Weighted average number of shares on
which earnings per share and headline
earnings per share are based (000"s) 108,100 106,743
Adjusted weighted average number of shares
on which diluted earnings per share and
diluted headline earnings per share
are based (000"s) 111,267 110,141
Earnings per share (cents)
Basic 176.2 171.8 3
Diluted 171.2 166.5 3
Headline earnings per share (cents)
Basic 182.4 162.0 13
Diluted 177.2 157.0 13
Dividends per share (cents) 76.5 68.0 13
DETERMINATION OF HEADLINE EARNINGS
Attributable to own shareholders 190,506 183,419
Adjusted for:
- Amortisation of goodwill 0 2,797
- Impairment loss on property, plant
and equipment 6,885 1,821
- Impairment loss on fishing rights 2,243 0
- Loss/(profit) on change of interest
in joint ventures 197 (1,065)
- Profit on disposal of property, plant
and equipment (2,687) (14,078)
Headline earnings for the year 197,144 172,894 14
STATEMENT OF CHANGES IN EQUITY
Share Non TOTAL
Capital & distribut- Distribut- R"000
Premium able able
R"000 Reserves Reserves
R"000 R"000
Balance at 30 September 23,712 21,041 474,506 519,259
2001
Shares issued 6,887 0 0 6,887
Movement on foreign
currency translation 0 18,973 0 18,973
reserve
Transfer to capital
redemption reserve fund 0 30 (30) 0
Net profit for the year 0 0 183,419 183,419
Dividends 0 0 (60,597) (60,597)
Balance at 30 September 30,599 40,044 597,298 667,941
2002
Shares issued 2,811 0 0 2,811
Movement on foreign
currency translation 0 (17,547) 0 (17,547)
reserve
Net profit for the year 0 0 190,506 190,506
Dividends 0 0 (74,505) (74,505)
Balance at 30 September 33,410 22,497 713,299 769,206
2003
GROUP BALANCE SHEET
Reviewed Audited
2003 2002
R"000 R"000
Assets
Non current assets 395,003 324,943
Property, plant and equipment 280,189 199,055
Fishing Rights 20,706 29,183
Deferred taxation 20,115 20,676
Investments and loans 73,993 76,029
Current assets 889,443 841,670
Inventories 193,091 161,017
Accounts receivable 452,752 387,334
Cash and cash equivalents 243,600 293,319
Total assets 1,284,446 1,166,613
Equity and liabilities
Capital and reserves 769,206 667,941
Share capital and premium 33,410 30,599
Non-distributable reserves 22,497 40,044
Distributable reserves 713,299 597,298
Interest of outside shareholders 14,211 11,868
Non-current liabilities
Deferred taxation 12,921 12,010
Current liabilities 488,108 474,794
Bank overdraft 39,088 43,471
Accounts payable and provisions 449,020 431,323
Total equity and liabilities 1,284,446 1,166,613
Net asset value per ordinary share (Rand) 7.09 6.20
Total liabilities excl deferred tax:
Total shareholders"funds (%) 62 70
GROUP CASH FLOW STATEMENT
Reviewed Audited
2003 2002
R"000 R"000
Cash flows from operating activities
Operating profit 267,072 248,015
Adjustment for non cash items 56,092 48,475
Cash operating profit before working
capital changes 323,164 296,490
Working capital changes (85,193) 2,958
Cash generated from operations 237,971 299,448
Interest and dividends received 37,568 31,514
Interest paid (6,981) (4,385)
Taxation paid (100,270) (77,567)
Dividends paid (78,673) (64,798)
Net cash flow from operating activities 89,615 184,212
Cash outflow from investing activities (130,918) (33,833)
Net cash (outflow) inflow before financing
activities (41,303) 150,379
Net cash flows from financing activities 2,811 6,887
Net (decrease) increase in cash and
cash equivalents (38,492) 157,266
Reduction in cash resulting from disposal of joint
ventures (2) (6)
Cash and cash equivalents at the
beginning of the year 249,848 90,549
Effect of exchange rate changes (6,842) 2,039
Cash and cash equivalents at the end of the year 204,512 249,848
SEGMENT REPORT
Reviewed Audited
2003 2002
R"000 R"000
Revenue
Inshore Fishing 1,262,497 1,089,504
Midwater and Deepsea Fishing 1,190,706 1,487,708
Commercial Cold Storage & Logistics 129,423 113,221
Total 2,582,626 2,690,433
Operating Profit before abnormal items
Inshore Fishing 145,359 142,044
Midwater and Deepsea Fishing 80,070 72,699
Commercial Cold Storage & Logistics 41,643 33,272
Total 267,072 248,015
Total assets
Inshore Fishing 519,063 398,978
Midwater and Deepsea Fishing 295,074 244,721
Commercial Cold Storage & Logistics 132,601 132,890
Financing 317,593 369,348
1,264,331 1,145,937
Deferred taxation 20,115 20,676
Total 1,284,446 1,166,613
Total liabilities
Inshore Fishing 293,682 254,155
Midwater and Deepsea Fishing 71,820 91,593
Commercial Cold Storage & Logistics 83,518 85,575
Financing 39,088 43,471
488,108 474,794
Deferred taxation 12,921 12,010
Total 501,029 486,804
NOTES
Reviewed Audited
2003 2002
R"000 R,000
1. Abnormal items
Net profit on disposal of property,
plant and equipment 17 13,419
(Loss)/profit on change of interest
in joint ventures (197) 1,065
Abnormal profit before taxation (180) 14,484
Taxation 0 1,143
Abnormal profit attributable to
own shareholders (180) 13,341
2. Change in accounting policies
With effect from 1 October 2002 the group
adopted AC133 relating to the recognition and
measurement of financial instruments. Prior
year results have not been restated due to
the immaterial amounts involved and there has
been no material effect on the results for
the current year as a result of this change
in policy.
3. Dividends
Dividend declared after reporting date 64,000 55,554
4. Supplementary Information
Cost of sales 1,752,280 1,985,983
Depreciation 44,558 39,829
Amortisation of goodwill and other intangibles 2,247 5,203
Impairment loss on plant and equipment 7,860 2,802
Impairment loss on fishing rights 2,243 0
Operating lease charges 11,780 9,397
Foreign exchange loss (profit) 11,473 (1,158)
Capital expenditure including fishing rights 136,313 51,347
- Expansion 94,000 7,852
- Replacement 42,313 43,495
Capital commitments 130,279 166,540
- Contracted 10,295 35,905
- Approved 119,984 130,635
Contingent liabilities 1,489 1,908
COMMENTS
Financial Results
Headline earnings increased by 14% over those of the previous year and by 13% on
a per share basis. Group turnover was lower by 4%. However the overall operating
margin improved from 9.2% to 10.3% resulting in operating profit before abnormal
items increasing by 8%.
A final dividend of 59.0 cents per share has been declared, which together with
the interim dividend of 17.5 cents, brings the total dividend for the year to
76.5 cents per share. The total dividend represents an increase of 13% over the
previous year.
Review of operations
Sales volumes of canned fish on the domestic market, mostly under the Lucky Star
brand, increased by 21% as a result of the improved supply from South African
and Namibian canneries. The pilchard biomass in SA waters is considered to be
healthy and the Total Allowable Catch (TAC) in 2003 was finalised at 285 000
tons (2002: 258 000 tons). A fifth steel pelagic vessel costing R17.2 million
was added to the fleet at the commencement of the fishing season and production
volumes through Oceana"s cannery at St Helena Bay increased by 18%. A pilchard
TAC of 20 000 tons (2002: nil) was allocated in Namibia of which Etosha Fishing
processed 13 387 tons.
The contribution from fish meal was lower than the previous year due to reduced
production volumes, higher input costs and lower selling prices.
Export realisations from lobster were lower due to both weaker selling prices in
US dollars and the stronger rand exchange rate. Volumes and prices of live
lobster exports were negatively affected during the period from March to July
following the outbreak of SARS in the Far East which in turn resulted in reduced
frozen lobster prices in Japan. Overall results from the group"s lobster
operations were well below those of the previous year.
Horse mackerel fishing in both Namibia and South Africa was good and market
conditions were favourable during most of the year although prices were lower in
the second half. Trading volumes of midwater pelagic fish from the north
Atlantic region were lower than the abnormally high level of the previous year.
Overall mid water pelagic turnover declined but margins improved. The newly
acquired midwater trawler, Desert Diamond, was commissioned in August to operate
in South African waters on own and contracted horse mackerel quotas. The cost of
the vessel was R70.9 million. The midwater pelagic operation again made a good
contribution to group profits.
Hake fishing results in South Africa were substantially lower than the previous
year and were negatively affected by lower catch rates and the stronger rand
exchange rate. In Namibia, hake fishing conditions continued to be poor and the
business sustained a loss.
Squid catches were higher than last year and export markets were firm, resulting
in a good contribution from this Eastern Cape based operation. Tuna and abalone
recorded poor results.
Cold storage occupancy levels on average were ahead of last year, due mainly to
increased import activity, and profits improved. The ships agency operation
showed improved results and although bunker volumes increased, profitability was
affected by the strong rand exchange rate.
Operational cash flow remained strong although cash balances reduced mainly as a
result of high capital expenditure and increased working capital requirements.
Canned fish inventory levels improved from the low levels of the previous year
and trade debtors were higher at year end due to higher turnover in the last two
months.
Prospects
The pelagic fishing season continues until the end of December and good landings
are anticipated during this period and for the 2004 season. The Namibian
pilchard resource appears to be recovering and a more substantial TAC is
possible next year. Depending on fishing conditions, canned fish production and
sales volumes are expected to increase next year.
Export earnings will be adversely affected by the strong rand exchange rate.
However, volume increases and efficiency improvements are achievable in most
areas of operation which, subject to favourable fishing conditions, should
compensate for the currency effect.
Overall, the group expects to achieve an increase in headline earnings per share
for the year ahead.
On behalf of the board.
DMJ Ncube AB Marshall
Chairman Chief Executive Officer
DIVIDEND DECLARATION
Notice is hereby given that a final dividend No. 120 of 59.0 cents per share, in
respect of the year ended 30 September 2003, was declared on Thursday
6 November 2003. Relevant dates are as follows:
Last day to trade cum dividend - Friday 2 January 2004
Commence trading ex dividend - Monday 5 January 2004
Record date - Friday 9 January 2004
Dividend payable - Monday 12 January 2004
Share certificates may not be dematerialised or rematerialised between
Monday 5 January 2004 and Friday 9 January 2004, both dates inclusive.
By order of the board
J D Cole Secretary
6 November 2003
Date: 06/11/2003 03:45:09 PM Supplied by www.sharenet.co.za
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