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OCEANA GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2001
The audited results for the six months ended 31 March 2001 are set out herein.
This report has been prepared in compliance with South African Statements of
Generally Accepted Accounting Practice and, except as disclosed in note 2, in
accordance with the principles applied in the most recently published annual
financial statements.
Directors :
D M J Ncube (Chairman), R A Williams (Vice Chairman), A B Marshall (Managing
Director), D F Behrens, M A Brey, B P Connellan, N Dennis, R M Kramer, R G
Nicol, S Pather, R V Smither, R de H Steenkamp, A W S Visagie, T W Vundla.
Alts: A L Hobbs, L T Langeni, R A Oktober, G A Rhodes-Harrison
GROUP INCOME STATEMENT Unaudited Audited
Six months ended Year ended
31 March 30 Sept
Notes 2001 2000 Change 2000
R'000 R'000 % R'000
Revenue 1,010,968 850,424 19 1,747,281
Operating profit 95,004 76,721 24 165,865
Dividends received 6 0 0
Net interest received 3,465 3,965 8,967
Profit before taxation
and abnormal items 98,475 80,686 22 174,832
Abnormal items 1 1,651 0 383
Profit before taxation 100,126 80,686 175,215
Taxation 35,027 27,522 27 62,038
Profit after taxation 65,099 53,164 113,177
Share of profits / (losses)
of associate company 0 (3) 61
Profit after taxation
including associate company 65,099 53,161 113,238
Attributable to outside
shareholders in subsidiaries 1,208 383 592
Attributable to own
shareholders 63,891 52,778 21 112,646
Number of shares in
issue (000's) 104,677 103,470 104,414
Weighted average no of shares
on which headline earnings and
net profit per share are
based (000's) 104,638 103,350 103,694
Headline earnings per
share (cents) 59,1 50,5 17 107.3
Net profit per share (cents) 61,1 51.1 20 108.6
Dividends per share (cents) 13.0 11,0 18 45.0
DETERMINATION OF HEADLINE EARNINGS
Attributable to own shareholders 63,891 52,778 112,646
Adjusted for:
- Amortisation of goodwill 77 0 0
- Profit on change of interest
in investment 0 0 (262)
- Profit on disposal of fixed
assets (2,159) (561) (1,164)
Headline earnings for
the period 61,809 52,217 18 111,220
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend No. 115 of 13 cents per share,
in respect of the year ending 30 September 2001, was declared on 10 May 2001,
payable to shareholders registered as such at the CSD or registered in the
books of the company, at the close of business on 21 June, payment to be made
on 6 July 2001.
By order of the board
J D Cole Secretary
10 May 2001
Registered Office: 20 Lower Burg Street , Cape Town 8001
Transfer Secretaries : Mercantile Registrars Limited
11 Diagonal Street, Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
DEMATERIALISATION (STRATE)
Following notification from STRATE, shareholders were advised by letter dated
12 March 2001 that the start date for dematerialisation of share certificates
was 14 May 2001. This date was changed subsequently by STRATE, to 23rd July
2001. The salient dates are now:
Start date for dematerialisation 23 July 2001
First trade date for electronic settlement 13 August 2001
First electronic settlement 20 August 2001
STATEMENT OF CHANGES IN EQUITY
Notes Share Non
Capital Distribut Distribut-
& -able able
Premium Reserves Reserves TOTAL
R'000 R'000 R'000 R'000
Period 1 October
2000 to 31 March 2001
Balance at the
beginning of the period 16,795 13,929 348,523 379,247
Reversal of excess
provisions brought
forward 2 0 0 2,117 2,117
Reversal of deferred
tax on excess provisions 2 0 0 (639) (639)
Restated balance at the
beginning of the period 16,795 13,929 350,001 380,725
Shares issued 1,042 0 0 1,042
Movement on foreign
currency translation
reserve 0 796 0 796
Transfer of portion of
accumulated loss in
subsidiary to outside
shareholders on change
of shareholding 0 0 416 416
Net profit for the period 0 0 63,891 63,891
Dividends 0 0 (13,680) (13,680)
Balance at the end of period 17,837 14,725 400,628 433,190
Period 1 October 1999 to
31 March 2000
Balance at the beginning
of the period 11,857 11,632 282,998 306,487
Transfer from non-distributable
reserves 0 (3) 3 0
Shares issued 179 0 0 179
Discount on acquisition
of business 0 454 0 454
Movement on foreign currency
translation reserve 0 1,100 0 1,100
Net profit for the period 0 0 52,778 52,778
Dividends 0 0 (11,276) (11,276)
Balance at the end
of the period 12,036 13,183 324,503 349,722
Period 1 October 1999 to
30 September 2000
Balance at the beginning
of the year 11,857 11,632 282,998 306,487
Transfer from non-distributable
reserves 0 (94) 94 0
Shares issued 4,938 0 0 4,938
Discount on acquisition
of business 0 558 0 558
Movement on foreign currency
translation reserve 0 1,833 0 1,833
Goodwill written off 0 0 (219) (219)
Net profit for the year 0 0 112,646 112,646
Dividends (46,996) (46,996)
Balance at the end of the year 16,795 13,929 348,523 379,247
GROUP BALANCE SHEET
Unaudited Audited
31 March 30 Sept
Notes 2001 2000 2000
R'000 R'000 R'000
Assets
Non current assets 256,539 167,531 190,995
Vessels, plant and equipment 206,652 129,471 158,142
Goodwill 2.1 3,030 0 0
Fishing Rights 2.1 23,820 0 0
Deferred taxation 16,004 29,419 22,331
Investments and loans 3 7,033 8,641 10,522
Current assets 564,394 551,001 595,032
Inventories 129,551 131,264 169,987
Accounts receivable 403,800 325,800 339,695
Cash and cash equivalents 31,043 93,937 85,350
Total assets 820,933 718,532 786,027
Equity and liabilities
Capital and reserves 440,972 355,254 384,531
Share capital and premium 17,837 12,036 16,795
Non-distributable reserves 14,725 13,183 13,929
Retained income 2.3 400,628 324,503 348,523
Interest of outside
shareholders 7,782 5,532 5,284
Non-current liabilities 10,889 2,466 960
Long-term borrowings 6,988 149 0
Deferred taxation 3,901 2,317 960
Current liabilities
Accounts payable, provisions
and shareholders for
dividends 2.3 369,072 360,812 400,536
Total equity and liabilities 820,933 718,532 786,027
Net asset value per ordinary
share (cents) 414 338 363
Total liabilities: Total
shareholders'funds (%) 86 102 104
GROUP CASH FLOW STATEMENT
Unaudited
Six months Audited
Ended Year end
31 March 30 Sept
2001 2000 2000
R'000 R'000 R'000
Cash flows from operating activities
Operating profit 95,004 76,721 165,865
Adjustment for non cash items 14,682 13,020 31,364
Operating profit before working
capital changes 109,686 89,741 197,229
Working capital changes (30,906) 41,677 5,529
Cash generated from operations 78,780 131,418 202,758
Interest and dividends received 7,709 6,938 15,127
Interest paid (4,238) (2,973) (6,160)
Taxation paid (26,843) (25,328) (54,393)
Dividends paid (35,572) (26,752) (38,226)
Net cash inflow from
operating activities 19,836 83,303 119,106
Cash outflow from investing
activities (73,229) (57,612) (106,711)
Net cash (outflow)/inflow
before financing activities (53,393) 25,691 12,395
Net cash flows from financing
activities 733 179 4,888
Net (decrease)/increase in
cash and cash equivalents (52,660) 25,870 17,283
Borrowings resulting from
acquisition of business (1,647) (10,990) (10,990)
Cash and cash equivalents at the
beginning of the period 85,350 79,057 79,057
Cash and cash equivalents at the
end of the period 31,043 93,937 85,350
SEGMENT REPORT
Unaudited Audited
31 March 30 Sept
2001 2000 2000
R'000 R'000 R'000
Revenue
Oceana Brands 422,442 385,654 758,145
Erongo Group 195,454 151,925 342,034
Blue Continent Group 337,198 266,768 537,878
Commercial Cold Storage & Logistics 55,874 46,077 109,224
Total 1,010,968 850,424 1,747,281
Operating Profit
Oceana Brands 37,315 28,797 67,729
Erongo Group 12,739 12,038 14,950
Blue Continent Group 31,314 27,734 58,112
Commercial Cold Storage & Logistics 13,636 8,152 25,074
Total 95,004 76,721 165,865
Total assets (Excluding deferred tax)
Oceana Brands 273,046 235,244 282,886
Erongo Group 144,971 48,160 70,398
Blue Continent Group 221,055 166,703 180,490
Commercial Cold Storage & Logistics 127,781 136,428 134,050
Financing 38,076 102,578 95,872
Total 804,929 689,113 763,696
Total current liabilities (Excluding
deferred tax)
Oceana Brands 152,868 168,954 165,755
Erongo Group 47,749 34,271 25,842
Blue Continent Group 68,934 69,658 90,821
Commercial Cold Storage & Logistics 79,326 67,537 74,430
Financing 20,195 20,392 43,688
Total 369,072 360,812 400,536
NOTES
Unaudited Audited
31 March 20 Sept
2001 2000 2000
R'000 R'000 R,000
1. Abnormal items
Profit on disposal of land
and buildings 1,651 0 121
Profit on change of interest 0 0 262
in investment_
Abnormal profit before taxation 1,651 0 383
Taxation 0 0 0
Abnormal profit attributable to
own shareholders 1,651 383 383
2. Change in accounting policies
2.1 The company has changed its
accounting policy for goodwill
and other intangible assets.
Whereas goodwill and intangible
assets were previously written
off to distributable reserves,
they are now capitalised and
amortised over their expected
useful lives in terms of AC129.
2.2 The company has changed its
accounting policy for providing
for the impairment of vessels,
plant and equipment. The company
used to provide for the impairment
of these assets which occurred
during the conduct of its operating
activities. These provisions were
included in current liabilities
as the impairments were of a
temporary nature and were rectified
through subsequent maintenance
expenditure. This practice is no
longer permissible in terms of AC128.
The effect of this change is set out
below:
Impairment provisions at beginning
of the year reversed to income 36,352
Major maintenance expenditure in
respect of these provisions charged
to income 35,854
2.3 Provisions have been accounted for
in accordance with AC130. This has
resulted in an adjustment to opening
retained income as disclosed in the
statement of changes in equity as
follows:
Reversal of excess provisions
brought forward 2,117
Reversal of deferred tax on
excess provisions (639)
Prior year figures have not
been restated.
3. Investment and loans
Directors' valuation of
investments and loans
Unlisted shares 802 2,373 279
Loans 6,231 6,268 10,243
7,033 8,641 10,522
4. Supplementary Information
Cost of inventories utilised 707,393 621,123 1,268,453
Depreciation 15,071 13,595 31,960
Operating lease charges 3,645 3,280 6,129
Capital expenditure 60,679 27,104 76,519
- expansion 48,140 10,354 48,754
- replacement 12,539 16,750 27,765
Capital commitments 49,312 57,151 91,021
- contracted 16,869 14,637 23,049
- approved 32,443 42,514 67,972
- Contingent liabilities 4,744 6,000 4,744
COMMENTS
Financial Results
Headline earnings for the six months ended 31 March 2001 increased by 18% over
those of the first half of the previous year and by 17% on a per share basis.
Group operating profit improved by 24% on a turnover increase of 19%.
An interim dividend of 13 cents per share has been declared which represents an
increase of 18% over the previous year.
Review of operations
The Lucky Star brand further improved its local market share and the Chakalaka
and Sardine extensions to the brand were launched during the year. In addition
exports of canned pilchard by Federal Marine were higher than the previous
year. As a result of these improved sales, cannery production volumes were
above those of last year.
Fish meal profitability improved due to higher prices and increased volumes.
Lobster earnings in South Africa benefited from an increased proportion of live
product, good catches of West Coast lobster and improved prices for both West
and South Coast lobster. The Group's lobster expansion into Australia has been
successful and earnings are in line with forecast.
Market conditions for horse mackerel improved and volumes traded out of
Namibia, South Africa and the North Atlantic region increased.
The Blue Ocean Products hake joint venture in Walvis Bay commenced operations
in January. Significant investment has been made in fishing trawlers and
processing plant, demonstrating the Group's ongoing commitment to developing
its fishing interests in Namibia.
The french fries business was negatively affected by the poor quality of
potatoes available during most of the reporting period. Turnover volumes
improved over those of the comparative period.
Abalone landings have been good and export prices remain high. Squid and tuna
catches, however, have been disappointing.
Average occupancy levels at Commercial Cold Storage were higher than those of
the previous year. Stevedoring operations in both Walvis Bay and Cape Town
recorded improved earnings.
Profitability at TRT Shipping Services improved, due mainly to excellent bunker
trading.
Prospects
Further growth in the Lucky Star brand is forecast. The cannery in St Helena
Bay will benefit from increased volumes if the full pilchard TAC is landed.
The improved fish meal prices experienced in the first half are expected to be
maintained. Anchovy catches have been encouraging and the Group expects to
land increased volumes this season.
Lobster earnings in South Africa and Australia are expected to remain strong
due to firm demand, favourable exchange rates and optimisation of live lobster
sales.
The new hake operations in Namibia and South Africa are unlikely to contribute
towards profitability until the new financial year.
International markets in the Far East, Europe and USA remain positive which
should benefit the abalone, squid, hake and tuna operations.
The horse mackerel businesses in Namibia, South Africa and Mauritania are
expected to perform well with favourable market conditions forecast.
Overall the Group expects to achieve a good increase in operating profit and
headline earnings for the full year.
On behalf of the board.
DMJ Ncube A B Marshall
Chairman Managing Director
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