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Oceana Group Limited - Interim report and dividend declaration
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
JSE Share Code: OCE
ISIN Number: ZAE000025284
NSX Share Code: OCG
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2005
The unaudited results of the group for the six months ended 31 March 2005 are
set out herein.
This report has been prepared in compliance with South African Statements of
Generally Accepted Accounting Practice applicable to Interim Financial Reporting
and 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* (Chief
Executive Officer), M A Brey, B P Connellan, N Dennis, LT Langeni*,
R G Nicol*, S Pather, R V Smither. (*Executive)
Company Secretary: J D Cole
GROUP INCOME STATEMENT Unaudited Audited
Six months ended Year ended
31 March 30 Sept
Restated
2005 2004 Change 2004
Note R"000 R"000 % R"000
Revenue 1 1,230,712 1,154,447 (7) 2,487,502
Operating profit before
abnormal items 54,926 111,219 (51) 221,483
Abnormal items 2 (26,863) 633 4,949
Operating profit 28,063 111,852 226,432
Dividends received 1 2,976 2,976
Net interest received 12,435 9,708 16,617
Profit before taxation 40,499 124,536 (67) 246,025
Taxation 17,042 42,113 (60) 78,522
Profit after taxation 23,457 82,423 167,503
Attributable to outside
shareholders in subsidiaries 1,496 1,266 3,123
Attributable to own
shareholders 21,961 81,157 (73) 164,380
Number of shares in
issue (000"s) 111,720 109,549 109,976
Weighted average number of shares
on which earnings per share and
headline earnings per share are
based (000"s) 111,467 109,390 109,530
Adjusted weighted average
number of shares on which diluted
earnings per share and diluted
headline earnings per share are
based (000"s) 111,663 111,969 111,670
Earnings per share (cents)
Basic 19.7 74.2 (73) 150.1
Diluted 19.5 72.5 (73) 147.2
Headline earnings per share (cents)
Basic 31.0 72.2 (57) 143.8
Diluted 30.7 70.6 (57) 141.1
Dividends per share (cents) 15.0 17.5 (14) 76.5
DETERMINATION OF HEADLINE EARNINGS
Attributable to own shareholders 21,961 81,157 164,380
Adjusted for:
Impairment loss on property
plant and equipment in Namibian
whitefish business 5,580 160 160
Loan provision, staff retrenchment
and other closure costs in Namibian
whitefish business 10,115 0 0
Surplus on disposal of property,
plant and equipment (2,002) (2,288) (6,567)
Profit on change of interest in
subsidiaries/joint ventures (1,125) 0 (416)
Headline earnings for ______ ______ _______
the period 34,529 79,029 (56) 157,557
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend No. 123 of 15.0 cents per share,
in respect of the year ending 30 September 2005, was declared on Thursday 5 May
2005. Relevant dates are as follows:
Last day to trade cum dividend - Friday 24 June 2005.
Commence trading ex dividend - Monday 27 June 2005.
Record date - Friday 1 July 2005.
Dividend payable - Monday 4 July 2005.
Share certificates may not be dematerialised or re-materialised between
Monday 27 June 2005 and Friday 1 July 2005, both dates inclusive.
By order of the board
J D Cole Secretary
5 May 2005
Registered Office: 16th Floor, Metropolitan Centre, 7 Coen Steytler Avenue,
Cape Town 8001
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(P.O. Box 61051, Marshalltown, 2107)
Sponsor: The Standard Bank of South Africa Limited
STATEMENT OF CHANGES IN EQUITY
Unaudited Audited
Six months ended Year ended
31 March 30 Sept
2005 2004 2004
R"000 R"000 R"000
Balance at the beginning of
the period 848,613 768,863 768,863
Shares issued 11,881 6,899 8,630
Increase in treasury shares
held by share trust (75) (41) (128)
Movement on foreign currency
translation reserve (921) (1,359) (9,567)
Net profit for the period 21,961 81,157 164,380
Profit on sale of treasury shares 189 86 250
Dividends (65,895) (64,576) (83,815)
Balance at the end of the period 815,753 791,029 848,613
GROUP BALANCE SHEET
Unaudited Audited
31 March 30 Sept
2005 2004 2004
R"000 R"000 R"000
Assets
Non current assets 415,268 462,233 460,496
Property, plant and equipment 293,159 309,550 310,389
Goodwill 18,219 19,279 18,581
Fishing Rights, trademarks 36,195 38,191 35,397
Deferred taxation 17,424 17,414 20,990
Investments and loans 50,271 77,799 75,139
Current assets 901,136 856,070 1,011,406
Inventories 216,815 280,368 309,288
Accounts receivable 454,066 466,409 502,380
Cash and cash equivalents 230,255 109,293 199,738
_______ _______ _______
Total assets 1,316,404 1,318,303 1,471,902
Equity and liabilities
Capital and reserves 815,753 791,029 848,613
Share capital and premium 53,202 39,752 41,396
Non-distributable reserves 12,009 21,138 12,930
Distributable reserves 750,542 730,139 794,287
Interest of outside
shareholders 15,645 13,104 14,577
Non-current liabilities
Deferred taxation 20,809 12,708 24,287
Current liabilities 464,197 501,462 584,425
Bank overdraft 23,248 44,137 82,283
Accounts payable and provisions 440,949 457,325 502,142
_______ _______ _______
Total equity and liabilities 1,316,404 1,318,303 1,471,902
Net asset value per ordinary
share (cents) 730 722 772
Total liabilities excluding
deferred taxation: Total shareholders
funds (%) 56 62 68
Total borrowings: Total shareholders
funds (%) 3 5 10
GROUP CASH FLOW STATEMENT
Unaudited Audited
Six months ended Year ended
31 March 30 Sept
2005 2004 2004
R"000 R"000 R"000
Cash flows from operating activities
Operating profit 54,926 111,219 221,483
Adjustment for non cash items 25,515 25,676 57,822
_______ ________ _______
Cash operating profit before working
capital changes 80,441 136,895 279,305
Working capital changes 77,350 (34,654) (55,860)
_______ ________ _______
Cash generated from operations 157,791 102,241 223,445
Interest and dividends received 12,771 14,574 23,876
Interest paid (335) (1,890) (4,283)
Taxation paid (22,222) (65,332) (104,766)
Dividends paid (66,707) (67,224) (86,464)
________ ________ ________
Net cash inflow/(outflow) from
operating activities 81,298 (17,631) 51,808
Cash outflow from investing
activities (10,956) (130,806) (156,561)
_______ ________ ________
Net cash inflow/(outflow)
before financing activities 70,342 (148,437) (104,753)
Net cash flows from financing
activities 16,602 6,943 18,459
_______ ________ ________
Net increase/(decrease) in cash
and cash equivalents 86,944 (141,494) (86,294)
Cash resulting from acquisition
of business 0 2,662 2,662
Cash and cash equivalents at the
beginning of the period 117,455 205,040 205,040
Effect of exchange rate changes 2,608 (1,052) (3,953)
_______ _______ ________
Cash and cash equivalents at the
end of the period 207,007 65,156 117,455
SEGMENT REPORT
Unaudited Audited
31 March 30 Sept
Restated
2005 2004 2004
R"000 R"000 R"000
Revenue
Inshore Fishing 662,211 579,953 1,240,929
Midwater and Deepsea Fishing 503,904 519,187 1,100,298
Commercial Cold Storage and Logistics 64,597 55,307 146,275
_______ ________ ________
Total 1,230,712 1,154,447 2,487,502
Operating profit before abnormal items
Inshore Fishing 30,037 55,496 130,072
Midwater and Deepsea Fishing 7,545 43,786 44,590
Commercial Cold Storage and Logistics 17,344 11,937 46,821
_______ ________ _______
Total 54,926 111,219 221,483
Total assets
Inshore Fishing 537,600 611,494 606,007
Midwater and Deepsea Fishing 299,543 345,108 385,718
Commercial Cold Storage and Logistics 181,311 157,195 184,310
Financing 280,526 187,092 274,877
1,298,980 1,300,889 1,450,912
Deferred taxation 17,424 17,414 20,990
Total 1,316,404 1,318,303 1,471,902
Total liabilities
Inshore Fishing 261,325 299,257 294,890
Midwater and Deepsea Fishing 98,216 84,773 117,850
Commercial Cold Storage and Logistics 81,408 73,295 89,402
Financing 23,248 44,137 82,283
464,197 501,462 584,425
Deferred taxation 20,809 12,708 24,287
Total 485,006 514,170 608,712
NOTES
Unaudited Audited
31 March 30 Sept
Restated
2005 2004 2004
R"000 R"000 R"000
1. Change in accounting policy
Since September 2004 revenue is
disclosed after deducting normal
rebates and discounts, whereas the
gross amount was previously shown.
The effect of this change is set
out below:
Revenue as previously reported 1,190,926
Less: discounts and rebates 36,479
As restated 1,154,447
2. Abnormal items
Impairment loss on property, plant
and equipment in Namibian whitefish
business. (5,580) 0 0
Provision for loans, staff retrenchment
and other closure costs in Namibian
whitefish business. (24,682) 0 0
Surplus on disposal of property, plant
and equipment. 2,075 633 5,072
Profit/(Loss) on change of interest in
subsidiary/joint ventures. 1,324 0 (123)
Abnormal (loss)/profit before taxation (26,863) 633 4,949
Taxation (199) 0 (88)
Abnormal (loss)/profit attributable
to own shareholders (27,062) 633 4,861
3. Dividends
Dividend declared after reporting
date 16,758 19,171 64,886
4. Supplementary information
Cost of sales 888,290 786,857 1,704,794
Depreciation 26,375 26,670 58,036
Amortisation of goodwill and other
intangibles 0 617 1,190
Operating lease charges 8,470 4,800 15,669
Foreign exchange profit (271) (392) (5,488)
Capital expenditure 17,957 58,362 93,300
Expansion 2,510 39,202 57,144
Replacement 15,447 19,160 36,156
Capital commitments 46,375 52,764 70,908
Contracted 13,532 24,516 2,246
Approved 32,843 28,248 68,662
Contingent liabilities 0 1,489 0
COMMENTS
Financial Results
Headline earnings per share for the six months ended 31 March 2005 decreased by
57% compared to those of the first half of the previous year. Earnings per
share for the same period were 73% lower than the previous year as a result of
asset impairments, loan provisions and other costs of closure in the Namibian
whitefish operations disclosed in abnormal items. Certain of the aforementioned
items were added back in the calculation of headline earnings.
Group turnover increased by 7% whilst operating profit before abnormal items
declined by 51%. The effective tax rate was negatively impacted by the non tax
deductibility of abnormal losses in the Namibian whitefish companies.
Net cash balances increased by R89 million since year end mainly as a result of
the reduction in inventories.
An interim dividend of 15.0 cents per share has been declared. (2004: 17.5 cents
per share).
Review of operations
Inshore Fishing
Although the Total Allowable Catch (TAC) for 2005 was reduced to 397 000 tons
(2004: 457 000 tons) the pilchard biomass in SA waters remains healthy. Pilchard
landings to the cannery at St Helena Bay were lower than last year due to a late
start to the season and fish being available only on the south coast. Pilchard
fishing in Namibia commenced in April against a provisional TAC of 20 000 tons
(2004: final TAC 25 000 tons).
Sales volumes of canned fish on the domestic market under the Lucky Star brand
increased appreciably over the previous year although margins were lower as a
result of price discounting in a very competitive market. Glenryck UK (acquired
on 31 March 2004) performed well and provides an important market for canned
fish produced in South Africa and Namibia.
Overall, profitability from canned fish was lower than the same period last
year.
The fish meal operations recorded a loss for the six months mainly due to lower
sales volumes and prices. Industrial landings were reasonable and indications
are that winter catches will be good.
Export prices for lobster improved on last year, however, realisations in rand
terms were lower due to the stronger rand exchange rate. Catches were delayed in
the early part of the season due to late moulting of the lobster. This resulted
in earnings from lobster being lower than the same period last year. The group
expects to land its full lobster quota by the end of the season.
Midwater and Deep-sea Fishing
Selling prices for Namibian horse mackerel were at low levels which together
with poor fishing in South Africa resulted in a reduced profit contribution.
Trading activity in fish sourced from the North Atlantic resulted in a similar
contribution to that of the previous year.
The Group"s earnings from hake were negatively affected by inconsistent catches,
a large proportion of small fish, weak export markets and the strong rand
exchange rate.
Market prices for squid remained soft during the period and the business made a
significantly lower contribution to profit. Tuna trading recorded a loss. This
business has since been restructured and refocused and is expected to return to
profitability during the second half of the year.
Cold Storage and Logistics
Average occupancy levels in the cold storage division benefited from increased
import activity and profits were substantially higher than those of last year. A
meaningful contribution is expected from the Maydon Wharf steri-fruit facility
in the second half of the year.
Draft Policy for the Allocation of Long Term Commercial Fishing Rights
The draft policy issued in March contains a number of provisions which in the
Group"s view, if implemented in its current form, would lead to instability in
the fishing industry, a loss of employment opportunities and destruction of
economic value and will lead to legal challenges. Oceana has submitted its
comments on the draft policy to the Department of Environmental Affairs and
Tourism and it is expected that the final policy will be announced in May. The
application and allocation process for long term rights is scheduled to be
completed by the end of the year.
Directorate
In April Mr DF Behrens resigned as a director and Mr LT Langeni was appointed.
Prospects
Headline earnings for the second half are expected to significantly exceed those
of the first half. However, the Group does not expect to achieve the same
headline earnings per share for the full year as it did in the prior year.
On behalf of the board.
DMJ Ncube AB Marshall
Chairman Chief Executive Officer
5 May 2005
Date: 05/05/2005 03:42:30 PM Supplied by www.sharenet.co.za
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