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Condensed Unaudited Interim Report and Dividend Declaration for the six month
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration number 1939/001730/06
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
("Oceana" or "the Company" or "the Group")
CONDENSED UNAUDITED INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2016
The condensed unaudited interim results of the group for the six months ended 31 March 2016 are set out herein.
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited six Unaudited six Audited
months ended months ended year ended
31 Mar 31 Mar 30 Sep
2016 2015 Change 2015
Notes R'000 R'000 % R'000
Revenue 3 602 270 2 566 132 40 6 168 777
Cost of sales 2 314 888 1 635 734 42 3 832 997
Gross profit 1 287 382 930 398 38 2 335 780
Sales and distribution expenditure 263 187 238 962 10 513 241
Marketing expenditure 33 319 30 063 11 69 775
Overhead expenditure 472 861 327 755 44 812 148
Net foreign exchange gain (69 909) (7 684) (40 542)
Operating profit before associate and joint
venture (loss)/income 587 924 341 302 72 981 158
Associate and joint venture (loss)/income (1 013) 10 636 (110) 26 097
Operating profit before abnormal items 586 911 351 938 67 1 007 255
Abnormal items 3 13 363 (11 191) 18 346
Operating profit 600 274 340 747 76 1 025 601
Investment income 12 886 22 520 61 558
Interest paid (176 020) (27 303) (158 442)
Profit before taxation 437 140 335 964 30 928 717
Taxation 150 184 100 457 50 286 515
Profit after taxation 286 956 235 507 22 642 202
Other comprehensive income
Movement on foreign currency translation reserve 255 101 (138) 432 332
Movement on cash flow hedging reserve (36 477) 10 729 23 511
Movement on fuel hedging reserve 1 757 (1 757)
Other comprehensive income, net of taxation 220 381 10 591 454 086
Total comprehensive income for the period 507 337 246 098 106 1 096 288
Profit after taxation attributable to:
Shareholders of Oceana Group Limited 271 891 225 836 20 611 224
Non-controlling interests 15 065 9 671 56 30 978
286 956 235 507 22 642 202
Total comprehensive income for the period
attributable to:
Shareholders of Oceana Group Limited 492 272 236 427 108 1 065 310
Non-controlling interests 15 065 9 671 56 30 978
507 337 246 098 106 1 096 288
Weighted average number of shares on which earnings
per share is based (000's) 10 116 617 103 390 104 005
Adjusted weighted average number of shares on
which diluted earnings per share is based (000's) 128 064 114 403 114 959
Earnings per share (cents)
Basic* 233.1 218.4 7 587.7
Diluted* 212.3 197.4 8 531.7
Dividends per share (cents) 112.0 106.0 6 365.0
Headline earnings per share (cents) 7
Basic* 230.8 218.0 6 588.2
Diluted* 210.2 197.0 7 532.2
*Earnings per share for the prior year comparative has been restated due to the rights offer in the prior year, as required by IAS 33: Earnings per share.
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited six Unaudited six Audited year
months ended months ended ended
31 Mar 31 Mar 30 Sep
2016 2015 2015
Notes R'000 R'000 R'000
ASSETS
Non-current assets 6 793 839 1 235 580 6 502 886
Property, plant and equipment 1 585 900 680 994 1 537 293
Intangible assets 4 709 566 249 098 4 469 232
Derivative asset 5 18 225
Deferred taxation 32 486 21 761 25 583
Investments and loans 447 662 283 727 470 778
Current assets 3 492 073 3 170 264 3 970 700
Inventories 1 372 794 953 862 1 316 266
Accounts receivable 1 558 249 974 857 1 473 161
Cash and cash equivalents 561 030 1 241 545 1 181 273
Non-current assets held for sale 89 358 39 478
Total assets 10 375 270 4 405 844 10 513 064
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1 187 569 35 245 1 187 399
Foreign currency translation reserve 699 141 11 570 444 040
Capital redemption reserve 130 130 130
Cash flow hedging reserve (11 124) 12 571 25 353
Fuel hedging reserve (1 757)
Share-based payment reserve 86 833 70 444 73 111
Distributable reserve 1 709 370 1 499 033 1 755 638
Interest of own shareholders 3 671 919 1 628 993 3 483 914
Non-controlling interests 79 802 61 827 80 372
Total capital and reserves 3 751 721 1 690 820 3 564 286
Non-current liabilities 5 023 430 840 417 5 000 698
Liability for share-based payments 88 670 59 485 86 147
Long-term loan 4 364 695 680 985 4 374 483
Derivative liability 6 224 550 209 963
Deferred taxation 345 515 99 947 330 105
Current liabilities 1 576 007 1 874 607 1 948 080
Accounts payable and provisions 1 510 953 745 037 1 625 574
Taxation 49 122 26 566 322 506
Bank overdrafts 15 932 1 103 004
Non-current liabilities held for sale 24 112
Total equity and liabilities 10 375 270 4 405 844 10 513 064
Number of shares in issue net of treasury shares (000's) 116 627 100 512 116 588
Net asset value per ordinary share (cents) 3 148 1 621 2 988
Total liabilities excluding deferred taxation: Total equity (%) 167 155 180
Total borrowings: Total equity (%) 117 106 123
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited six Unaudited six Audited year
months ended months ended ended
31 Mar 31 Mar 30 Sep
2016 2015 2015
R'000 R'000 R'000
Balance at the beginning of the period 3 564 286 1 746 906 1 746 906
Total comprehensive income for the period 507 337 246 098 1 096 288
Profit after taxation 286 956 235 507 642 202
Movement on foreign currency translation reserve 255 101 (138) 432 332
Movement on cash flow hedging reserve (36 477) 10 729 23 511
Movement on fuel hedging reserve 1 757 (1 757)
Shares issued 1 150 997
Recognition of share-based payments 13 722 5 249 7 917
Movement in treasury shares held by share trusts 172 1 157
Profit on sale of treasury shares 504 1 078
Disposal of interest in subsidiary 102
Additional non-controlling interest arising on acquisition 2 807 2 807
Distribution to Oceana Empowerment Trust beneficiaries (15 469)
Oceana Empowerment Trust dividend distribution (16 637) (25 506)
Dividends paid (317 765) (310 240) (401 889)
Balance at the end of the period 3 751 721 1 690 820 3 564 286
Comprising:
Share capital and premium 1 187 569 35 245 1 187 399
Foreign currency translation reserve 699 141 11 570 444 040
Capital redemption reserve 130 130 130
Cash flow hedging reserve (11 124) 12 571 25 353
Fuel hedging reserve (1 757)
Share-based payment reserve 86 833 70 444 73 111
Distributable reserve 1 709 370 1 499 033 1 755 638
Non-controlling interests 79 802 61 827 80 372
Balance at the end of the period 3 751 721 1 690 820 3 564 286
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited six Unaudited six Audited year
months ended months ended ended
31 Mar 31 Mar 30 Sep
2016 2015 2015
Notes R'000 R'000 R'000
Cash flow from operating activities
Operating profit before joint venture (loss)/income 587 924 341 302 981 158
Adjustment for non-cash and other items 153 012 41 645 206 716
Cash operating profit before working capital changes 740 936 382 947 1 187 874
Working capital changes (339 966) (153 287) (92 760)
Cash generated from operations 400 970 229 660 1 095 114
Investment income received 70 913 21 868 59 264
Interest paid (166 949) (27 303) (158 442)
Taxation paid (531 298) (124 484) (221 986)
Distribution to employee beneficiaries of Oceana
Empowerment Trust (15 469)
Dividends paid (334 402) (310 240) (427 395)
Cash (outflow)/inflow from operating activities (576 235) (210 499) 346 555
Cash outflow from investing activities (98 239) (372 530) (4 747 216)
Capital expenditure (100 061) (75 264) (160 613)
Replacement of intangible assets (4 361) (3 429)
Proceeds on disposal of property, plant and equipment 958 507 12 909
Proceeds on disposal of non-current assets held for sale 44 705
Repayment received on preference shares 31 426 105 049
Net movement on loans and advances (30 570) (75 490) (97 099)
Acquisition of business 4 (251 478) (4 544 426)
Acquisition of additional shares in subsidiary (1 276)
Acquisition of fishing rights (2 812) (2 812)
Increased contribution/acquisition of a joint venture (9 279) (56 321)
Disposal of interest in subsidiary 369
Decrease of investment 581 802
Cash (outflow)/inflow from financing activities (10 563) 380 732 5 146 173
Proceeds from issue of share capital 676 1 154 615
Long-term loan (repaid)/raised (142 670) 380 985 4 025 301
Short-term borrowings raised/(repaid) 150 000 (253) (33 743)
Cost associated with debt raising (18 569)
Net (decrease)/increase in cash and cash equivalents (685 037) (202 297) 745 512
Cash and cash equivalents at the beginning of the period 1 181 273 344 003 344 003
Effect of exchange rate changes 48 862 (3 165) 91 758
Cash and cash equivalents at the end of the period 545 098 138 541 1 181 273
NOTES
1. Basis of preparation and accounting policies
The condensed consolidated interim financial information has been prepared in accordance with and containing the
information required by IAS 34: Interim Financial Reporting as well as the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the JSE Listings Requirements and the requirements of the South African Companies Act, 71 of
2008. The condensed consolidated interim financial statements have been prepared using accounting policies that comply
with IFRS which are consistent with those applied in the financial statements for the year ended 30 September 2015,
except for the adoption of accounting standards and interpretations that became effective during the current period. The
adoption of these standards and interpretations had no material impact on the Group. The condensed financial information
was prepared under the supervision of the Group financial director, I Soomra CA(SA).
The results have not been audited or reviewed by the Group's auditors, Deloitte & Touche.
Unaudited Unaudited
six months six months Audited year
ended ended ended
31 Mar 31 Mar 30 Sep
2016 2015 2015
R'000 R'000 R'000
2. Segmental results
Revenue
Canned fish and fishmeal (Africa) 1 899 793 1 580 611 3 408 988
Fishmeal and fish oil (USA) 705 682 574 328
Horse mackerel and hake 562 302 588 824 1 314 747
Lobster, squid and French fries 218 509 227 857 412 147
Commercial cold storage 215 984 168 840 458 567
Total 3 602 270 2 566 132 6 168 777
Operating profit before abnormal items
Canned fish and fishmeal (Africa) 193 525 167 065 452 504
Fishmeal and fish oil (USA) 190 801 179 612
Horse mackerel and hake 109 522 108 998 211 020
Lobster, squid and French fries 27 125 34 772 46 574
Commercial cold storage 65 938 41 103 117 545
Total 586 911 351 938 1 007 255
Total assets
Canned fish and fishmeal (Africa) 2 422 988 1 702 782 2 069 746
Fishmeal and fish oil (USA) 6 215 182 6 026 066
Horse mackerel and hake 589 487 844 356 679 403
Lobster, squid and French fries 132 933 148 516 125 703
Commercial cold storage 279 363 249 228 294 642
Financing 702 831 1 439 201 1 291 921
10 342 784 4 384 083 10 487 481
Deferred taxation 32 486 21 761 25 583
Total 10 375 270 4 405 844 10 513 064
Total liabilities
Canned fish and fishmeal (Africa) 444 987 540 938 700 772
Fishmeal and fish oil (USA) 444 052 934 466
Horse mackerel and hake 270 904 162 559 175 755
Lobster, squid and French fries 49 402 56 182 43 854
Commercial cold storage 128 155 46 177 88 507
Financing 4 940 534 1 809 221 4 675 319
6 278 034 2 615 077 6 618 673
Deferred taxation 345 515 99 947 330 105
Total 6 623 549 2 715 024 6 948 778
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 Mar 31 Mar 31 Sep
2016 2015 2015
R'000 R'000 R'000
Revenue per region(1)
South Africa and Namibia 2 160 864 1 960 328 3 937 878
Other Africa 246 623 208 809 476 096
North America 692 034 214 400 470
Europe 221 179 191 642 710 302
Far East 237 626 184 988 546 955
Other 43 944 20 151 97 076
Total 3 602 270 2 566 132 6 168 777
Non-current asset per region(2)
South Africa and Namibia 835 122 930 092 863 285
North America 5 460 344 5 143 240
Total 6 295 466 930 092 6 006 525
Notes:
(1) Revenue per region discloses the region in which product is sold.
(2) Non-current asset per region discloses where the subsidiary is located.
3. Abnormal items
Transaction costs 1 500 11 191 80 815
Forex gain on transaction (97 734)
Profit on the disposal of immovable property (1 537)
Impairment of equipment 110
Loss on disposal of property, plant and equipment 3 527
Profit on disposal of non-current assets held for sale (18 390)
Total (13 363) 11 191 (18 346)
4. Acquisition of business
4.1 Foodcorp acquisition
On 2 February 2015, the Group acquired hake, pelagic and lobster fishing rights and related assets from Foodcorp
Proprietary Limited for a consideration of R355 million. Foodcorp Proprietary Limited was acquired to enhance the Group's
hake, pelagic and lobster footprint.
Assets acquired and liabilities recognised at date of acquisition:
Property, plant and equipment 148 037 148 037
Intangible asset 128 277 90 890
Goodwill 35 918 62 835
Accounts receivables 26 745 26 745
Taxation 97 97
Inventories 39 815 39 815
Cash and cash equivalents 52 899 52 899
Non-controlling interest (2 807) (2 807)
Deferred taxation (37 309) (26 840)
Short-term loan (170) (170)
Provisions (2 114)
Trade and other payables (36 125) (34 011)
Total purchase price 355 377 355 376
Less: Purchase consideration outstanding (51 000)
Consideration paid in cash 304 377 355 376
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 Mar 31 Mar 31 Sep
2016 2015 2015
R'000 R'000 R'000
Net cash flow on acquisition of business
Consideration paid in cash 304 377 355 376
Less: Cash and cash equivalents balances acquired (52 899) (52 899)
251 478 302 477
Goodwill on acquisition
Consideration 355 377 355 376
Less: Fair value of identifiable assets acquired and liabilities assumed (319 459) (292 541)
35 918 62 835
The goodwill arising on the acquisition is attributable to the processing locations, as well as knowledgeable employees that
did not meet the criteria for recognition as other intangible assets on the date of acquisition.
4.2 Daybrook acquisition
On 30 June 2015, the Group acquired an effective 100% beneficial shareholding in Daybrook Fisheries for a consideration
of R4 641 million. Daybrook was acquired to enhance the Group's operations internationally in order to diversify its fishing
rights and licences, fish species, operational geography and currency exposure.
The fair value of the acquired intangible assets and goodwill is provisional as at the 31 March 2016 due to the uncertainty of
the manner in calculating the fair value and will be finalised on the determination of the purchase price allocation. The
provisional fair value of the identifiable assets and liabilities are shown below.
Assets acquired and liabilities recognised at date of acquisition:
Property, plant and equipment 784 444
Intangible asset 503 976
Investments in associate 127 733
Goodwill 3 191 027
Accounts receivables 250 522
Taxation (212 441)
Inventories 322 678
Cash and cash equivalents 399 304
Provisions (160 344)
Deferred taxation (216 482)
Derivative liability (182 475)
Trade and other payables (166 689)
Consideration paid in cash 4 641 253
Net cash flow on acquisition of business
Consideration paid in cash 4 641 253
Less: Cash and cash equivalents balances acquired (399 304)
4 241 949
Goodwill on acquisition
Consideration 4 641 253
Less: Fair value of identifiable assets acquired and liabilities assumed (1 450 226)
3 191 027
The goodwill arising on the acquisition is attributable to the strategic business advantages acquired, key fishing and
processing locations, as well as knowledgeable employees and management strategies that did not meet the criteria for
recognition as other intangible assets on the date of acquisition.
5. Derivative asset
The derivative assets relates to interest rate caps, executed on 17 March 2016, the notional principal amount of the
interest rate caps amounts to R18,5 million. This comprises hedges on the debt of R980,0 million. These caps are to
hedge the interest that is payable under the various debt facilities. Gains and losses on interest rate caps held as hedging
instruments in designated and effective hedging relationships are recognised in other comprehensive income and are
reclassified in the same period that the hedge cash flows affect profit and loss.
6. Derivative liability
The derivative liability is relates to the put option (USD15,0 million) between Daybrook Fisheries and the remaining
shareholders of Westbank Fishing LLC.
In terms of the Westbank Fishing LLC Agreement, notification of exercise of the put option can only be provided, at the
earliest, during the second financial period following the transaction, following which the exercise will only be effective
12 months after the date of such notification. Should the put option be effectively exercised as described, there will be a cash
outflow being the put option strike price of USD31,5 million plus the put premium of USD15,0 million (payable only if the
put option is exercised within three years) as well as any unpaid distributions, while there will be a cash inflow, based on
prevailing market values, from the new shareholder acquiring the 75% shareholding. When the put option is exercised the
fair value of the put option liability will be derecognised from the statement of financial position and a corresponding entry
will be made to reflect the cash payment. In the event that the put option is not exercised the fair value of the put option
liability will be derecognised through profit and loss.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 Mar 31 Mar 31 Sep
2016 2015 2015
R'000 R'000 R'000
7. Determination of headline earnings and adjusted headline earnings
Profit after taxation attributable to shareholders of Oceana Group Limited 271 891 225 836 611 224
Adjusted for:
Profit on disposal of immovable property (1 537)
Headline earnings adjustments – joint ventures 99
Net loss/(profit) on disposal of property, plant, equipment and
intangible assets 2 676 (265) (1 293)
Profit on disposal of non-current assets held for sale (8 847)
Profit on change of interest in investment (381) (500)
Loss on the dissolution of foreign subsidiary 3 455
Impairment of equipment 110
Total tax effect of adjustments 3 409 161 220
Headline earnings for the period 269 129 225 351 611 778
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 Mar 31 Mar 31 Sep
2016 2015 2015
R'000 R'000 R'000
8. Dividends
Estimated dividend declared after reporting date 130 622 106 543 301 964
9. Supplementary information
Amortisation 39 889 12 260 40 748
Depreciation 94 605 54 328 136 423
Operating lease charges 26 013 23 054 75 559
Capital expenditure 104 422 75 264 164 042
Expansion 11 635 35 281 57 424
Replacement 92 787 39 983 106 618
Budgeted capital commitments 162 191 167 363 218 686
Contracted 68 612 24 978 34 297
Not contracted 93 579 142 385 184 389
Number of Number of Number of
shares shares shares
10 Elimination of treasury shares '000 '000 '000
Weighted average number of shares in issue 135 526 119 526 120 227
Plus: Bonus issue on rights offer 2 878 2 775
Less: Shares held by share trusts (13 815) (13 920) (13 903)
Less: Treasury shares held by subsidiary company (5 094) (5 094) (5 094)
Weighted average number of shares on which earnings per share and
headline earnings per share are based 116 617 103 390 104 005
Weighted average number of shares for the prior year comparative has been restated by 2 878 due to the rights offer in the
prior year, as required by IAS 33: Earnings per share.
11. Contingent liabilities and guarantees
The Company and its subsidiaries have given cross suretyships in support of bank overdraft facilities of certain subsidiaries
and the Company. The Company and six subsidiaries has guaranteed the loan of R4 453 million (2015: R4 374 million).
12. Events after the reporting date
Subsequent to the reporting period the Commercial cold storage business disposed of its fruit refrigeration and handling business
operated from Maydon Warf and Maydon Warf Fruit Terminal, disclosed under non-current assets held for sale. The
transaction was completed on the 25 April 2016. No other events occurred that may have an impact on the Group's
reported financial position at 31 March 2016.
COMMENTS
GROUP OVERVIEW
The performance of the group for the six months ended 31 March 2016 has been positive. Daybrook and Foodcorp have been
successfully integrated and both have performed in line with expectations. Increased SA canned fish and hake volumes, higher
occupancy levels in the Commercial cold storage business and the effect of a favourable exchange rate have contributed to growth.
Revenue grew by 40%, increasing to R3 602 million from R2 566 million in 2015. Excluding the impact of Daybrook, the group achieved
revenue growth of 13%.
Operating profit before abnormal items increased by 67% to R587 million (2015: R352 million) over the period and excluding
Daybrook by 13%.
Cash flow from operations increased by 75% to R401 million (2015: R230 million).
Net interest charged for the period is R176.0 million (2015: R27.3 million) primarily due to finance costs incurred on additional
working capital facilities and increased long term debt. The average interest rate for all debt is currently 6.7% per annum.
Group headline earnings for the period increased by 19%. As a result of the diluting effect of the additional shares issued during
September 2015, basic earnings per share and basic headline earnings per share increased by 7% and 6% respectively.
An interim dividend of 112 cents per share has been declared (2015: 106 cents per share).
REVIEW OF OPERATIONS
Canned fish and fishmeal (Africa)
The initial 2016 South African Total Allowable Catch ("TAC") for pilchard decreased to 64 563 tons (final 2015: 83 470 tons).
The Namibian pilchard TAC for 2016 decreased to 14 000 tons (2015: 25 000 tons).
Revenue growth of canned fish for the six months has been achieved through a 10% growth in sales volumes combined with
the effect of an 8% price increase from February 2015. SA volume growth of 13% for the six months has been driven by an
improved pricing and marketing strategy.
The adverse impact of the exchange rate on imported canned fish has been partially offset by a reduction in dollar pricing
and the effect of processing a higher proportion of frozen fish at our own production facilities in South Africa and Namibia.
Operational efficiencies in supply chain, initiated in the prior period, have delivered further benefit for the period.
As a result, canned fish delivered an improved operating profit for the period.
The 2016 initial South Africa anchovy A season TAC is 254 483 tons (final A season TAC for 2015: 450 000 tons). Current
season landings of industrial fish to the group's fishmeal plants were 15% higher than the previous season primarily due to
the addition of two new sites, the first arising from the Foodcorp acquisition and the other a greenfields expansion in Angola.
The Angolan fishmeal plant was commissioned in December 2015 and is producing fishmeal and fish oil. Losses from fishmeal
operations were above that for the prior year due to lower opening stock resulting from reduced catches at the end of the 2015
fishing season. As the period under review coincides with a significant portion of the closed season, pre-season costs for the
period have increased due to the number of additional plants.
Fishmeal and fish oil (USA)
Daybrook performed well for the six month period with revenue of R706 million and operating profit before abnormal items of
R191 million. The 2015 Gulf Menhaden fishing season ended on 30 October 2015 and as a result five of the six months under
review have been outside of the fishing season. During this time the plant and vessels are shut down to undergo maintenance.
Sales volumes of 21 437 tons of fishmeal and 6 373 tons of fish oil were achieved for the period, from inventory produced
during the successful 2015 season.
Demand and prices for fishmeal softened during the last three months of the 2015 calendar year following good landings in the
second 2015 Peruvian fishing season. Subsequently prices have stabilised with a more balanced supply and demand relationship
returning to the market. Profit in US Dollars has been in line with our investment expectations.
Horse mackerel and hake
The 2015 Namibian horse mackerel TAC decreased by 4% to 335 000 tons (2015: 350 000 tons). The Ministry of Fisheries
and Marine Resources made an initial allocation of 145 000 tons for the 2016 fishing season on the same basis as the prior
period. Reduced owned quota and expensive purchased quota has necessitated a critical review of the commercial performance
of our third vessel. As a result the Desert Rose was sold in October 2015.
Horse mackerel prices were relatively unchanged despite an oversupply of fish in our traditional African markets. Pricing was
however negatively impacted by a change in size mix. The favourable exchange rate partially offset the effect of weaker dollar
prices. Despite weaker markets, margins in Namibia improved following the sale of excess fishing capacity and the termination
of experimental fishing efforts in Angola.
In South Africa the Precautionary Maximum Catch Limit for targeted catch of horse mackerel decreased by 8% to 38 656 tons
(2015: 41 927 tons). The Desert Diamond did not fish in South Africa during the period under review. The vessel was deployed
in Namibia for the last two months of 2015 and was tied up for planned maintenance for the remainder of the period under
review. As a result, profitability from horse mackerel in South Africa decreased materially for the period.
The 2015 hake TAC remained unchanged from the prior year (2015: 123 020 tons). Hake profitability improved significantly
during the period due to a combination of increased volumes following the Foodcorp acquisition, increased prices attributable
to the favourable euro exchange rate and the positive effect of lower fuel prices.
Lobster, squid and French fries
The 2016 TAC for West coast lobster increased by 7% to 1 924 tons (2015: 1 801 tons), and quota available to Oceana for
the current season amounts to 264 tons (2015: 238 tons). A decrease in landings due to lower catch rates and a lower live mix
due to poorer fish quality negated the favourable effect of exchange rates and resulted in a reduction in profit for the period.
Fishing rights allocated to the squid business remained unchanged over the period. In the current period the squid business
generated a profit due to higher sales volumes and prices.
Operating profit in the French fries operation was in line with prior period with higher sales volumes being offset by the effect
of higher priced and poorer quality raw material.
Commercial cold storage (CCS)
The CCS business performed well in the period with revenue increasing by 28% due to improved occupancy levels at
most stores and a full six months operation at the new Midrand stores. Improved revenue together with good cost management
resulted in increased operating profit in the period.
CCS FRUIT BUSINESS DISPOSAL
Subsequent to the six months under review the CCS fruit business in Maydon Wharf has been sold to enable management to
focus on core activities.
DIRECTORATE CHANGES
Takula Jenkins Tapela resigned from the board of directors ("the Board") on 12 May 2016 having served as a director since 2009.
The Board wishes to thank Takula for his contribution during this period. Geoff Fortuin, who holds an executive position
at Brimstone, was appointed to the Board on the same date.
PROSPECTS
As was required by the department of Agriculture, Forestry and Fishing (DAFF), fishing rights applications for horse mackerel,
hake inshore and West coast rock lobster were submitted on 24 February 2016. DAFF has indicated that the outcome of
the allocations will be concluded during August 2016. This will not have an effect on the current year's financial results.
We expect pricing to improve in the fishmeal and fish oil sector based on consistent demands, and with supply challenges in the
Peruvian and European sectors. In the USA the 2016 Gulf Menhaden fishing season commenced on the 18th April 2016
with the season planned to run for a 28 week period to the end of October 2016. Early season landings have been positive
with good oil yields. In South Africa we expect consistent landing patterns of pilchards, industrial fish and hake. We anticipate
that our canned fish value proposition will remain competitive. In Namibia, our performance for the second six months will be
dependent on the timing and extent of the allocation of remaining horse mackerel quota. As the Group is materially a net
exporter of goods, our overall performance for the full year will also be impacted by prevailing exchange rates. We anticipate
that our acquisitions of Foodcorp and Daybrook will continue to deliver the projected returns. In our drive for efficiency
and focus, we will continue to evaluate non-core and underperforming assets in the period ahead.
On behalf of the Board
MA Brey FP Kuttel
Chairman Chief executive officer
12 May 2016
CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 145. A gross interim dividend amounting to 112 cents per share, for the six months
ended 31 March 2016, was declared on Thursday, 12 May 2016, out of current earnings. Where applicable the deduction of
dividends withholding tax at a rate of 15% will result in a net dividend amounting to 95,2 cents per share.
The number of ordinary shares in issue at the date of this declaration is 135 526 154. The company's tax reference number is
9675/139/71/2. Relevant dates are as follows:
Last day to trade cum dividend – Friday, 24 June 2016
Commence trading ex dividend – Monday, 27 June 2016
Record date – Friday, 1 July 2016
Dividend payable – Monday, 4 July 2016
Share certificates may not be dematerialised or re-materialised between Monday, 27 June 2016 and Friday, 1 July 2016, both
dates inclusive.
By order of the board
JC Marais
Company secretary
12 May 2016
Directors: MA Brey (chairman), FP Kuttel* (chief executive officer), ZBM Bassa, PG de Beyer, NP Doyle,
PB Matlare, S Pather, NV Simamane, I Soomra*, TJ Tapela (* executive)
Registered Office: 9th Floor, Oceana House, 25 Jan Smuts Street, Foreshore, Cape Town, 8001
Transfer Secretaries: Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Sponsor – South Africa: The Standard Bank of South Africa Limited
Sponsor – Namibia: Old Mutual Investment Services (Namibia) Proprietary Limited
Company Secretary: JC Marais
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
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