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SEA HARVEST GROUP LIMITED - Reviewed Preliminary Condensed Consolidated Financial Results for the Year Ended 31 December 2018

Release Date: 11/03/2019 16:00
Code(s): SHG     PDF:  
 
Wrap Text
Reviewed Preliminary Condensed Consolidated Financial Results for the Year Ended 31 December 2018

Sea Harvest Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2008/001066/06
JSE code: SHG
ISIN: ZAE00240198
"Sea Harvest"or "the Company"or "the Group"

REVIEWED PRELIMINARY CONDENSED
CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2018

COMMENTARY

KEY PERFORMANCE INDICATORS
                                                                               YEAR ENDED      YEAR ENDED 
                                                                   Change   DECEMBER 2018   DECEMBER 2017
Revenue (R'000)                                                    Up 21%       2 583 341       2 131 054
International revenue mix                                                             58%             61%
Gross profit (R'000)                                               Up 27%         908 244         716 790
Gross profit margin                                                                   35%             34%
Operating profit (R'000)                                           Up 16%         388 619         333 813
Operating profit margin                                                             15.0%           15.7%
Profit for the year (R'000)                                        Up 10%         293 133         266 945
Weighted average number of shares ("WANOS") ('000)                                249 202         217 859
Headline earnings (R'000)                                          Up 18%         277 899         235 317
Basic headline earnings per share (cents)                                             112             108
Dividends per share (cents)                                        Up 29%              40              31
Net asset value per share (cents)                                                   705.6           582.4
ZAR: Euro average exchange rate(1)                                                  15.73           14.95
ZAR: AUD average exchange rate(1)                                                    9.81           10.27
Closing share price (cents)                                                         1 375           1 250

Notes:
(1)Average spot exchange rate at which sales were recorded.

HIGHLIGHTS OF THE YEAR
- Sea Harvest Group achieved Level 1 B-BBEE contributor status with a score of 100.37 and was rated as
  the most transformed company on the JSE Limited ("JSE") within the Fishing and Food sectors, according
  to a special report about the Most Empowered Companies listed on the JSE, published by Independent
  Media in partnership with Empowerdex and Intellidex.
- The acquisition of the operations of Viking Fishing as part of a B-BBEE consortium, and 51% of the shares
  of Viking Aquaculture, effective 2 July 2018. This is a transformational transaction for the Group and is
  earnings accretive from the outset.
- The acquisition and conversion of the Harvest Mzansi to a hake factory freezer trawler was completed
  on budget (R250 million) and on time (April 2018).
- The installation of a state-of-the-art Icelandic designed 'Marel' fish processing facility in Saldanha was
  completed on budget (R105 million) and on time (September 2018).
- The acquisition of two Spanish Mackerel packages in western Australia were integrated into Mareterram
  (January 2018).
- The acquisition of 100% of Ladismith Cheese became effective on 2 January 2019.
- Announced a bid to acquire the 43.7% shares of Mareterram not already owned by the Group, strengthening
  Sea Harvest's presence in Australia and providing a beachhead for growth (February 2019).

TRADING AND FINANCIAL PERFORMANCE
The Sea Harvest Group delivered headline earnings for the year ended 31 December 2018 of
R278 million, an increase of 18% compared to the same period last year (2017: R235 million), after
absorbing transaction costs relating to the Viking and Ladismith Cheese acquisitions (R30 million) and
once-off restructuring costs (R17 million).

Group revenue for the year increased by 21% to R2.58 billion (2017: R2.13 billion), benefiting from the
inclusion of Viking Fishing and Viking Aquaculture for the six months post acquisition. Excluding
acquisitions, South African revenue was on par with 2017, with the impact of the 5% reduction in Total
Allowable Catch (TAC) partially offset by global sourcing, a weaker Rand and firm pricing, with the
latter benefiting from continued global demand for high value, sustainably certified, wild caught
seafood. Mareterram's revenue was 9% lower than prior year, due to a 35% reduction in prawn catch
during the season, the impact of which was partly mitigated by higher prices, which benefited from
a larger size mix following the delayed start to the 2018 prawn fishing season.

Gross profit for the period increased by 27% to R908 million (2017: R717 million) and the gross
profit margin expanded to 35.2% (2017: 33.6%). The expansion in the gross profit margin has been
driven by the inclusion of Viking Fishing and Viking Aquaculture, together with further efficiency gains,
an increase in higher margin export volumes, price increases and a weaker rand.

Other operating income, which includes foreign exchange hedge gains, decreased to R72 million
(2017: R75 million).

Operating expenses for the period increased by 29% to R592 million (2017: R458 million), mainly
due to the inclusion of Viking Fishing and Viking Aquaculture's operating expenses post acquisition
and non-recurring transaction costs relating to the Viking and Ladismith Cheese acquisitions. On a
like-for-like basis, excluding the Viking operating expenses and the non-recurring transaction costs,
operating expenses increased by 5%, benefiting from cost control measures across the Group.

The Group delivered operating profit of R389  million for the period, 16% higher than
last year (2017: R334 million), benefiting from the inclusion of six months of Viking Fishing and
Aquaculture's earnings and efficiency gains relating to the introduction of the Harvest Mzansi to the
fleet, offset by lower revenue from Mareterram and once-off transaction costs relating to the Viking
and Ladismith Cheese transactions. The operating margin was steady at 15% (2017: 15.7%).

Fair value gains of R49 million (2017: R25 million) includes a R43 million gain relating to the revaluation
of the contingent consideration liability relating to Viking Aquaculture due to the non-achievement of
the 2018 earn-out target.

Operating profit before net finance costs and taxation of R438 million was 14% higher than the
prior year (2017: R383 million), mainly due to the higher operating profit. The fair value gains of
R49 million in 2018 broadly matched the R48 million gains recorded in 2017 relating to the disposal of
interest in joint venture and the initial measurement of an option.

Profit after tax increased by 10% to R293 million (2017: R267 million), benefiting from the 14%
increase in operating profit before net finance costs and taxation, offset by higher net finance costs as
a result of increased borrowings to fund the Viking transaction.

Headline earnings increased by 18% to R278 million (2017: R235 million) and headline
earnings per share (HEPS) increased by 4% to 112 cents per ordinary share (2017: 108 cents), with
HEPS negatively impacted by the dilutive effect of the increase in the WANOS, which increased from
217 859 827 at 31 December 2017 to 249 202 106 at 31 December 2018. The increase in the WANOS
was mainly as a result of the Group restructure and the subsequent listing of the Group on the JSE on
23 March 2017, where the shares issued at listing were included in the determination of WANOS
for only 283 days in 2017, compared to the full period in 2018. In addition, 19 230 769 shares were
issued on 2 July 2018 as part of the Viking purchase consideration.

SEGMENTAL REVIEW
South African Fishing Operations: Revenue from Sea Harvest's South African fishing operation,
net of intercompany sales, increased by 27% to R2.09 billion (2017: R1.64 billion), benefiting from
the inclusion of Viking Fishing for six months post acquisition. The acquisition of Viking Fishing has
changed the South African fishing operation sales channel mix. As a result of the lower export mix from
Viking Fishing, the Sea Harvest fishing operations combined export sales revenue mix reduced
marginally to 51% (2017: 53%). Europe remains Sea Harvest's most important export market,
representing 80% of total export sales revenue in 2018, with particularly strong growth experienced
in the Iberian Peninsula where Viking Fishing is also well represented. Foodservice made up 39% of
Viking Fishing sales revenue for the six months post acquisition and as a result, the Sea Harvest fishing
operation's combined foodservice mix increased to 30% (2017: 27%). Viking Fishing introduced
a wholesale channel to the business, which Sea Harvest had previously not participated in, making
up 4% of sales revenue for the year. Viking Fishing did not participate in the local retail channel and
as a result, local retail sales mix reduced to 15% (2017: 20%).

South African Aquaculture Operations: The acquisition of 51% of the shares of Viking
Aquaculture effective 2 July 2018, has further diversified Sea Harvest's revenue base, introducing
a new revenue stream to the Group. The Viking aquaculture operations are at an early stage
of development and represent strong growth opportunities for the future. During the second
half of 2018 the operation turned to profit, delivering operating profit of R3 million for the
six months ended 31 December 2018, compared to an operating loss of R4 million in the first six
months of 2018. The business contributed revenue of R55 million to the Group for the six months ended
31 December 2018, with full year revenue for 2018 of R113 million, representing a year-on-year increase of
27%, benefiting from growth in abalone production. Abalone sales made up 62% of sales revenue for
the full year. Revenue from trout has been impacted by higher mortalities as the operation focused on
developing salt water strains of trout for grow-out within Saldanha Bay.

Australian Operations: Revenue for the year reduced by 9% to R443 million (2017: R487 million), impacted
by a 35% reduction in the landings of prawns during the season, in line with the total reduction in catches
within the Shark Bay Managed Fishery during the year. The impact of the lower prawn volumes on revenue
was partly offset by higher prices which benefited from an improved size mix following the delayed
start to the 2018 prawn fishing season. A significant restructure of the business took place in late 2017 and
early 2018 which resulted in a 20% reduction in the company's overheads in 2018. Despite the challenging
prawn fishing conditions, the cost reduction measures enabled the business to deliver earnings before
interest, tax, depreciation and amortisation ("EBITDA") of R30 million for the year, broadly in line with that
of the prior year (2017: R31 million). Depreciation and amortisation increased year-on-year as the
capitalised costs associated with the vessel rebuild programme, as well as the acquisition of a mackerel
vessel, are being depreciated. Interest expenditure increased year-on-year due to an increase in long-
term borrowings relating to the acquisition of two mackerel packages in January 2018. The business
reported profit after tax for the year of R2.3 million (2017: R15 million).

CASH FLOW AND FINANCIAL POSITION
The Group generated net cash of R476 million (2017: R253 million) from its operations during the year,
benefiting from the additional cash generated by the Viking Fishing operation and a positive year-on-year
movement in working capital.

The Group utilised R501 million in investing activities during the year (2017: R369 million), including:

- R121 million on the acquisition of the assets of Viking Fishing, net of R129 million of cash acquired;
- R60 million on the acquisition of 51% of the shares of Viking Aquaculture, net of R5 million of cash
  acquired; and
- R319 million on the acquisition of property, plant and equipment (2017: R370 million), including
  R46 million on the conversion of the Harvest Mzansi into a hake factory freezer trawler, R59 million
  on vessel refits, R81 million on the Marel factory processing facility in Saldanha Bay and R17 million
  on a desalination plant in Saldanha Bay.

During the year the Group raised R423 million from financing activities, raising net borrowings of
R627 million to part fund the Viking Fishing, Viking Aquaculture and Ladismith Cheese acquisitions,
paid dividends of R79 million, advanced loans of R68 million to consortium partners and repurchased
shares of R39 million.

The Group opened the year with cash of R383 million, increased cash by R399 million during the year,
and ended the year with R782 million of cash on hand. With interest-bearing debt of R1,693 billion,
the Group's net debt position for the year ended 31 December 2018 was R911 million.

DRIVING TRANSFORMATION
Sea Harvest is a c. 80% black-owned business and is proud to have achieved Level 1 B-BBEE contributor
status with a score of 100.37 in 2018, an increase from Level 2 with a score of 98.9 in 2017. Sea Harvest's
focus on transformation has been recognised with the Group being rated as the most transformed
company on the JSE in the Fishing and Food sectors, and ranked third in terms of ownership, and tenth
overall, according to a special report about the Most Empowered Companies listed on the JSE,
published by Independent Media in partnership with Empowerdex and Intellidex.

Driving transformation within Sea Harvest and the fishing industry more broadly is central to Sea
Harvest's existence. The Group invests significant resources in skills development, employment equity,
supplier and enterprise development initiatives, as well as projects focused on job creation, youth and
rural development.

- As part of the acquisition of Viking Fishing, Sea Harvest has actively supported the
  establishment of two new black SMME entrants into the South African fishing sector;
- As part of the Viking transaction, the Viking Staff Share Trust paid out R120 million to
  835 employees;
- R38 million worth of Sea Harvest Group shares (2.9 million shares) were allocated to the Viking
  Staff Share Trust for the benefit of its employees, ensuring that employees continue to benefit from
  the future successes of the Group;
- Sea Harvest is a co-founding member of the South African Fisheries Development Fund, a joint
  initiative with Brimstone to establish a R100 million development fund devoted to empowering small
  scale businesses in the fishing and allied sectors;
- During the year Sea Harvest spent R33 million on various skills development initiatives; and
- The Sea Harvest Foundation spent R3 million on community-based projects, including the
  provision of bursaries, healthcare initiatives, donations and the support of youth sports
  development.

OUTLOOK
Within Sea Harvest's South African fishing operation, Sea Harvest expects to see continued global demand
for high value, wild caught, MSC certified seafood, which is expected to drive continued growth and
firm pricing. Local retail volumes are expected to come under continued pressure as a result of
the challenging local economic environment, but continued price inflation in the category is expected
to mitigate the impact on revenue. The local food service market remains robust, with continued
firm pricing expected. The local wholesale market provides a new channel for the distribution of fresh
fish into the informal trade where pricing is expected to remain stable.

On the supply side, the full year effect of the acquisition of Viking Fishing will drive additional
export volume growth, in particular into the Iberian Peninsula where Viking Fishing is well represented,
and growth in the foodservice and wholesale channels within the local market. In addition, a 10%
and 14% increase in the TAC of Hake and Horse Mackerel respectively is expected to drive increased
sales volumes and revenue during 2019. Strategic investments within the fish processing factory in
Saldanha Bay during the third quarter of 2018 is also expected to drive production efficiencies in the
future. This has been a challenging project with the ramp-up of the facility to its design capacity taking
longer than anticipated and benefits delayed until the second half of 2019.

The Viking Aquaculture operations are in the early stages of development, with capital expenditure
already incurred to enable the current facilities to reach their design capacities, representing good
growth opportunities as the abalone, mussel, oyster and trout operations mature and reach their
respective steady states. The Viking Aquaculture business, for the first time, turned to profit during
the second half of 2018. Sea Harvest's 2019 earnings are expected to benefit from the improved earnings
trajectory, as well as the inclusion of twelve months of earnings from Viking Aquaculture as opposed to
six months in 2018. Capital expenditure has been allocated for the expansion of the Abalone facility
in Kleinzee in the Northern Cape to significantly increase abalone production over the next ten-year
period.

During 2018 fishing operators within the Shark Bay Prawn Fishery ("SBPF") experienced historically
low catch volumes compared to previous seasons. The Department of Primary Industry and Regional
Development, which oversees the SBPF, is working closely with industry to manage the SBPF to ensure a
rebound of prawn catch rates. A range of strategies to optimise prawn spawning, recruitment and protection
are being considered. Mareterram continues to focus on building further scale and diversification through
acquisitions, with an emphasis on resource security and subsequent supply chain control. Sea Harvest
has announced that its wholly-owned subsidiary, Sea Harvest International Proprietary Limited, has
entered into a bid agreement to acquire the 43.7% shares in Mareterram not currently owned by the
Group. This acquisition fast-tracks the achievement of the growth objectives for the Group, which includes
continuing to diversify its earnings and increasing the Group's market share and presence in Australia.

On 2 January 2019, the Group's acquisition of the entire issued share capital of Ladismith Cheese
Company Proprietary Limited became effective. Established in 1999, Ladismith Cheese is a value 
adding dairy processing company based in Ladismith in the Western Cape. The company's primary 
business is the production, distribution, marketing and sales of cheese, butter and milk powders 
to South African retail, wholesale and food service markets. The Ladismith Cheese acquisition is 
a further step in the execution of Sea Harvest Group's stated investment strategy representing an 
acquisition of a profitable branded FMCG food manufacturer of significant scale in the food and 
agricultural sector with a long track record, strong national brand and a proven management team.

Any forward-looking statements included in this Outlook paragraph have not been reviewed or
reported on by the auditors.

DELIVERING THE STRATEGY
During the year Sea Harvest made good progress in delivering its investment strategy of growing earnings
through a combination of organic margin enhancements within existing operations, and acquisitive growth
in Fishing, Aquaculture and complementary food categories, including:

- In January 2018, acquired, at a cost of R36 million, two Spanish Mackerel packages in western Australia,
  which were integrated into Mareterram's business.
- In April 2018 completed, at a total cost of R250 million, the conversion of the Harvest Mzansi
  into a hake factory freezer trawler, whose frozen-at-sea product is targeted towards higher margin
  export markets.
- In October 2018 completed, at a total cost of R105 million, the installation of a state-of-the-art,
  Icelandic designed, "Marel" fish processing facility in Saldanha Bay.
- In July 2018, acquired, at a cost of R579 million (including contingent consideration), the operations
  of Viking Fishing, a transformational transaction for the Group, which has been earnings accretive
  from the outset.
- In July 2018, acquired, at a cost of R143 million (including contingent consideration), 51% of the
  shares of Viking Aquaculture, a business in its early stages of development with significant growth
  prospects.
- In January 2019, acquired, at a cost of R573 million (including interest of R46 million), 100% of the
  issued share capital of Ladismith Cheese.
- In January 2019, announced a bid to acquire the 43.7% shares of Mareterram not already owned by
  the Group, strengthening Sea Harvest's presence in Australia and providing a beachhead for growth.

On behalf of the board

F Robertson                F Ratheb
Chairman                   Chief Executive Officer
Cape Town
11 March 2019

CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 2. A gross full and final cash dividend amounting to 40 cents
per share, in respect of the year ended 31 December 2018, was recommended on Monday, 11 March 2019,
out of current earnings. Where applicable, the deduction of dividends withholding tax at a rate of 20% will
result in a net dividend amounting to 32 cents per share.

The number of ordinary shares in issue at the date of this declaration is 294 293 814.

The Company's tax reference number is 9223/794/16/6.

Relevant dates are as follows:
Last day to trade cum dividend                       Tuesday, 9 April 2019
Commence trading ex dividend                         Wednesday, 10 April 2019
Record date                                          Friday, 12 April 2019
Dividend payable                                     Monday, 15 April 2019

Share certificates may not be dematerialised or re-materialised between Wednesday, 10 April 2019 and
Friday, 12 April 2019, both dates inclusive.

By order of the board

N Aston
Company secretary

11 March 2019

INDEPENDENT AUDITOR'S REVIEW REPORT ON CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF SEA HARVEST GROUP LIMITED

We have reviewed the condensed consolidated financial statements of Sea Harvest Group Limited, contained
in the accompanying preliminary report, which comprise the condensed consolidated statement of financial
position as at 31 December 2018 and the condensed consolidated statement of profit or loss, other comprehensive
income, changes in equity and cash flows for the year then ended, and selected explanatory notes.

DIRECTORS' RESPONSIBILITY FOR THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The directors are responsible for the preparation and presentation of these condensed consolidated financial
statements in accordance with the requirements of the JSE Limited Listings Requirements for preliminary
reports, as set out in note 1 to the financial statements, and the requirements of the Companies Act of South
Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

The Listings Requirements require condensed consolidated financial statements contained in a preliminary
report to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and to also, as a minimum, contain the information required by International Accounting
Standard (IAS) 34: Interim Financial Reporting.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express a conclusion on these financial statements. We conducted our review in
accordance with International Standard on Review Engagements (ISRE) 2410, which applies to a review of
historical information performed by the independent auditor of the entity. ISRE 2410 requires us to conclude
whether anything has come to our attention that causes us to believe that the financial statements are not
prepared in all material respects in accordance with the applicable financial reporting framework. This standard
also requires us to comply with relevant ethical requirements.

A review of financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform
procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate,
and applying analytical procedures, and evaluate the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in
accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on
these financial statements.

CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated
financial statements of Sea Harvest Group Limited for the year ended 31 December 2018 are not prepared,
in all material respects, in accordance with the requirements of the JSE Limited Listings Requirements for
preliminary reports, as set out in note 1 to the financial statements, and the requirements of the Companies
Act of South Africa.

Deloitte & Touche
Registered Auditor
Per: Michael van Wyk
Partner
11 March 2019

Unit 11, Ground Floor, 97 Dorp Street, Stellenbosch, 7600

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2018


                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
                                                                                                  Notes         R'000           R'000
Revenue                                                                                               4     2 583 341       2 131 054
Cost of sales                                                                                             (1 675 097)     (1 414 264)
Gross profit                                                                                                  908 244         716 790
Other operating income                                                                                         72 240          74 707
Selling and distribution expenses                                                                           (123 897)       (114 771)
Marketing expenses                                                                                           (13 248)        (15 166)
Other operating expenses                                                                                    (454 720)       (327 747)
Operating profit before fair value gains, joint
venture and associate income                                                                                  388 619         333 813
Share of profit of joint venture and associate                                                                    647           1 000
Gain on the disposal of interest in joint venture                                                                   -          23 155
Fair value gains                                                                                               48 743          24 825
Operating profit before net finance costs and taxation                                                        438 009         382 793
Investment income                                                                                              46 125          17 206
Interest expense                                                                                             (90 130)        (38 848)
Profit before taxation                                                                                        394 004         361 151
Taxation                                                                                                    (100 871)        (94 206)
Profit after taxation                                                                                         293 133         266 945
Profit after taxation attributable to:                                                                                                
Shareholders of Sea Harvest Group Limited                                                                     281 209         259 344
Non-controlling interests                                                                                      11 924           7 601
                                                                                                              293 133         266 945
Earnings per share (cents)
- Basic                                                                                                         112.8           119.0
- Diluted                                                                                                       108.6           114.7

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                                                REVIEWED      AUDITED
                                                                                                              YEAR ENDED   YEAR ENDED
                                                                                                             31 DECEMBER  31 DECEMBER
                                                                                                                    2018         2017
                                                                                                                   R'000        R'000

Profit after taxation                                                                                            293 133      266 945
Other comprehensive (loss)/ income                                                                                                   
Items that may be reclassified subsequently to profit or loss:                                                                       
Movement in cash flow hedging reserve                                                                           (23 956)       27 118
Cash flow hedging reserve recycled to other operating income                                                      20 614     (47 342)
Cost of hedging reserve(1)                                                                                      (27 194)            -
Exchange differences on foreign operations                                                                        22 275     (11 576)
Items that may not be reclassified subsequently to profit or loss:                                          
Net measurement gain on defined benefit plan                                                                       2 149        1 625
Other comprehensive loss net of tax                                                                              (6 112)     (30 175)
Total comprehensive income for the year                                                                          287 021      236 770
Total comprehensive income attributable to:                                                                                          
Shareholders of Sea Harvest Group Limited                                                                        271 525      233 403
Non-controlling interests                                                                                         15 496        3 367
                                                                                                                 287 021      236 770
 
(1) As a result of adopting IFRS 9: Financial Instruments, the Group has elected to designate the spot element of the forward contracts for hedge
    accounting with the forward points of effective hedges deferred in other comprehensive income as the cost of hedging.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2018
                                                                                                REVIEWED                      AUDITED
                                                                                              YEAR ENDED                   YEAR ENDED
                                                                                             31 DECEMBER                  31 DECEMBER
                                                                                                    2018                         2017
                                                                              Notes                R'000                        R'000
ASSETS                                                                                                         
Property, plant, equipment and vehicles(1)                                                     1 604 800                      808 192
Biological assets(2)                                                                             107 646                            -
Intangible assets(3)                                                                             616 163                      489 805
Goodwill(4)                                                                                      621 549                       84 220
Investments in associate                                                                           5 316                            -
Available-for-sale investment                                                     7                    -                       25 264
Investment at fair value through other comprehensive
income                                                                            7               25 264                            -
Financial assets                                                                  7               25 912                       24 825
Loans to related parties                                                          8               72 489                       72 489
Loans to supplier partners(5)                                                                     72 182                        1 959
Deferred tax assets                                                                                  333                          243
Non-current assets                                                                             3 151 654                    1 506 997
Inventories                                                                                      396 471                      304 001
Trade and other receivables                                                                      507 500                      332 578
Financial assets                                                                  7                  994                       41 896
Tax assets                                                                                         9 986                            -
Cash and bank balances                                                                           781 679                      383 047
Current assets                                                                                 1 696 630                    1 061 522
Total assets                                                                                   4 848 284                    2 568 519

(1) Movement in property, plant and equipment during the year includes:
    - acquisitions through a business combination of R652 million;
    - Marel fish processing project of R81 million;
    - further capitalisation of the Harvest Msanzi conversion cost in an amount of R46 million; and
    - disposal of Atlantic Hope with a carrying value of R56 million.
    The Group has re-assessed the residual values of its fleet, resulting in a reduction in depreciation of R5 million in the current year and cumulative
    reduction in depreciation of R75 million over the next 15 years.
(2) Biological assets include abalone, oysters, mussels and fish acquired through a business combination of R85 million.
(3) Additions to intangible assets include the acquisition of Spanish Mackerel rights by Mareterram for an amount of R36 million and R67 million of
    fishing rights relating to the acquisition of the Viking Fishing business.
(4) Movement of R533 million in goodwill relates to current year business combinations and R4 million in the foreign currency translation reserve.
(5) Relates to loans to Nalitha Investments Proprietary Limited and South African Fishing Empowerment Corporation Proprietary Limited.

                                                                                                REVIEWED                      AUDITED
                                                                                              YEAR ENDED                   YEAR ENDED
                                                                                             31 DECEMBER                  31 DECEMBER
                                                                                                    2018                         2017
                                                                            Notes                  R'000                        R'000
EQUITY AND LIABILITIES                                                                                                                    
Stated capital                                                                  9              1 538 761                    1 294 875
Other reserves                                                                                 (102 006)                     (71 476)
Retained earnings                                                                                377 910                      174 267
Attributable to shareholders of Sea Harvest Group Limited                                      1 814 665                    1 397 666
Non-controlling interests                                                                        254 662                      168 313
Capital and reserves                                                                           2 069 327                    1 565 979
Long-term borrowings(1)                                                                        1 517 683                      315 825
Employee related liabilities                                                                      25 229                       26 342
Share based payment liability                                                                     27 626                       18 789
Long-term deferred grant income                                                                   20 026                       12 110
Contingent consideration                                                        3                121 910                            -
Financial liabilities                                                           7                 41 806                       59 348
Deferred taxation                                                                                374 551                      205 277
Non-current liabilities                                                                        2 128 831                      637 691
Short-term borrowings                                                                            174 955                       31 298
Trade and other payables                                                                         410 211                      269 356
Short-term deferred grant income                                                                   2 317                        1 505
Financial liabilities                                                           7                 36 726                       20 848
Short-term provisions                                                                             25 121                       30 980
Taxation                                                                                             796                       10 862
Current liabilities                                                                              650 126                      364 849
Total equity and liabilities                                                                   4 848 284                    2 568 519

(1) Included in the movement in long-term borrowings is a R850 million term loan to fund the Viking Group acquisition and R307 million relating
    to loans advanced to Viking Aquaculture Proprietary Limited from Viking Fishing Group Administration Proprietary Limited (non-controlling
    shareholders of Viking Aquaculture Proprietary Limited).

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
                                                                                               REVIEWED                       AUDITED
                                                                                             YEAR ENDED                    YEAR ENDED
                                                                                            31 DECEMBER                   31 DECEMBER
                                                                                                   2018                          2017
                                                                                                  R'000                         R'000
Balance at the beginning of the year                                                          1 565 979                       669 447
Attributable to:                                                                                                                         
Shareholders of Sea Harvest Group Limited                                                     1 397 666                       517 404
Non-controlling interests                                                                       168 313                       152 043
Total comprehensive income for the year attributable to
shareholders of Sea Harvest Group Limited                                                       271 525                       233 405
Profit after taxation                                                                           281 209                       259 344
Movements in other items of comprehensive income, net of tax                                    (9 684)                      (25 939)
Movements attributable to shareholders of Sea Harvest
Group Limited
Shares issued(1)                                                                                279 531                     1 294 047
Shares repurchased(2)                                                                          (38 526)                             -
Shares awarded in terms of forfeitable share plan(2)                                              2 882                             -
Recognition of forfeitable share plan reserve                                                  (32 413)                      (55 000)
Redemption of preference shares                                                                       -                     (368 409)
Distributions to participants of share trusts and repurchase
of shares                                                                                             -                     (218 771)
Dividends paid                                                                                 (77 565)                             -
Share-based payments                                                                             11 565                        15 178
Transfer to share based payment liability (modification)                                              -                      (19 789)
Further acquisition of investment in subsidiary                                                       -                         (399)
Movement attributable to non-controlling interests                                               86 349                        16 270
Balance at the end of the year                                                                2 069 327                     1 565 979

(1) As part of the total purchase consideration for acquisition of the Viking Fishing business on 2 July 2018, a total of 19 230 769 new ordinary
    shares were issued to Viking Fishing shareholders at R13 per share amounting to R250 million. An additional 2 271 567 new ordinary shares were
    awarded in terms of the forfeitable share plan at R13 per share amounting to R29 million.
(2) A total of 2 671 642 shares were repurchased, of which 217 175 shares were awarded in terms of the forfeitable share plan at an average price of
    R13.27 per share. The balance of 2 454 467 shares were repurchased for the purpose of the forfeitable share plan allocation in 2019.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
                                                                                                  Notes         R'000           R'000
Operating activities                                                                                                                  
Profit after taxation                                                                                         293 133         266 945
Adjustments for non-cash and other items                                                                      246 026         163 296
Operating cash flows before changes in working capital                                                        539 159         430 241
Increase in inventories                                                                                      (14 555)        (14 255)
Increase in trade and other receivables                                                                      (60 201)        (53 547)
Increase/(decrease) in trade and other payables                                                                86 502        (21 448)
Cash generated from operations                                                                                550 905         340 991
Investment income received                                                                                     46 125          17 206
Income tax paid                                                                                              (36 569)        (80 011)
Interest paid                                                                                                (83 963)        (25 544)
Net cash generated from operating activities                                                                  476 498         252 642
Investing activities                                                                                                                  
Acquisition of investment in subsidiary/business                                                      3     (181 339)               -
Proceeds on disposal of property, plant, equipment and
vehicles                                                                                                       75 543           2 855
Acquisition of property, plant and equipment and
vehicles                                                                                                    (319 275)       (369 876)
Acquisition of intangible assets                                                                             (38 925)         (1 526)
Additions to biological assets                                                                               (37 149)               -
Net cash utilised in investing activities                                                                   (501 145)       (368 547)
Financing activities                                                                                                                  
Shares issued, net of listing costs                                                                                 -       1 239 025
Shares repurchased                                                                                           (38 526)               -
Redemption of B and C preference share capital                                                                      -       (368 409)
Repayment of B and C preference dividends                                                                           -       (144 269)
Proceeds from borrowings                                                                                    1 271 051         257 968
Repayment of borrowings                                                                                     (641 514)       (332 024)
Repayment of financial liabilities                                                                           (21 266)        (22 256)
Repurchase of shares and distributions to participants
of share trusts                                                                                                     -       (218 771)
Dividends paid                                                                                               (78 506)               -
Amounts advanced to related parties                                                                                 -        (80 194)
Amounts advanced to supplier partners                                                                        (68 000)               -
Rights issue by subsidiary                                                                                          -          14 971
Further investment in subsidiary                                                                                    -         (1 479)
Net cash generated from financing activities                                                                  423 239         344 562
Net increase in cash and cash equivalents                                                                     398 592         228 657
Cash and cash equivalents at the beginning of the year                                                        383 047         154 404
Effects of exchange rates on the balance of cash held in
foreign operation                                                                                                  40            (14)
Cash and cash equivalents at the end of the year                                                              781 679         383 047

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018

1. BASIS OF PREPARATION
   The condensed consolidated financial statements for the year ended 31 December 2018 are prepared in
   accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports and
   the requirements of the Companies Act of South Africa. The Listings Requirements require preliminary
   reports to be prepared in accordance with the framework concepts and the measurement and recognition
   requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
   Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
   Financial Reporting Standards Council and to also, as a minimum, contain the information required by
   IAS 34: Interim Financial Reporting.

   These condensed consolidated financial statements for the year ended 31 December 2018 has been
   reviewed by Deloitte & Touche, who expressed an unmodified review conclusion.

   The directors take full responsibility for the preparation of this report. The condensed consolidated
   annual financial statements were prepared under the supervision of the Chief Financial Officer, JP de
   Freitas CA(SA).

2. ACCOUNTING POLICIES
   The accounting policies and methods of computation applied in the preparation of these condensed
   consolidated financial statements are in terms of IFRS and are consistent with those applied in the
   financial statements for the year ended 31 December 2017, except as set out below.

   The Group adopted IFRS 9: Financial Instruments and IFRS 15: Revenue from Contracts with Customers
   on 1 January 2018. As reported previously, the adoption of these standards had an immaterial impact
   on the Group. The implementation of IFRS 9 resulted in the reclassification of the R25 million "available-
   for-sale" investment to an equity instrument irrevocably designated as at fair value through other
   comprehensive income as disclosed in note 7. There is no reclassification of fair value changes on the
   "available-for-sale" investments as these are already reported in equity. As a result of adopting IFRS 9,
   the Group has elected to designate the spot element of the forward contracts for hedge accounting
   with the forward points of effective hedges deferred in other comprehensive income as the cost of
   hedging. The adoption of IFRS 15 had no material impact on the Group.

3. BUSINESS COMBINATION
   With effect from 2 July 2018, the Group has, together with a consortium of broad-based black
   economic empowerment investors, acquired the entire fishing business of Viking Fishing Holdings
   Proprietary Limited ("Viking Fishing") by way of the purchase of selected assets, liabilities and
   businesses from, and selected shareholdings in, the respective Viking Fishing group businesses.
   As part of the same transaction, the Group acquired 51% of the issued share capital of Viking Aquaculture
   Proprietary Limited ("Viking Aquaculture").

   Viking Fishing and Viking Aquaculture (together the "Viking Group") was founded in 1978 and 2012,
   respectively. The Viking Group has developed into a significant vertically integrated fishing and
   aquaculture business since establishment.
   
   The acquisition of the Viking Group is in line with the Group's investment criteria and the Group is
   confident of the value that a combination of Sea Harvest and the Viking Group would generate through
   the complementary nature of the fishing businesses and the diversification into other wild caught
   species and aquaculture.
   
   The Group gained a controlling interest in Viking Aquaculture through this acquisition, and has accounted
   for the 51% interest as a non-wholly-owned subsidiary, with its results from 2 July 2018 being fully
   consolidated with that of the Group's results.
   
   The Group has elected to measure the non-controlling interest in Viking Aquaculture at its proportionate
   percentage of the recognised amounts of the acquiree's identifiable net assets.
   
   The cash generating units identified for the business combination are Viking Fishing and Viking
   Aquaculture. The purchase price allocation is as follows:
   
                                                                            FAIR VALUE AT           FAIR VALUE AT  
                                                                         ACQUISITION DATE        ACQUISITION DATE            REVIEWED
                                                                       VIKING AQUACULTURE          VIKING FISHING               TOTAL
   ASSETS ACQUIRED AND LIABILITIES ASSUMED                                          R'000                   R'000               R'000
   Property, plant and equipment                                                  425 292                 227 172             652 464
   Biological assets                                                               85 368                       -              85 368
   Intangible assets                                                                5 635                  67 149              72 784
   Investment in associate                                                            669                       -                 669
   Deferred tax assets                                                             10 750                       -              10 750
   Inventory                                                                        7 307                  67 014              74 321
   Current tax receivables                                                            298                       -                 298
   Trade and other receivables                                                     17 888                  97 591             115 479
   Cash and bank balances                                                           4 540                 128 727             133 267
   Long-term interest-bearing borrowings                                                -               (402 218)           (402 218)
   Other long-term loans                                                        (305 047)                       -           (305 047)
   Deferred-income                                                                (9 445)                       -             (9 445)
   Deferred tax liabilities                                                      (83 632)                (19 773)           (103 405)
   Trade and other payables                                                      (14 913)                (37 403)            (52 316)
   Employee related liabilities                                                         -                (12 812)            (12 812)
   Total identifiable assets and liabilities                                      144 710                 115 447             260 157
   
                                                                             FAIR VALUE AT          FAIR VALUE AT
                                                                          ACQUISITION DATE       ACQUISITION DATE            REVIEWED
                                                                        VIKING AQUACULTURE         VIKING FISHING               TOTAL
   ASSETS ACQUIRED AND LIABILITIES ASSUMED                                           R'000                  R'000               R'000
   Total consideration is made up of following:                       
   Cash                                                                             64 605                250 001             314 606
   Shares issued (19 230 769 ordinary shares
   at a price of R13 per share)                                                          -                250 000             250 000
   Contingent consideration                                                         78 740                 78 770             157 510
                                                                                   143 345                578 771             722 116
   
   Net cash flow on acquisition of subsidiary
   business
   Consideration paid in cash                                                       64 605                250 001             314 606
   Less: Cash and cash equivalent balances
   acquired                                                                        (4 540)              (128 727)           (133 267)
                                                                                    60 065                121 274             181 339
   Goodwill on acquisition
   Consideration                                                                   143 345                578 771             722 116
   Less: Fair value of identifiable assets
   acquired and liabilities assumed                                              (144 710)              (115 447)           (260 157)
   Non-controlling interest                                                         71 348                      -              71 348
                                                                                    69 983                463 324             533 307
   
   The initial accounting for the acquisition of Viking Fishing and Viking Aquaculture has been finalised.
   
   Property, plant and equipment with a carrying amount of R218 million was revalued at acquisition date
   to R653 million, being its fair value at acquisition date. A total of R288 million of the fair value adjustment
   relates to Viking Aquaculture abalone plants, which was valued based on management estimates of
   what similar fully functional abalone plants with the same capacity will cost at acquisition date adjusted
   for wear and tear. The remaining R147 million fair value adjustment relates to Viking Fishing, of which
   a significant portion relates to Viking Fishing's fishing trawlers. These valuations were performed by
   an independent industry expert.
   
   The main classes of intangible assets identified in Viking Aquaculture were trade names, maritime
   aquaculture rights and seaweed rights. The main class of intangible asset identified in the Viking Fishing
   business was its fishing rights. The fair values were determined by an external independent valuer with
   reference to the best estimate of market participant's ability to generate economic benefits by using
   the asset in its highest and best use.
   
   The fair value of trade and other receivables is R116 million and includes trade receivables with a fair
   value of R110 million which approximates the gross contractual amount.
   
   Goodwill is attributable to a control premium as well as the benefit of expected synergies, revenue
   growth and delivering diversification into other species and high value aquaculture.
   
   Goodwill is not expected to be deductible for tax purposes.

   Subsumed into goodwill are the assembled workforce with specialised knowledge and non-contractual
   customer relationships which do not qualify for separate recognition.

   Impact of the acquisition on the results of the Group
   
   Amounts included in the Group's results relating to the Viking Group since the date of acquisition:
   
   The directors are of the opinion that it is impractical to separately disclose the earnings of Viking Group
   for the six months ended 31 December 2018 as the acquisition of Viking Fishing took the form of an
   acquisition of assets and liabilities and during the six months since acquisition the fishing operations of
   Sea Harvest and Viking Fishing were integrated, making it impractical to allocate revenue and operating
   costs between the two business operations. Separate records are being maintained on a basis agreed
   with the former owners for the purpose of earn-out determination.
   
   Results of the Group if Viking Group had been consolidated from 1 January 2018:                                              R'000
   Revenue                                                                                                                  3 102 729
   Profit for the year                                                                                                        333 088
   
   The directors consider these amounts to represent an approximate measure of the performance of
   the combined group on an annualised basis and to provide a reference point for comparison in future
   periods.

   In determining the profit of the Group had the Viking Group been acquired on 1 January 2018, the
   directors have taken into consideration the following:
   
   -  Additional finance costs that would have been incurred had the transaction taken place on 1 January 2018;
   -  The depreciation of plant and equipment and amortisation of intangibles acquired was calculated
      on the basis of the fair values arising in the accounting for the business combination, rather than
      the carrying amounts recognised in the pre acquisition financial statements; and
   -  Incremental operating costs that would have been incurred by the Group had the transaction taken
      place on 1 January 2018.
   
   Acquisition related costs
   
   Acquisition costs of R29.4 million were recognised in profit or loss for the 2018 year.
   
   Contingent consideration
   
   The contingent consideration was estimated by an independent valuer and is based on Viking Aquaculture
   and Viking Fishing achieving the earn-out targets for 2018 and 2019 financial years discounted at the
   prime lending rate at acquisition date. The contingent consideration is regarded as a level 3 financial
   instrument for fair value measurement purposes. Level 3 fair value measurements are those derived
   from valuation techniques that include inputs for the asset or liability that are not based on observable
   market data (unobservable inputs).
   
   The movement in contingent consideration in 2018 is as follows:

   Viking Fishing                                                                                                              78 770
   Viking Aquaculture                                                                                                          78 740
                                                                                                                              157 510
   Effect of discounting                                                                                                        7 660
   Fair value adjustment(1)                                                                                                  (43 260)
   Closing balance                                                                                                            121 910

   (1) The fair value adjustment is as a result of Viking Aquaculture not achieving the 2018 minimum target.

                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
                                                                                                                R'000           R'000
4. REVENUE
   Group revenue for the year can be analysed as follows:
   Revenue from the sale of goods                                                                           2 583 341       2 125 028
   Revenue from the performance of services                                                                         -           6 026
                                                                                                            2 583 341       2 131 054
   Revenue from sale of goods comprise of:
   Cape Hake                                                                                                1 351 669       1 232 227
   Traded and other                                                                                           652 359         418 957
   Prawns                                                                                                     176 484         202 133
   Vegetables and meals                                                                                       108 343         120 985
   High value by catch                                                                                        150 130         108 828
   Scallops and crabs                                                                                          43 248          41 898
   Horse Mackerel                                                                                              65 726               -
   Abalone                                                                                                     35 382               -
                                                                                                            2 583 341       2 125 028
   Revenue is further split by geographic region as follows:
   South Africa                                                                                             1 079 820         821 317
   Southern Europe                                                                                            720 892         551 823
   Australia                                                                                                  471 997         506 069
   Northern Europe                                                                                            188 439         203 683
   Other Markets                                                                                              122 193          48 162
                                                                                                            2 583 341       2 131 054

                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
                                                                                                                R'000           R'000
5.  HEADLINE EARNINGS PER SHARE                                                                                                      
5.1 DETERMINATION OF HEADLINE EARNINGS                                                                                              
    Profit for the year attributable to shareholders of Sea
    Harvest Group Limited                                                                                     281 209         259 344
    Profit on disposal of property, plant, equipment and
    vehicles                                                                                                  (4 596)         (3 876)
    Realised profit on disposal of interest in joint venture                                                        -        (23 155)
    Total tax effects of adjustments                                                                            1 286           3 004
    Headline earnings for the year                                                                            277 899         235 317

                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
5.2 CALCULATION OF WEIGHTED AVERAGE NUMBER OF SHARES                                                                                
    Weighted average number of shares on which earnings and
    headline earnings per share are based                                                                 249 202 106     217 859 827
    Weighted average number of shares on which diluted
    earnings and diluted headline earnings per share are based                                            258 988 718     226 173 525
    Reconciliation of weighted average number of shares
    between basic and diluted earnings per share and headline
    earnings and diluted headline earnings per share:
    Basic                                                                                                 249 202 106     217 859 827
    Dilutive instruments                                                                                    9 786 612       8 313 698
    Diluted                                                                                               258 988 718     226 173 525
    Headline earnings per share (cents)                                                                                              
    - Basic                                                                                                     111.5           108.0
    - Diluted                                                                                                   107.3           104.0

                                                                                                             REVIEWED         AUDITED
                                                                                                           YEAR ENDED      YEAR ENDED
                                                                                                          31 DECEMBER     31 DECEMBER
                                                                                                                 2018            2017
                                                                                                                R'000           R'000
6.  SEGMENTAL RESULTS                                                                                                              
    As a result of the business combination, the South African
    Operations, as reported in prior years, now includes the
    Viking Fishing business forming the South African Fishing
    segment and a new reportable segment, Aquaculture, was
    formed. The Groups' reportable segments under IFRS 8:
    Operating Segments are South African Fishing, Aquaculture
    and the Australian operation.                                                                                                  
    Segment revenue                                                                                                                
    South African Fishing(1)                                                                                  2 085 972     1 644 206
    Australian Operations                                                                                       442 837       486 848
    Aquaculture(2)                                                                                               54 532             -
    Total revenue                                                                                             2 583 341     2 131 054
    Segment profit from operations                                                                                                 
    South African Fishing                                                                                       369 408       312 262
    Australian Operations                                                                                        16 318        21 551
    Aquaculture                                                                                                   2 893             -
    Operating profit before fair value gains, joint venture
    and associate income                                                                                        388 619       333 813
    Fair value gains                                                                                             48 743        24 825
    Gain on the disposal of interest in joint venture                                                                 -        23 155
    Share of profits of joint venture and associate                                                                 647         1 000
    Investment income                                                                                            46 125        17 206
    Interest expense                                                                                           (90 130)      (38 848)
    Profit before taxation                                                                                      394 004       361 151
    Total assets                                                                                                                   
    South African Fishing(3)                                                                                  3 338 053     1 732 386
    Australian Operations                                                                                       873 809       836 133
    Aquaculture                                                                                                 636 422             -
                                                                                                              4 848 284     2 568 519
    Total liabilities                                                                                                              
    South African Fishing                                                                                     1 958 850       638 084
    Australian Operations                                                                                       376 482       364 456
    Aquaculture                                                                                                 443 625             -
                                                                                                              2 778 957     1 002 540

    (1)Revenue excludes inter-segmental revenue of R98 million (2017: R101 million) which are eliminated on consolidation.
    (2)Revenue excludes inter-segmental revenue of R2 million (2017: nil) which are eliminated on consolidation.
    (3)South African Fishing assets includes assets of R1 billion acquired in a business combination. Refer to note 3.

                                                                                                            REVIEWED          AUDITED
                                                                                                          YEAR ENDED       YEAR ENDED
                                                                                                         31 DECEMBER      31 DECEMBER
                                                                                                                2018             2017
                                                                                                               R'000            R'000
7.  OTHER FINANCIAL ASSETS AND LIABILITIES                                                                                               
    Financial derivative assets                                                                               26 906           66 721
    Non-current portion of financial assets(1)                                                                25 912           24 825
    Current portion of financial assets(2)                                                                       994           41 896

    Other financial asset                                                                                                             
    Available-for-sale investment(3)                                                                               -           25 264
    Investment at fair value through other comprehensive
    income(3)                                                                                                 25 264                -
    Financial derivative liabilities                                                                          14 460              130
    Current portion of financial liabilities(2)                                                               14 460              130

    Other financial liability                                                                                                         
    Fishing licence liability(4)                                                                              64 072           80 066
    Non-current portion of financial liability                                                                41 806           59 348
    Current portion of financial liability                                                                    22 266           20 718

(1) CALL OPTION DERIVATIVE
    Included in the non-current financial assets is a call option to acquire 100% of the shareholding in Vuna
    Fishing Company Proprietary Limited from Vuna Fishing Group Proprietary Limited. The fair value was
    independently determined by an expert using the Black-Scholes option pricing model. The call option
    financial asset has been classified as a non-current asset at 31 December 2018 due to the expected
    exercise date thereof exceeding 12 months from the reporting date. The call option is regarded as a
    level 3 financial instrument for fair value measurement purposes. Level 3 fair value measurements are
    those derived from valuation techniques that include inputs for the asset or liability that are not based
    on observable market data (unobservable inputs).

    The movement in the call option derivative is as follows:
    Opening balance                                                                                           24 825                -
    Fair value movement                                                                                        1 087           24 825
    Closing balance                                                                                           25 912           24 825

    ASSUMPTION SENSITIVITY ANALYSIS
    The Group has performed a sensitivity analysis relating to its exposure to a change in the assumptions
    used in the valuation. The sensitivity analysis demonstrates the increase/(decrease) on the asset held
    at fair value through profit or loss which could result from a change in these assumptions.

                                                                                                            REVIEWED          AUDITED
                                                                                                          YEAR ENDED       YEAR ENDED
                                                                                                         31 DECEMBER      31 DECEMBER
                                                                                                                2018             2017
                                                                                                               R'000            R'000
    Vuna Fishing Company valuation                                                                                                    
    +5%                                                                                                        1 980            2 061
    -5%                                                                                                      (1 956)          (2 036)
    Yield Curve (8.0590%)                                                                                                             
    +5%                                                                                                        1 324            1 167
    -5%                                                                                                      (1 285)            (975)
    Volatility (34.378%)                                                                                                              
    +1%                                                                                                        1 060            1 435
    -1%                                                                                                      (1 087)          (1 487)

    As Vuna Fishing Company Proprietary Limited is unlisted, the volatility was determined using the
    quadratic mean volatility of peer group companies.


(2) FINANCIAL DERIVATIVE ASSETS AND LIABILITIES
    Financial assets and liabilities arise from hedging contracts entered into by the Group for the purpose
    of minimising the Group's exposure to foreign currency volatility. Hedging contracts are regarded as
    level 2 financial instruments for fair value measurement purposes. Level 2 fair value measurements are
    those derived from inputs that are observable for the asset or liability, either directly (i.e. as prices) or
    indirectly (i.e. derived from prices).


(3) INVESTMENT AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
    The Group holds 10% of the ordinary share capital of Desert Diamond Fishing Proprietary Limited, a
    company involved in the fishing and fishing processing industries.
    This investment was previously classified as "available-for-sale". With the adoption of IFRS 9, the Group
    has irrevocably elected to classify this investment as fair value through other comprehensive income
    because this investment is held as long-term strategic investment that is not expected to be sold in the
    short to medium term. As a result, the investment with a fair value of R25 million was reclassified from
    available-for-sale financial assets to financial assets at fair value through other comprehensive income.

    The Group reassesses the valuation of the fair value through other comprehensive income investment
    annually, by using an asset valuation method performed by an independent valuator.

    The fair value through other comprehensive income investment is regarded as a level 3 financial
    instrument. Level 3 fair value measurements are those derived from valuation techniques that include
    inputs for the asset or liability that are not based on observable market data (unobservable inputs).

    ASSUMPTION SENSITIVITY ANALYSIS
    The Group has performed a sensitivity analysis relating to its exposure to a change in the assumptions
    used in the valuation. The sensitivity analysis demonstrates the increase/(decrease) on the investment at
    fair value through other comprehensive income which could result from a change in these assumptions.

                                                                                                        REVIEWED              AUDITED
                                                                                                      YEAR ENDED           YEAR ENDED
                                                                                                     31 DECEMBER          31 DECEMBER
                                                                                                            2018                 2017
                                                                                                           R'000                R'000
    Desert Diamond vessel valuation                                                                                                   
     +5%                                                                                                   1 263                1 263
     -5%                                                                                                 (1 263)              (1 263)

(4) FISHING LICENCE LIABILITY
    The fishing licence liabilities relate to the Shark Bay Prawn Managed Fishery Voluntary Fisheries
    Adjustment Scheme (VFAS). The VFAS operates from 12 November 2010 until 1 July 2021. Mareterram
    owns 10 fishing licences in the Shark Bay region. The liabilities shown represent present values discounted
    at the five-year Australian Corporate Bond rate. Fishing licence liabilities are carried at amortised cost.

                                                                                                  REVIEWED                    AUDITED
                                                                                                YEAR ENDED                 YEAR ENDED
                                                                                               31 DECEMBER                31 DECEMBER
                                                                                                      2018                       2017
                                                                                                     R'000                      R'000
8.  RELATED PARTY TRANSACTIONS                                                                                    
    This disclosure relates to material related party balances and
    transactions.

8.1 RELATED PARTY LOANS                                                                                             
    Loans to related parties-non-current                                                                       
    Vuna Fishing Company Proprietary Limited (Joint venture of
    Brimstone Investment Corporation Limited)                                                       27 420                      27 420
    Vuna Fishing Group Proprietary Limited (Subsidiary of
    Brimstone Investment Corporation Limited)                                                       45 069                      45 069
    Total                                                                                           72 489                      72 489
    Loans to related parties-current                                                                           
    Specialised Aquatic Feeds Proprietary Limited (Associate of
    Viking Aquaculture Proprietary Limited)                                                          4 000                           -
    Total                                                                                            4 000                           -
    Interest paid to related parties
    Brimco Proprietary Limited                                                                           -                      10 708


                                                                                                 REVIEWED                     AUDITED
                                                                                               YEAR ENDED                  YEAR ENDED
                                                                                              31 DECEMBER                 31 DECEMBER
                                                                                                     2018                        2017
                                                                                                    R'000                       R'000
8.2 RELATED PARTY TRANSACTIONS
    Sales to related parties
    SeaVuna Fishing Company Proprietary Limited(1)                                                 81 520                      34 880
    Purchases from related parties
    SeaVuna Fishing Company Proprietary Limited(1)                                                193 157                     165 731

    (1) SeaVuna Fishing Company Proprietary Limited is a wholly-owned subsidiary of Vuna Fishing Company Proprietary Limited which is a joint
        venture of Brimstone Investment Corporation Limited.

    In terms of the supply agreement with Vuna Fishing Company Proprietary Limited ("Vuna") and SeaVuna
    Fishing Company Proprietary Limited ("SeaVuna"), fish caught by Vuna and SeaVuna is marketed by
    Sea Harvest Corporation Proprietary Limited.

                                                                                                           REVIEWED           AUDITED
                                                                                                         YEAR ENDED        YEAR ENDED
                                                                                                        31 DECEMBER       31 DECEMBER
                                                                                                               2018              2017
9.  STATED CAPITAL (NUMBER)                                                                                                          
    In issue (number)                                                                                                                
    Ordinary shares                                                                                     272 865 243       251 362 907
    Held as treasury shares                                                                            (15 685 629)      (11 389 304)
                                                                                                        257 179 614       239 973 603

    At 31 December 2018, the movement in stated capital is as follows:

                                                                                  TOTAL SHARES        LESS TREASURY  TOTAL NET SHARES
                                                                                      IN ISSUE               SHARES          IN ISSUE
    Opening balance                                                                251 362 907           11 389 304       239 973 603
    Shares issued                                                                   21 502 336            2 271 567        19 230 769
    Shares repurchased                                                                       -            2 671 642       (2 671 642)
    Shares vested                                                                            -            (646 884)           646 884
    Closing balance                                                                272 865 243           15 685 629       257 179 614

10. CONTINGENT LIABILITIES AND COMMITMENTS
    The Group has no contingent liabilities at the end of the year (2017: nil).

                                                                                                           REVIEWED           AUDITED
                                                                                                         YEAR ENDED        YEAR ENDED
                                                                                                        31 DECEMBER       31 DECEMBER
                                                                                                               2018              2017
                                                                                                              R'000             R'000
    Capital commitments                                                                                                              
    Budgeted capital expenditure is as follows:
    - contracted                                                                                             19 632           155 665
    - not contracted                                                                                        115 142           123 230
    Lease commitments                                                                                                                
    - land and buildings                                                                                    227 712            24 456

11. EVENTS AFTER THE REPORTING DATE
    On 2 January 2019, Sea Harvest Group Limited has, through its wholly-owned subsidiary Cape Harvest
    Food Group Proprietary Limited, acquired the entire issued share capital of Ladismith Cheese Company
    Proprietary Limited for a consideration of R573 million, settled in cash. Part of the consideration was
    funded by way of a vendor consideration placement, whereby holding company, Brimstone Investment
    Corporation Limited, through its wholly-owned subsidiary Newshelf 1169 Proprietary Limited, subscribed
    for 21 428 571 shares at a price of R14 per share, resulting in a total subscription of R300 million.
    This increases Brimstone Investment Corporation Limited's investment in Sea Harvest from 50.59%(1) at
    31 December 2018 to 54.19%1 at 8 January 2019. The Group is in the process of determining the fair
    values of the assets and liabilities of Ladismith Cheese for IFRS 3: Business Combination purposes.

    On 5 February 2019, the Group announced that, through its wholly-owned subsidiary Sea Harvest
    International Proprietary Limited, it had entered into a binding bid implementation agreement with its
    56.3% held Australian subsidiary, Mareterram Limited whose shares are listed on the Australian Securities
    Exchange, regarding the potential acquisition of all of the fully paid ordinary shares in the issued share
    capital of Mareterram not currently owned by Sea Harvest by way of an off-market takeover offer.

    The board of directors has recommended a gross full and final cash dividend of 40 cents (2017:
    31 cents) per share on 5 March 2019 in respect of the year ended 31 December 2018.

    Other than as outlined above, there has not arisen in the interval between the end of the financial year
    and the date of this report any item, transaction or event of a material and unusual nature likely, in the
    opinion of the directors of the Company to affect substantially the operations of the Group, the results
    of its operations or the state of affairs of the Group.

    (1) Including treasury shares in the calculation of the interest

CORPORATE INFORMATION

Registered address:   The Boulevard Office Park
                      1st Floor, Block C
                      Searle Street
                      Cape Town
                      7925
                      South Africa
                       
Directors:            F Robertson* (Chairman)
                      BM Rapiya**
                      WA Hanekom***
                      MI Khan*
                      L Penzhorn*** (Retired 2 July 2018)
                      T Moodley* (Appointed 2 July 2018)
                      KA Lagler*** (Appointed 2 July 2018)
                      CK Zama*** (Appointed 2 July 2018)
                      F Ratheb (Chief Executive Officer)
                      JP de Freitas (Chief Financial Officer)
                      M Brey (Chief Investment Officer)

                      * Non-executive director
                      ** Lead independent non-executive director
                      *** Independent non-executive director
                       
Company Secretary:    N Aston
                       
Transfer Secretary:   Computershare Investor Services Proprietary Limited
                      Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
                       
Sponsor:              The Standard Bank of South Africa Limited
                       
Auditors:             Deloitte & Touche
   



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