Oceana Group Limited

Revenue declined 6% to ZAR 4.9 billion. Operating profit fell 1.6% to ZAR 665 million from ZAR 676 million. Headline earnings per share increased 7.7% to ZAR 3.498 per share, and interim dividend was maintained at ZAR 1.10 per share. Gross profit margin improved to 28.1%. Lucky Star operating profit increased to ZAR 324 million, Wild caught seafood operating profit increased to ZAR 204 million, Fishmeal and fish oil Africa recorded a loss of ZAR 139 million, and Daybrook operating profit declined 26.7% while maintaining a 24.2% margin. Net interest expense fell 31.3% to ZAR 99 million, profit after tax rose 5% to ZAR 422 million, operating cash flow reached ZAR 1.4 billion, and net debt declined from ZAR 3.5 billion to ZAR 1.7 billion with net debt-to-EBITDA at 1.1x. Capex for the half was ZAR 116 million, and planned full-year capex is ZAR 542 million. Management said Lucky Star will remain in allocation mode in the near term, expects Namibia quota allocation by end-May, sees a constrained Q3 with better Q4 for supply, and expects fishmeal/oil pricing to rise materially.

Neville Brink framed the half as a pleasing result despite being flat on last year because the group’s diversification helped offset volatility in the fishing industry. He emphasized that Lucky Star, Wild caught, and the U.S. fishmeal business are all positioned well for growth, while South African fishmeal is being held back mainly by lack of fish rather than asset performance. His tone was constructive and confident, but realistic about near-term supply constraints and a tough second half in some species.

Zafar Mahomed focused on the quality of earnings, margin improvement, and balance sheet repair. He cited revenue of ZAR 4.9 billion, operating profit of ZAR 665 million, gross margin of 28.1%, headline EPS of ZAR 3.498, and a maintained interim dividend of ZAR 1.10 per share. He also highlighted ZAR 43 million of fuel hedging gains, net interest expense down 31.3% to ZAR 99 million, net debt down to ZAR 1.7 billion, and cash generated from operations of ZAR 1.4 billion, driven largely by ZAR 603 million released from working capital.

Analysts asked whether Lucky Star could face shelf shortages and how the company balances expansion into new countries with limited pilchard supply; Neville said there should not be a near-term shelf shortage, but promotions are being limited and sales are being managed carefully. He said the Namibia pilchard quota is expected by the end of May and believes there is room for growth because much of Lucky Star’s product comes from outside South Africa. On leverage, management said the group will likely not be debt-free because working capital facilities are inherent to the business, but term debt in South Africa should keep coming down as Daybrook becomes a stronger dividend contributor.