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OCE
OCE
OCE - Oceana Group - Audited Group Results And Dividend Declaration For The
Year Ended 30 September 2008
OCEANA GROUP LIMITED
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
AUDITED GROUP RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 30
SEPTEMBER 2008
This report has been prepared in compliance with International Financial
Reporting Standards (IFRS) applicable to Interim Financial Reporting (IAS 34)
and in accordance with the principles applied in the most recently published
Annual Financial Statements.
The financial information has been audited by our auditors, Deloitte &
Touche, whose unmodified audit opinion is available for inspection at the
registered office of the company.
Oceana Group Limited
Registered Office: 16th Floor Metropolitan Centre, 7 Coen Steytler Avenue,
Cape Town, 8001
Transfer Secretaries: Computershare Investor Services(Pty) Limited, 70
Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Sponsors:
South Africa: The Standard Bank of South Africa Limited
Namibia: Old Mutual Investment Services (Namibia) (Pty) Limited
Directors: MA Brey (chairman), RA Williams (vice chairman),
AB Marshall* (chief executive officer), PG de Beyer, ABA Conrad*, M Fleming,
Z Fuphe, PB Matlare, RG Nicol*, S Pather, F Robertson (*executive)
Company Secretary: JD Cole
CONDENSED GROUP INCOME STATEMENT
2008 2007
Audited Audited Change
Note R`000 R`000 %
Revenue 3,002,476 2,608,894 15
Operating profit before abnormal
items 317,284 236,723 34
Abnormal items 1 11,725 2,549
Operating profit 329,009 239,272 38
Dividends received 19,103 15,922
Net interest received 10,311 11,181
Profit before taxation 358,423 266,375 35
Taxation 104,153 85,869 21
Profit after taxation 254,270 180,506 41
Attributable to:
Shareholders of Oceana Group Limited 246,073 168,805 46
Outside shareholders in subsidiaries 8,197 11,701 (30)
254,270 180,506 41
Weighted average number of shares on
which earnings per share
are based (000`s) 2 98,721 100,866
Adjusted weighted average number of shares
on which diluted earnings per share
are based (000`s) 100,144 101,017
Earnings per share (cents)
Basic 249.3 167.4 49
Diluted 245.7 167.1 47
Dividends per share (cents) 156.0 106.0 47
Headline earnings per share (cents)
Basic 237.7 162.4 46
Diluted 243.3 162.2 44
CONDENSED GROUP BALANCE SHEET
2008 2007
Audited Audited
R`000 R`000
Assets
Non-current assets 516,084 460,724
Property, plant and equipment 334,147 273,413
Goodwill 23,544 22,830
Fishing rights and trademark 21,749 32,682
Deferred taxation 5,386 10,438
Investments and loans 131,258 121,361
Current assets 1,039,398 1,041,655
Inventories 344,458 312,470
Accounts receivable 424,405 412,073
Non-current assets held for sale - 602
Cash and cash equivalents 270,535 316,510
Total assets 1,555,482 1,502,379
Equity and liabilities
Capital and reserves
Share capital and premium 2,370 4,267
Foreign currency translation reserve 22,376 25,350
Share-based payment reserve 24,616 16,818
Capital redemption reserve 130 130
Distributable reserves 920,434 824,938
Interest of own shareholders 969,926 871,503
Interest of outside shareholders 29,632 34,019
Total equity 999,558 905,522
Non-current liabilities 59,690 39,584
Liability for share-based payments 14,957 6,999
Deferred taxation 44,733 32,585
Current liabilities 496,234 557,273
Accounts payable and provisions 443,832 459,132
Bank overdrafts 52,402 98,141
Total equity and liabilities 1,555,482 1,502,379
Number of shares in issue net of treasury
shares (000`s) 98,371 100,278
Net asset value per ordinary share (cents) 986 869
Total liabilities excluding deferred
taxation: Total equity (%) 51 62
Total borrowings: Total equity (%) 5 11
CONDENSED GROUP CASH FLOW STATEMENT
2008 2007
Audited Audited
R`000 R`000
Cash flows from operating activities
Operating profit before abnormal items 317,284 236,723
Adjustment for non-cash items 83,045 78,423
Cash operating profit before working
capital changes 400,329 315,146
Working capital changes (79,496) (44,475)
Cash generated from operations 320,833 270,671
Interest and dividends received 20,998 24,472
Interest paid (6,464) (8,675)
Taxation paid (84,623) (74,378)
Dividends paid (123,640) (83,128)
Cash flow from operating activities 127,104 128,962
Cash outflow from investing activities (87,526) (700)
Capital expenditure (127,511) (28,041)
Proceeds on disposal of property, plant
and equipment 2,478 1,854
Net movement on loans and advances 3,470 14,291
Net disposal and acquisition of businesses 21,312 7,830
Proceeds on disposal of fishing rights 7,728 3,366
Proceeds on disposal of investments 451 -
Cash related abnormal items 4,546 -
Cash outflow from financing activities (41,583) (33,286)
Proceeds from issue of share capital 10,817 16,087
Acquisition of treasury shares by subsidiary (52,302) (36,805)
Short-term borrowings repaid (98) (12,568)
Net (decrease)/increase in cash and cash _______ _________
equivalents (2,005) 94,976
Cash and cash equivalents at the beginning
of the year 218,369 126,721
Effect of exchange rate changes 1,769 (3,328)
Cash and cash equivalents at the end of the year 218,133 218,369
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
2008 2007
Audited Audited
R`000 R`000
Balance at the beginning of the year 905,522 818,830
Shares issued 9,588 16,087
Increase in treasury shares held by subsidiary (52,302) (36,805)
Decrease in treasury shares held by share trusts 1,282 -
Movement on foreign currency translation reserve (2,974) 2,332
Recognition of share-based payments 7,865 5,634
Profit after taxation 254,270 180,506
Loss on sale of treasury shares (53) (46)
Dividends declared (123,640) (81,016)
Balance at the end of the year 999,558 905,522
Comprising:
Share capital and premium 2,370 4,267
Foreign currency translation reserve 22,376 25,350
Capital redemption reserve 130 130
Share-based payment reserve 24,616 16,818
Distributable reserves 920,434 824,938
Outside shareholders interest 29,632 34,019
Total 999,558 905,522
CONDENSED GROUP SEGMENTAL REPORT
2008 2007
Audited Audited
R`000 R`000
Revenue
Inshore fishing 1,879,711 1,409,041
Midwater and deep-sea fishing 934,384 1,023,667
Commercial cold storage 188,381 176,186
Total 3,002,476 2,608,894
Operating profit before abnormal items
Inshore fishing 164,345 105,862
Midwater and deep-sea fishing 94,267 73,587
Commercial cold storage 58,672 57,274
Total 317,284 236,723
Total assets
Inshore fishing 697,947 604,834
Midwater and deep-sea fishing 283,247 280,829
Commercial cold storage 165,557 168,407
Financing 403,345 437,871
1,550,096 1,491,941
Deferred taxation 5,386 10,438
Total 1,555,482 1,502,379
Total liabilities
Inshore fishing 324,220 293,596
Midwater and deep-sea fishing 102,703 135,320
Commercial cold storage 34,247 35,979
Financing 50,021_ 99,377_
511,191 564,272
Deferred taxation 44,733 32,585
Total 555,924 596,857
NOTES
2008 2007
Audited Audited
R`000 R`000
1. Abnormal items
Net surplus /(loss) on disposal of property 1,684 (64)
Profit on change of interest in
subsidiary/businesses 809 7,920
Impairment loss on Western Australia lobster
fishing rights (1,476) (6,223)
Profit on disposal of Western Australia
lobster fishing rights 4,565 1,652
Reversal of prior years` provision for loans
in Namibian whitefish business 5,395 5,547
Provision reversed/(raised) for irrecoverable
loans 505 (1,180)
Profit on disposal of investment 243 -
Impairment loss on vessels and equipment - (1,839)
Impairment of non-current asset held for sale - (1,750)
Provision in respect of utilisation of pension
fund surplus - (1,514)
Abnormal profit before taxation 11,725 2,549
Taxation (319) 928
Abnormal profit after taxation 11,406 3,477
Number Number
of shares of shares
`000 `000
2. Elimination of treasury shares
Weighted average number of shares in issue 117,610 116,796
Less: treasury shares held by share trusts (14,375) (14,388)
Less: treasury shares held by subsidiary company (4,514) (1,542)
Weighted average number of shares on which
earnings per share and headline earnings
per share are based 98,721 100,866
3. Determination of Headline Earnings R`000 R`000
Profit after taxation attributable to
own shareholders 246,073 168,805
Adjusted for:
Net surplus on disposal of property, plant
and equipment (1,590) (349)
Profit on change of interest in subsidiary/
businesses (615) (7,852)
Impairment loss on Australian lobster
fishing rights 1,476 6,223
Profit on disposal of Western Australia lobster
fishing rights (4,565) (1,172)
Reversal of prior years` provision for loans
in Namibian whitefish business (5,395) (5,547)
Provision (reversed)/raised for
irrecoverable loans (505) 1,180
Profit on disposal of investment (243) -
Impairment loss on vessels and equipment - 2,548
Headline earnings for the year 234,636 163,836
2008 2007
Audited Audited
R`000 R`000
4. Dividends
Estimated dividend declared after
reporting date 127,883 87,242
Less dividends on treasury shares acquired prior
to last day to trade (2,275)
Dividend on shares issued prior to last day
to trade 475
Actual dividend declared after reporting date 85,442
5. Supplementary information
R`000 R`000
Cost of sales 2,131,946 1,773,442
Depreciation 67,255 67,399
Operating lease charges 18,876 18,208
Net foreign exchange profits (15,770) (5,308)
Capital expenditure 127,511 28,041
Expansion 89,384 492
Replacement 38,127 27,549
Capital commitments 125,778 85,474
Contracted 27,769 8,436
Not contracted 98,009 77,038
COMMENTS
Financial Results
Earnings per share for the year ended 30 September 2008 increased by 49%
compared to that of the previous year following improved results in most
business units. Headline earnings per share improved by 46%.
Group turnover reached R3,0 billion and the operating margin improved to
10.6%. Operating profit before abnormal items increased by 34% compared to
the prior year. The major abnormal items were cash recoveries relating to
previously impaired Namibian hake assets and a foreign exchange profit on
disposal of the remaining Western Australia lobster fishing rights.
Investment income was higher due to higher interest rates.
A final dividend of 130 cents per share has been declared, which together
with the interim dividend of 26 cents, brings the total dividend for the year
to 156 cents per share, an increase of 47% on the 2007 total dividend of 106
cents.
Review of operations
Inshore Fishing
Lucky Star canned fish sales were significantly up on last year due to
imports of large volumes of product to supplement the lower volumes from
local canneries. Supplies of canned fish from Namibia were in line with the
previous year.
The total allowable catch (TAC) for pilchard in calendar 2008 is 90,776 tons
(2007: 162,436 tons). Pilchard landings directed into canned fish production
were substantially lower than last year leading to lower production levels.
Fishing costs per ton increased as a consequence of higher input costs,
particularly fuel, and the effect of lower volumes on the absorption of fixed
overheads. Production yields however improved due to better quality fish and
the change to one production shift. The Namibian pilchard TAC was set at
15,000 tons (2007: 15,000 tons) and all quotas contracted to Etosha Fisheries
cannery were processed by financial year end.
Glenryck Foods, the group`s canned fish business in the UK, increased sales
of canned pilchard although at lower margins due to procurement constraints
while canned tuna volumes were lower but at better margins. Glenryck profits
improved considerably on those of last year.
Overall, profitability from canned fish was well above that of the previous
year.
The 2008 "A" season anchovy TAC was 397,500 tons and the "B" season 120,000
tons. Oceana`s landings of anchovy and red eye herring at 120,263 tons were
above the previous year (97,884 tons). However, reduced pilchard offal from
the cannery resulted in overall fish meal production volumes being similar to
the prior year. The average fish meal sales price for the year declined due
to the impact of lower prices in the first quarter. Profits from fish meal
were lower.
The 2007/08 west coast lobster TAC was 2,571 tons (2006/07: 2,856 tons) and
Oceana`s quotas amounted to 373 tons. The industry experienced poor catch
rates in Area 7 and unusually adverse weather conditions towards the end of
the season resulting in the TAC not being fully landed. Oceana catches were
266 tons (2006/07: 550 tons). Costs per unit were controlled through
rationalisation of processing facilities and vessels. Selling prices
increased due to strong demand from China which is the major export market
for Oceana lobster. Profit improved considerably.
Squid catches improved on those of last year. Higher average prices and
improved vessel performances resulted in increased profits.
French fries performed well driven by strong volume growth in the quick
service restaurant market.
Midwater and Deep-sea Fishing
The horse mackerel TAC in South Africa was unchanged at 31,500 tons. In
Namibia the TAC for 2008 was reduced to 230,000 tons (2007: 300,000 tons).
Oceana`s volumes reduced due to the lower TAC and fewer vessels catching in
the fishery. Oceana`s additional (third) Namibian vessel, acquired and
refurbished at a cost of R72 million, commenced fishing in August. All
Oceana`s vessels experienced good catch rates and the size mix of Namibian
fish improved. Fuel costs were substantially higher than in the previous
year.
Turnover increased by 14% despite the lower Namibian quotas mainly as a
result of higher volumes sourced from external vessels operating in
Mauritania and higher prices in US dollar and rand terms. Overall,
profitability from horse mackerel operations improved on the previous year.
Results from hake operations showed an improvement mainly as a consequence of
higher prices and the weaker rand exchange rate.
The tuna business was sold with effect from 27 January 2008.
Cold Storage
The cold store division experienced higher occupancies in most stores whilst
non-fruit handling activity levels were in line with the previous year.
Citrus volumes handled through the Maydon Wharf steri-fruit facility were
significantly lower than the previous year. Overall profits from cold storage
were similar to those of the previous year. The expansion at City Deep is
expected to be operational by mid December.
Prospects
The recent weakening of the rand exchange rate against major foreign
currencies should benefit earnings going forward. Whilst prices of certain of
Oceana`s export products are expected to reflect the impact of a general
slowing in the world economy this is unlikely to affect sales of more basic
food products such as pilchards and horse mackerel which comprise the
majority of the Group`s business. Overall an improvement in earnings in real
terms is expected in the year ahead.
On behalf of the board.
MA Brey AB Marshall
Chairman Chief Executive Officer
13 November 2008
DIVIDEND DECLARATION
Notice is hereby given that a final dividend No. 130 of 130 cents per share,
in respect of the year ended 30 September 2008, was declared on Thursday 13
November 2008. Relevant dates are as follows:
Last day to trade cum dividend - Friday 2 January 2009
Commence trading ex dividend - Monday 5 January 2009
Record date - Friday 9 January 2009
Dividend payable - Monday 12 January 2009
Share certificates may not be dematerialised or re-materialised between
Monday 5 January 2009 and Friday 9 January 2009, both dates inclusive.
By order of the board
JD Cole Secretary
13 November 2008
Date: 13/11/2008 13:36:40 Produced by the JSE SENS Department.
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