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OCE
OCE
OCE - Oceana - Interim report and dividend declaration for the six months ended
31 March 2012
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration number: 1939/001730/06)
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
("Oceana" or "the group" or "the company")
Interim report and dividend declaration for the six months ended 31 March 2012
Condensed group statement of comprehensive income
Unaudited Audited
six months ended year
31 March ended
30 Sept
Note 2012 2011 Change 2011
R`000 R`000 % R`000
Revenue 2 132 271 1 765 427 21 3 657
196
Cost of sales 1 342 227 1 137 205 18 2 299
778
Gross profit 790 044 628 222 26 1 357
418
Sales and distribution 203 621 151 271 35 338
927
expenditure
Marketing expenditure 17 577 21 949 (20) 44 389
Overhead expenditure 268 314 234 083 15 461
487
Net foreign exchange 729 8 271 (74)
loss/(profit)
Operating profit before abnormal 299 803 212 648 41 512
689
item
Abnormal item 3 (34 750)
Operating profit 265 053 212 648 25 512
689
Dividends received and accrued 5 552 7 458 (26) 13 141
Net interest received 11 998 2 815 9 813
Profit before taxation 282 603 222 921 27 535
643
Taxation 102 835 79 300 30 189
426
Profit after taxation 179 768 143 621 25 346
217
Other comprehensive income
Movement on foreign currency (433) (987) 3 512
translation reserve
Movement on cash flow hedging (1 168) 5 478 9 853
reserve
Other comprehensive income, net (1 601) 4 491 13 365
of taxation
Total comprehensive income for 178 167 148 112 20 359
582
the period
Profit attributable to:
Shareholders of Oceana Group 168 088 138 920 21 333
170
Limited
Non-controlling interests 11 680 4 701 13 047
179 768 143 621 25 346 217
Total comprehensive income
attributable to:
Shareholders of Oceana Group 166 487 143 411 16 346
535
Limited
Non-controlling interests 11 680 4 701 13 047
178 167 148 112 20 359 582
Weighted average number of 7 100 069 99 842 99 868
shares on which earnings per
share is based (000`s)
Adjusted weighted average number 107 964 106 524 106
544
of shares on which diluted
earnings per share is based
(000`s)
Earnings per share (cents)
Basic 168.0 139.1 21 333.6
Diluted 155.7 130.4 19 312.7
Dividends per share (cents) 45.0 37.0 22 220.0
Headline earnings per share
(cents)
Basic 167.9 139.2 21 333.7
Diluted 155.6 130.5 19 312.7
Condensed group statement of financial position
Unaudited Audited
31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
Assets
Non-current assets 584 116 553 223 600 373
Property, plant and equipment 400 601 390 980 415 623
Fishing right 2 912
Trademark 17 961 16 008 18 101
Deferred taxation 14 561 9 561 13 204
Investments and loans 148 081 136 674 153 445
Current assets 1 540 607 1 218 186 1 422 623
Inventories 517 318 426 621 489 850
Accounts receivable 554 136 556 935 536 913
Cash and cash equivalents 469 153 234 630 395 860
Total assets 2 124 723 1 771 409 2 022 996
Equity and liabilities
Equity
Share capital and premium 29 006 24 904 26 293
Foreign currency translation reserve (2 980) (7 047) (2 547)
Capital redemption reserve 130 130 130
Cash flow hedging reserve 753 (2 453) 1 922
Share-based payment reserve 53 278 44 829 49 599
Distributable reserves 1 266 408 1 127 045 1 283 031
Interest of own shareholders 1 346 595 1 187 408 1 358 428
Non-controlling interests 42 201 32 981 40 923
Total equity 1 388 796 1 220 389 1 399 351
Non-current liabilities 101 379 91 266 95 363
Liability for share-based payments 63 713 47 837 53 694
Deferred taxation 37 666 43 429 41 669
Current liabilities 634 548 459 754 528 282
Accounts payable and provisions 590 257 433 804 516 966
Bank overdrafts 44 291 25 950 11 316
Total equity and liabilities 2 124 723 1 771 409 2 022 996
Number of shares in issue net of treasury 100 113 99 876 99 939
shares (000`s)
Net asset value per ordinary share (cents) 1 345 1 189 1 359
Total liabilities excluding deferred
taxation:
Total equity (%) 50 42 42
Total borrowings: Total equity (%) 3 2 1
Condensed group statement of changes in equity
Unaudited Audited
six months ended year ended
31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
Balance at the beginning of the period 1 399 351 1 246 470 1 246 470
Total comprehensive income for the period 178 167 148 112 359 582
Profit after taxation 179 768 143 621 346 217
Movement on foreign currency translation (433) (987) 3 512
reserve
Movement on cash flow hedging reserve (1 168) 5 478 9 853
Shares issued 2 713 1 775 2 524
Movement in treasury shares held by share 640
trusts
Recognition of share-based payments 3 713 4 812 9 628
Loss on sale of treasury shares (52)
Additional non-controlling interest arising 552
on acquisition
Dividends declared (195 148) (180 780) (219 993)
Balance at the end of the period 1 388 796 1 220 389 1 399 351
Comprising:
Share capital and premium 29 006 24 904 26 293
Foreign currency translation reserve (2 980) (7 047) (2 547)
Capital redemption reserve 130 130 130
Cash flow hedging reserve 753 (2 453) 1 922
Share-based payment reserve 53 278 44 829 49 599
Distributable reserves 1 266 408 1 127 045 1 283 031
Non-controlling interests 42 201 32 981 40 923
Balance at the end of the period 1 388 796 1 220 389 1 399 351
Condensed group statement of cash flows
Unaudited Audited
six months ended year ended
31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
Cash flows from operating activities
Operating profit before abnormal items 299 803 212 648 512 689
Adjustment for non-cash and other items 17 547 42 825 97 647
Cash operating profit before working capital 317 350 255 473 610 336
changes
Working capital changes (9 805) 79 905 118 875
Cash generated from operations 307 545 335 378 729 211
Interest and dividends received 13 211 4 700 14 320
Interest paid (1 213) (1 885) (2 872)
Taxation paid (78 032) (63 375) (169 132)
Dividends paid (195 230) (180 719) (219 993)
Cash inflow from operating activities 46 281 94 099 351 534
Cash outflow from investing activities (12 434) (36 877) (115 827)
Capital expenditure (23 468) (59 601) (125 988)
Proceeds on disposal of property, plant and 118 43 460
equipment
Net movement on loans and advances 3 239 1 849 (12 870)
Acquisition of business (258)
Repayment received on preference share 7 677 20 832 22 829
investment
Cash inflow from financing activities 5 860 6 336 4 902
Proceeds from issue of share capital 2 713 1 775 3 112
Short-term borrowings raised 3 147 4 561 1 790
Net increase in cash and cash equivalents 39 707 63 558 240 609
Cash and cash equivalents at the beginning of 384 544 145 116 145 116
the period
Effect of exchange rate changes 611 6 (1 181)
Cash and cash equivalents at the end of the 424 862 208 680 384 544
period
Notes
1. Basis of preparation
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the AC 500 standards as
issued by the Accounting Practices Board, the information as required by IAS 34:
Interim Financial Reporting and the requirements of the Companies Act of South
Africa. The report has been prepared using accounting policies that comply with
IFRS which are consistent with those applied in the financial statements for the
year ended 30 September 2011. The condensed financial information was prepared
under the supervision of the group financial director, RG Nicol CA(SA).
The results have not been audited or reviewed by the group`s auditors, Deloitte
& Touche.
Unaudited Audited
six months ended year ended
31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
2. Segmental results
Revenue
Inshore fishing 1 274 643 1 126 534 2 268 296
Midwater and deep-sea fishing 747 980 553 162 1 170 907
Commercial cold storage 109 648 85 731 217 993
Total 2 132 271 1 765 427 3 657 196
Operating profit before abnormal
item
Inshore fishing 109 293 44 910 185 160
Midwater and deep-sea fishing 173 914 156 068 273 795
Commercial cold storage 16 596 11 670 53 734
Total 299 803 212 648 512 689
Total assets
Inshore fishing 934 115 922 705 926 776
Midwater and deep-sea fishing 348 440 271 313 319 370
Commercial cold storage 210 374 196 526 214 342
Financing 617 233 371 304 549 304
2 110 162 1 761 848 2 009 792
Deferred taxation 14 561 9 561 13 204
Total 2 124 723 1 771 409 2 022 996
Total liabilities
Inshore fishing 323 214 273 223 310 232
Midwater and deep-sea fishing 283 184 172 150 212 653
Commercial cold storage 40 144 29 217 43 493
Financing 51 719 33 001 15 598
698 261 507 591 581 976
Deferred taxation 37 666 43 429 41 669
Total 735 927 551 020 623 645
3. Abnormal item
Competition Commission 34 750
administrative penalty
Abnormal expense before taxation 34 750
Taxation
Abnormal expense after taxation 34 750
4. Determination of headline
earnings
Profit after taxation 168 088 138 920 333 170
attributable to own shareholders
Adjusted for:
Net (surplus)/loss on disposal of (68) 62 57
property, plant and equipment
Total tax effect of adjustments 20 (18) (17)
Headline earnings for the period 168 040 138 964 333 210
5. Dividends
Estimated dividend declared after 45 061 36 966 182 906
reporting date
Dividend on shares issued prior 9 213
to last day to trade
Actual dividend declared after 36 975 183 119
reporting date
6. Supplementary information
Depreciation 38 439 33 054 77 209
Operating lease charges 17 499 10 534 28 763
Capital expenditure 23 468 59 601 125 988
Expansion 2 006 17 960 23 321
Replacement 21 462 41 641 102 667
Budgeted capital commitments 82 737 100 196 141 545
Contracted 32 822 44 071 23 981
Not contracted 49 915 56 125 117 564
Number of Number of Number of
shares shares shares
`000 `000 `000
7. Elimination of treasury shares
Weighted average number of shares in 119 308 119 132 119 157
issue
Less: treasury shares held by share (14 145) (14 196) (14 195)
trusts
Less: treasury shares held by (5 094) (5 094) (5 094)
subsidiary company
Weighted average number of shares on 100 069 99 842 99 868
which earnings per share and headline
earnings per share are based
8. Events after the reporting date
Other than the item referred to in note 3 above, no events occurred since the
reporting date that may have an impact on the group`s reported financial
position at 31 March 2012.
Comments
Financial results
Basic earnings per share and basic headline earnings per share for the six
months ended 31 March 2012 rose by 21% due to improved results from each of the
three operating segments.
Revenue for the period increased by 21% and operating profit before abnormal
items increased by 41% compared to the first half of the previous year.
Provision for an administrative penalty agreed with the Competition Commission
has been disclosed as an abnormal item in the statement of comprehensive income.
An interim dividend of 45 cents per share has been declared (2011: 37 cents per
share).
Review of operations
Inshore fishing
The 2012 Total Allowable Catch (TAC) for pilchard in South Africa is 100 595
tons (2011: 90 000 tons). Pilchard landings and processing yields at the St
Helena Bay cannery were good. The Namibian pilchard TAC for 2012 is 31 000 tons
(2011: 25 000 tons) and fishing commenced in April.
Canned fish sales volumes on the domestic market increased meaningfully. This
was partially due to a more robust supply chain with imported product continuing
to supplement local supplies. Canned fish sales in the United Kingdom continued
to be impacted by pricing pressure.
Profit from canned fish operations was well above that for the same period last
year.
The initial anchovy A season TAC for 2012 is 202 718 tons (final A season TAC
for 2011: 270 291 tons). Current season landings of anchovy and redeye herring
to the group`s fishmeal plants were significantly higher than in the previous
season resulting in improved production efficiencies and lower costs per ton of
manufactured product. Sales on the local market had increased whilst export
volumes were lower due to weak international demand and prices. Fishmeal made a
loss in line with budget expectations. The seasonal loss was materially lower
than the prior year.
The TAC for west coast lobster increased to 2 425 tons (2011: 2 286 tons). Quota
available to Oceana for the current season amounts to 327 tons (2011: 325 tons).
Catch rates were lower than those of last year and landings for the season to
date were lower, resulting in higher production costs per kilogram. However,
higher export prices and the effect of the weaker currency translated into
improved selling prices in rand terms. Profits from lobster were lower for the
six month period.
Squid catches were well below the first half of last year with the industry as a
whole reporting very poor catch rates. Despite poor economic conditions in our
European export markets the lack of supply resulted in higher prices. The squid
business made a small loss for the period.
The French fry operation returned to profitability due to increased volumes and
lower production costs.
Midwater and deep-sea fishing
The Namibian horse mackerel TAC for 2012 is 320 000 tons (2011: 310 000 tons).
The initial allocation of quotas to existing rights holders (100 000 tons) was
materially lower than in the previous year in order to accommodate new rights
holders who received allocations totalling 100 000 tons. An amount of 90 000
tons of the TAC is still to be allocated by the minister. In South Africa the
maximum precautionary catch limit for directed catch of horse mackerel remained
at 31 500 tons.
Catches were higher in Namibia for the six-month period as a result of
additional quota being made available in the final quarter of calendar 2011 when
the company had four vessels in operation. Increases in fuel and other costs
were contained on a per ton basis due to higher volumes caught. Significant
additional costs were incurred in contracting the catching and marketing of
quota allocated to new rights holders.
Conditions in our major markets remained firm with the exception of the
Democratic Republic of Congo where prices softened in recent months.
Whilst margins were under pressure, profit from horse mackerel showed a moderate
increase.
Results from hake operations showed a substantial improvement mainly as a
consequence of higher prices.
Cold storage
Revenue increased by 26% due mainly to improved occupancy levels particularly in
the second quarter but also due to the additional capacity at the City Deep
facility. The impact of higher occupancy levels have been offset to some extent
by keener rates charged to customers. Overall profit from the cold storage
business improved considerably.
Competition Commission
A Consent Agreement was concluded with the Competition Commission in relation to
their investigation into the small pelagic fishing industry in terms of which
the company has agreed to pay an administrative penalty amounting to R34.75
million. The penalty is subject to approval by the Competition Tribunal. A
provision of R34.75 million has been raised in the financial results for the
half year to 31 March 2012. This matter was previously disclosed as a contingent
liability.
Acquisition
The proposed transaction to purchase the hake, horse mackerel and south coast
lobster fishing rights and related assets of the Lusitania group and associated
companies as well as its cold storage business is still subject, inter alia, to
the approval of the Minister of Agriculture, Forestry and Fisheries as well as
the Competition Commission. Should the acquisition become unconditional, it is
expected to be effective in August 2012.
Prospects
The group is well positioned to take advantage of opportunities for organic and
acquisitive growth. Earnings for the full year are expected to exceed those of
last year. The forecast information has not been reviewed or audited by the
group`s auditors.
On behalf of the board
MA Brey FP Kuttel
Chairman Chief executive officer
11 May 2012
Cash dividend declaration
Notice is hereby given of dividend number 137. A gross interim dividend
amounting to 45 cents per share, in respect of the year ending 30 September
2012, was declared on Friday, 11 May 2012. Where applicable the deduction of
dividend withholding tax at a rate of 15% will result in a net dividend
amounting to 38.25 cents per share.
The company has no credits available in respect of secondary tax on companies.
The number of ordinary shares in issue at the date of this declaration is 119
342 157. The company`s tax reference number is 9675/139/71/2. Relevant dates are
as follows:
Last day to trade cum dividend Friday, 22 June 2012
Commence trading ex dividend Monday, 25 June 2012
Record date Friday, 29 June 2012
Dividend payable Monday, 2 July 2012
Share certificates may not be dematerialised or re-materialised between Monday,
25 June 2012, and Friday, 29 June 2012, both dates inclusive.
By order of the board
JC Marais
Company secretary
11 May 2012
Company information
Directors:
MA Brey (chairman), FP Kuttel* (chief executive officer),
ZBM Bassa, PG de Beyer, ABA Conrad*, PB Matlare, RG Nicol*, S Pather,
PM Roux, NV Simamane, TJ Tapela (* executive)
Registered office:
9th Floor, Oceana House, 25 Jan Smuts Street, Foreshore, Cape Town 8001
Transfer secretaries:
Computershare Investor Services Proprietary Limited, 70 Marshall Street,
Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsor South Africa:
The Standard Bank of South Africa Limited
Sponsor Namibia:
Old Mutual Investment Services (Namibia) Proprietary Limited
Company secretary: JC Marais
Website:
www.oceana.co.za
Date: 11/05/2012 16:30:16 Produced by the JSE SENS Department.
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