12 May 2020, Cape Town – JSE-listed Premier Fishing and Brands Limited (Premier), one of the largest black-owned and managed fishing companies in South Africa, released an admirable set of consolidated, unaudited interim results for the 6-months’ ending 29 February 2020, despite the impact of exogenous factors on the business.
Highlights :
– Revenue decreased to R215 million from R287 million
– Earnings before interest, depreciation and amortisation (EBITDA decreased to R28 million from R69 million
– Property, plant and equipment increased by 20% to R441 million from R368 million
– Net Asset Value (NAV) per share decreased to 307.11 cents as compared to 318.15 cents per share during 2019
– Gross profit decreased by 38% to R80 million from R130 million
– Profit after tax decreased to R20 million from R55 million
Premier is a vertically integrated fishing company specialising in the harvesting, processing, marketing and sales and distribution of marine products. The Group owns and manages its factories, abalone farm, facilities and fishing vessels and prides itself in being one of the most transformed in the fishing industry in terms of its management and employees.
During the interim period, Premier’s earnings before interest, depreciation and amortisation (EBITDA) decreased to R28 million from R69 million, with profit after tax reduced to R20 million from R55 million. Revenue decreased to R215 million from R287 million.
Group headline earnings decreased to R13 million from R35 million, while headline earnings per share (HEPS) decreased to 4.94 cents per share from 13.49 cents per share and earnings per share (EPS) decreased to 5.43 cents per share from 13.44 cents per share.
Reflecting on the period under review, Ms Rushaan Isaacs, the Group chief executive officer of Premier Fishing and Brands said, “I am satisfied with our interim results despite the incredible challenges Premier has faced over the past 6-months. Our results are satisfactory and better than expected, given that we are still facing these challenges.”
The Group delivered pleasing results for the period as a consequence of consistent performance across most of its operating divisions. This, despite the negative impact that the socio-political unrest in the Far East and the Coronavirus (COVID-19) has had on the fishing industry globally. The demand for Premier’s branded products remains strong but COVID-19 has severely impacted the export market of West Coast Rock Lobster (WCRL) and abalone in the Far East, squid in the Italian and Spanish export markets and the export of South Coast Rock Lobster (SCRL) to the USA.
Isaacs adds, “We are concerned about the impact that several challenges are having on our business, however, the Group is in a financially stable position. Premier has no debt, is cash positive and we have put strategies in place to mitigate some of the losses the Group has suffered because of the pandemic.”
Other challenges impacting the Group includes the decrease experienced in the Total Allowable Catch (TAC) of WCRL, which has persisted since the previous financial year. Premier experienced the lowest landings of squid, which is industry-wide, as compared to the previous fishing season.
Premier’s prime fishing products include lobster (south and west coast) – exported to the US, China, Europe and the Far East – abalone (farmed and wild), octopus, squid, swordfish, pilchards, anchovy, hake, horse mackerel, general food products and environmentally friendly agri-biotechnology products such as Seagro fertiliser, a by-product of fishmeal.
Group chief financial officer, Mr. Brent Robertson, explains further, “The Group experienced other exogenous factors, with the most significant one being the low catch rates industry wide in the squid division, which has led to decline in revenue and in turn profitability. This division has the tendency to go through seasonal trends, but the potential and outlook in this division remains a positive one. Furthermore, the Group has put cost containment measures in place to preserve as much cash as possible, so that once the pandemic is under control, the Group can continue to focus on its growth strategies for the abalone farm expansion and to pursue any other potential acquisitions.”
Looking to the future, Premier announced that the Group is well-positioned to pursue further acquisitions which are aligned to its business, and to further implement its organic growth strategies. Although fishing and farming are rated “essential services”, parts of the expansion of the abalone farm has been put on hold during the lockdown period. Premier expects to increase the production capacity from 120 tons to around 300-350 tons per annum of cultivated abalone once the expansion is completed. Premier will thus be well-positioned to meet the international demand for its products and brand. To date, the farm has already successfully increased its production by 58% from 120 tons to 190 tons.
The WCRL division remains a challenge for the fishing industry overall. Premier contributes positively as an industry player to ensure that the WCRL resource remains sustainable for the foreseeable future.
Premier places sustainable fishing and job creation at the core of its business ethos. It is also compliant with all industry laws and regulations in South Africa, and its fishing methods and standards are in line with global standards. Additional water and animal testing is currently taking place at all of Premier’s factories and farms.
Group CEO of the majority shareholder, African Equity Empowerment Investments Limited (AEEI), Ms Valentine Dzvova, commented, “I am pleased with Premier’s results for the first half of the 2020 financial year and wish to congratulate the Premier team on their efficiency and resilience, as well as maintaining their focus on growth, job creation, development and sustainability. This, despite the global pandemic. “
Dzvova continues, “The growth plans for the Premier Group are taking place in earnest and we look forward to the output that this will generate in the future for all its shareholders and stakeholders, including community building.” “The long-term outlook for the Group is an optimistically positive one. In the short-term, we are constantly revising our mitigating strategies and plans to address the impacts of the pandemic by compiling and understanding scientific data to rebuild Premier’s position in the markets. As we do so, aquaculture will remain a key element of Premier’s long-term strategy”, concludes Isaacs.
Premier employs up to 1 500 people on the coastal regions of South Africa and is committed to contributing towards job creation for previously disadvantaged communities, to meet the Group’s growth plans and empowerment targets.
ENDS
To arrange for an interview with Ms Rushaan Isaacs, CEO of Premier Fishing and Brands Limited, contact:
Feroza Petersen
Communications and Marketing manager
Tel: 021 427 1500
Email: Feroza@aeei.co.za
Web: premierfishing.co.za