Sea Harvest Group Limited Financial Results for the Year Ended 31 December 2020
Sea Harvest Group Limited
Incorporated in the Republic of South Africa
Reg no: 2008/001066/06
JSE share code: SHG ISIN: ZAE000240198
"Sea Harvest" or "the Company" or "the Group"
SEA HARVEST GROUP LIMITED FINANCIAL RESULTS
for the year ended 31 December 2020
1. KEY PERFORMANCE INDICATORS
KEY PERFORMANCE INDICATORS CHANGE YEAR ENDED YEAR ENDED
31 DECEMBER 31 DECEMBER
Revenue (R'000) 10% 4 375 339 3 966 452
International revenue mix (%) 46 44
Gross profit (R'000) 17% 1 480 761 1 270 815
Gross profit margin (%) 34 32
Operating profit (R'000) 5% 629 260 599 580
Operating profit margin (%) 14 15
Profit for the year (R'000) 1% 397 848 395 513
Headline earnings (R'000) 3% 420 909 410 417
Weighted average number of shares ('000) 279 177 276 366
Basic headline earnings per share (HEPS) (cents) 2% 150.8 148.5
Ordinary dividend per share (cents) 45 45
Special dividend per share (cents) - 5
Net asset value per share (cents) 12% 986.5 881.9
ZAR: Euro average exchange rate* 17% 18.81 16.09
ZAR: AUD average exchange rate* 15% 11.54 10.04
Closing share price (cents) 1 426 1 455
* Average spot exchange rate at which sales were recorded.
2. SHORT-FORM ANNOUNCEMENT
During one of the worst pandemics facing the world in recent times, resulting in significant disruptions to markets and supply chains, the Sea Harvest Group
proved its resilient and defensive nature in delivering headline earnings for the year ended 31 December 2020 of R421 million (2019: R410 million), 3% ahead
of 2019, whilst earnings per share increased 3% to 154.3 cents per share (2019: 149.3 cents per share).
Group revenue for the year increased 10% to R4.38 billion (2019: R3.97 billion), benefiting from good performances from the South African Fishing segment,
the Cape Harvest Foods segment (which includes Ladismith Cheese) and the Australian operations, offset by continued challenges in the Aquaculture segment
which was severely impacted by the effects of COVID-19.
While local and international retail markets have benefited as a result of an increase in in-home consumption, local and international foodservice markets
have seen a slowdown as a result of various lockdown levels being implemented worldwide. This, together with supply chain disruptions, has resulted in a
softening of operating margins.
Revenue for the year from the South African Fishing segment increased 12% to R2.76 billion (2019: R2.47 billion), while the Cape Harvest Foods segment
delivered revenue of R1.02 billion (2019: R990 million), which is 3% higher than 2019. Sea Harvest Australia delivered a 24% increase in revenue to R543
million for the year (2019: R438 million), while revenue in the Aquaculture segment decreased 23% to R53 million (2019: R69 million). The significant
decrease in the Aquaculture segment is a direct result of the inability to access markets in the Far East due to lockdowns in the region and the curtailment
of air freight from South Africa.
With cost of sales increasing 7% on the back of good cost containment and lower fuel prices, and despite absorbing R24 million in COVID-19-related costs,
gross profit for the year increased 17% to R1.48 billion (2019: R1.27 billion), with the gross profit margin expanding to 34% (2019: 32%).
Other operating losses of R8 million (2019: other operating gain of R74 million) includes R28 million (2019: Nil) of insurance proceeds, largely relating to
vessel breakdowns, offset by foreign exchange hedge losses of R68 million (2019: R45 million hedge gains) for the year, mainly due to the Group's export and
fuel hedges being out of the money.
Selling and distribution expenses, marketing expenses and other operating expenses increased 13% to R843 million (2019: R745 million), and, as a percentage
of revenue, increased to 19.3% (2019: 18.8%) as a result of inflation, a greater retail mix, COVID-19-related costs and supply chain disruptions.
Fair value losses of R4.6 million (2019: fair value gains of R34 million) includes a R2.6 million gain (2019: R6 million gain) on biological assets in the
Aquaculture segment. The 2019 fair value gains of R34 million includes the once-off R39 million gain relating to the non-achievement of the Viking
In order to ensure that the Group provided a safe working environment at its sea-based and land-based operations, the Group incurred COVID-19-related costs
of R39 million in the provision of personal protective equipment, transport, care kits, food parcels, screening and testing, allowing operations to continue
to operate safely.
Despite supply chain disruptions, including lower throughput and lower levels of productivity, higher selling and distribution costs, a shift in market mix,
COVID-19 costs, and a R73 million operating loss in the Aquaculture segment, the Group delivered operating profit before fair-value gains and associate
income of R629 million (2019: R600 million) for the year, 5% higher than the prior year, with the operating profit margin diluting to 14% (2019: 15%).
Net finance costs for the year decreased to R72 million (2019: R101 million) as a result of lower interest rates and the settling of debt during the period.
Profit after tax attributable to shareholders of Sea Harvest for the year increased 4% to R431 million (2019: R412 million), while headline earnings
increased 3% to R421 million (2019: R410 million). Basic headline earnings per share (HEPS) increased 2% to 150.8 cents per share (2019: 148.5 cents per
The Group has declared a full and final cash ordinary dividend of 45 cents per ordinary share in respect of the year ended 31 December 2020, in line with
the prior year.
Driving transformation within Sea Harvest and the fishing industry more broadly, is central to Sea Harvest's existence and strategy. The Group is proud to
have retained its Level 1 B-BBEE contributor status. The Group invests significant resources in skills development, employment equity, supplier and
enterprise development initiatives, as well as projects focused on job creation, the youth, and rural development.
The Group would like to thank the Department of Environment, Forestry and Fisheries (DEFF) for the efficient manner it continues to handle the COVID-19
pandemic, enabling continuity of operations, hence saving jobs, livelihoods and providing food security to the nation.
The Board would also like to thank management and employees for their loyalty, dedication, care and professionalism in contributing to the success of the
Group in these most trying of times.
This announcement has not been audited by the Group's external auditors. The Group's auditors, Deloitte and Touche, have reviewed the full announcement and
expressed an unmodified conclusion.
This short-form announcement is the responsibility of the directors of the Group. It contains only a summary of the information in the full announcement and
does not contain full or complete details. The Full Announcement can be found at: https://senspdf.jse.co.za/documents/2021/jse/isse/shge/SHGYE2020.pdf
Copies of the Full Announcement are also available for viewing on the Group's website at: www.seaharvestgroup.co.za or may be requested in person, at the
Group's registered office or the office of the sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on consideration of the Full Announcement, as a whole.
3. CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 4. A gross and final ordinary cash dividend amounting to 45 cents per share in respect of the year ended 31
December 2020 was recommended on Monday, 1 March 2020, out of current earnings. Where applicable, the deduction of dividends withholding taxation at a rate
of 20% will result in a net ordinary dividend amounting to 36 cents per share.
The number of ordinary shares in issue at the date of this declaration is 294 293 814.
The Company's taxation reference number is 9223/794/16/6.
Relevant dates in respect of the ordinary dividend are as follows:
Last day to trade cum dividend Tuesday, 6 April 2021
Commence trading ex dividend Wednesday, 7 April 2021
Record date Friday, 9 April 2021
Dividend payable Monday, 12 April 2021
Share certificates may not be rematerialised between Wednesday, 7 April 2021 and Friday, 9 April 2021, both dates inclusive.
By order of the Board
1 March 2021
Date: 1 March 2021
Sponsor: The Standard Bank of South Africa Limited
Date: 01-03-2021 08:00:00
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