Oceana’s diversification strategy has enabled it to deliver higher headline earnings, with the performance of its Lucky Star and Wild Caught Seafood businesses countering weaker global prices for fish oil and fishmeal.
For the six months ended 31 March 2026, the global fishing and food processing company increased headline earnings per share by 7.7%. While revenue declined by 6% to R4.9 billion, the gross profit margin improved by 30 basis points to 28.1%, leading to an operating profit of R665 million, largely in line with the prior period.
The Group declared an unchanged dividend of 110 cents per share.
Net debt declined significantly to R1.7 billion contributing to net interest expenses decreasing by R45 million. Capital repayments in South Africa and the United States, together with lower working capital levels in South Africa, contributed to a marked improvement in the net debt to EBITDA ratio which fell to 1.1 times from 2.2 times in the prior period.
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“Investing in our fleet and factories, paying down debt and controlling what we can has ensured resilience in this unpredictable environment.” said Neville Brink, Oceana CEO.
Lucky Star foods delivered a strong margin-driven performance, selling 5.1 million cartons, slightly exceeding the record set in the prior period. Sales volumes for canned fish remained stable, while strong demand drove a significant increase in canned meat sales.
Although the global supply of frozen fish was limited, leading to a sharp decline in canning production volumes in South Africa, operating profit improved. This improvement was driven by lower cost of imported fish, increased local pilchard landings, a favourable sales mix and reductions in logistics and storage costs.
African fishmeal and fish oil production volumes were significantly down due to lower landings of industrial fish and fewer pilchard trimmings from Lucky Star’s canneries. Sales volumes declined by 90%, resulting in a much lower results.
In the United States, Daybrook delivered a reasonable operating performance. Fishmeal sales volumes remained in line with the prior period, while fish oil volumes were 7% lower due to seasonality and sales timing. Weaker US dollar pricing for both fishmeal and fish oil caused a decrease in revenue and operating profit, with results further affected by the appreciation of the Rand, which reduced the value of foreign earnings on translation.
In the Wild Caught Seafood segment, higher hake volumes improved operational performance and earnings. This increase was driven by better catch rates and investment in fleet upgrades that improved vessel reliability and days at sea. These improvements supported sales volume growth of 10%. Strong European demand and good pricing, sustained by lower global white fish supply and a fuel-hedging gain, further contributed to positive results for hake.
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Horse mackerel sales volumes grew by 13%, with South African operations benefiting from improved catch rates. In Namibia, catch rates decreased, but lower fuel prices and quota usage fees helped reduce operating costs. Additionally, a strong increase in the average Rand sales price, together with a fuel-hedging gain, contributed to a significantly higher operating profit.
Challenging industry-wide squid fishing conditions persisted and catch volumes declined. Although European prices increased, this was insufficient to offset a sales volume decline and a stronger rand, resulting in a weaker operating performance.
Looking ahead, Lucky Star’s focus remains on growing consumption and expanding the brand, driving volume growth through availability, affordability and expanding the product range, categories and markets. An immediate priority is to ensure a secure supply of imported frozen fish, while an increase in the total allowable catch should make more locally caught pilchards available.
The South African and US fishmeal and fish oil businesses are positioned to benefit from recent market dynamics, including a 36% reduction in the Peruvian anchovy first-season quota and challenging fishing conditions in Peru, which are pushing up global fishmeal and fish oil prices. Additionally, the emerging El Niño climatic effect is raising concerns about further supply limitations, which is expected to continue to support higher prices.
Global demand for healthy, sustainable protein should ensure continued firm pricing for Wild Caught Seafood. However, rising fuel costs, increased freight expenses and a stronger Rand are concerns.
To improve fleet versatility, a dual-purpose vessel which can catch both hake and horse mackerel, has been acquired and will be operational in January 2027, following the completion of a refit.
“Following investments in assets and moves to reduce unpredictability in the business in recent years, Oceana is in a good position to capitalise on cyclical improvements in resource availability, market demand and stronger pricing,” said Neville Brink CEO of Oceana Group.
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