JSE-listed Sea Harvest Group reported a stable set of interim results for the six month ended June 30, with a 7% increase in revenue to R2-billion and headline earnings a share of 61c, in line with the prior interim period.
The group says this was achieved despite the worst pandemic in over a century.
It notes that its results were driven by consistent performances from its South African fishing segment, the Cape Harvest Food Group segment (which includes Ladismith Cheese) and its Australian operations, which were, however, offset by continued challenges in the Aquaculture segment that was severely impacted by the effects of Covid-19.
CEO Felix Ratheb says that while Sea Harvest continued operating as an 'essential service' provider during lockdown, the impact of the pandemic and the Covid-19 lockdowns in the markets in which the group operates meant that it did so below normal capacity levels.
“Like many companies around the world, we encountered significant challenges on both the market and the supply chain sides of our business during the period under review.
"Lockdowns affected demand in our core markets of China, Italy and Spain as early as January. This trend continued throughout February and March and reached South Africa and Australia in April.
"We needed to adapt to market conditions globally by changing our product and market mix relatively quickly with a focus on retail, as out-of-home consumption declined to virtually zero worldwide. This clearly indicates the resilient and defensive nature of our business and the sectors in which we operate,” he says.
He notes that Covid-19 has had a “devastating” impact on the group’s aquaculture business that supplies abalone to the food service industry in Asia, particularly Hong Kong, compounded by the grounding of almost all air travel during the various lockdowns.
“Despite the supply chain side of the business also having its fair share of challenges with increased absenteeism, lower levels of efficiency and productivity, which was compounded by logistical bottlenecks, we are incredibly proud to have balanced supply with demand,” he notes.
According to Ratheb, Sea Harvest began implementing Covid-19 protocols in early March and dedicated significant resources to ensure the safety of its staff and limit the spread of the virus at its operations.
To date, more than R16-million has been spent at the South African operations on Covid-19 initiatives with an ongoing cost of about R4-million a month allocated to fight the virus for the remainder of this year.
“Stringent measures were put in place to prevent the virus from entering our workplaces. However, as with all companies across South Africa, once there were outbreaks within our communities, this manifested itself at some of our sites.
"The measures put in place were, and still are, a necessary requirement to ensure our staff operate in a safe working environment, and government, particularly our regulator (Department of Environment, Forestry and Fisheries), has been incredibly helpful and supportive throughout this period,” says Ratheb.
Thus far, the company has had a 100% recovery rate and delivered more than 10 000 food relief packages to benefit its staff and the communities it serves.
The group is adopting a cautious outlook for the remainder of this year.
“We cannot grow complacent when entering lower levels of lockdown and we will continue to prioritise the health and safety of our people. What we are seeing in Australia and Spain are second waves and new lockdowns.
"It has been a tough six months and I would like to thank all our staff and other stakeholders for their commitment throughout this most difficult of times,” says Ratheb.