Fishing group Oceana, in a voluntary trading update for the year ending September 30, 2024, anticipates a robust performance in headline earnings per share (HEPS), with expected growth between 15% and 19% compared to the previous year’s HEPS of 784.4 cents. The company forecasts HEPS between 900c and 935c.
Oceana’s profit has been bolstered in recent years by booming sales of its iconic Lucky Star brand in South Africa, driven by continued demand for affordable and shelf-stable protein
The group’s basic earnings per share, however, is set to decline, projected at 896c to 946c —down 14% to 18% from the 1094.1c reported last year. This drop is primarily attributed to a one-time gain of 314.4c per share from the sale of Commercial Cold Storage Logistics Group in the prior year, which does not impact headline earnings.
The group’s shares showed an intraday rise on Thursday, trading at R69.18, a gain of 3.64%by mid-morning, reflecting positive sentiment. Despite the recent uptick, the stock has faced year-to-date declines of 5.55% but gained 8.96% over three years.
The group’s annual results will be released on November 25, 2024.
Anthony Clark, an independent analyst at Small Talk Daily @smalltalkdaily, commented on social media platform X, that the last general update from Oceana was on September 16th.
“#OCE then went from R65 to R69 then came right back to current R66.75. The #OCE share price has gone nowhere since January 2023. I don’t believe the market will be happy with this trading update,” he said.
Clark said the first half of its 2024 results at 578.8 cents per share, up 84.6%, was powered by a surge in Daybrook Fisheries’ profits as fishmeal and fish oil prices were high.
Daybrook, which is a fully integrated operation processing menhaden into fishmeal and fish oil product, has dominated these results (+129% to R848m or 83.3% of profits), he said
However, in the second half of 2024 Oceana had some challenges, including global fishmeal and fish oil prices tumbled. However, lower fuel oil costs would have aided the firm in this reporting period.
“I’d wager #OCE is still in transition when Daybrook – due to market prices – is coming off a period of super profits – but the uplift from other parts of #OCE have not yet started to fully contribute. The FY24 results narrative will be key to guide for the new #OCE first-half especially wild caught fish which had a terrible H1,” he said on X.
Clark said Peru opens its second season this week with a bumper catch allocation so the market is nervous to where fishmeal and fish oil prices will go given the size of the total allowable catches allocation
Oceana is a well-run business and is solid, but a period of lower earnings from Daybrook is ahead, he added. “The remainder underlying assets will not fully balance out Daybrook in the next year or two.“
By 12.15pm Oceana’s share price was 3.73% higher at R69.24 on the JSE yesterday, up 8.96% in three years.
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