After facing low catch rates and peak fuel prices in the last three years, JSE-listed fishing company Sea Harvest Group has delivered a 58% increase in earnings before interest and taxes (Ebit) to R590-million for the six months ended June 30. 

The group’s Ebit margin also improved from 11% in the prior comparable six months to 13% in the six months under review.

Profit after tax attributable to shareholders increased by 87% year-on-year to R330-million, compared with R176-million of attributable profit having been recorded in the six months ended June 30, 2024.

Headline earnings a share increased by 91% year-on-year to 95c in the half-year under review, while gross profit grew to R1.3-billion, compared with R944-million in the prior half-year.

Basic earnings a share increased by 62% year-on-year to 98c.

Sea Harvest has managed to consistently grow its Ebit and gross profit at a compound annual growth rate of 17% and 14%, respectively, since the first half of 2020.

The group’s operating profit increased by 104% year-on-year to R633-million in the six months under review, which allowed its group net debt-to-Ebit ratio to improve to 2.1 times, compared with 2.5 times in December.

Sea Harvest’s profitability in the period was bolstered by the South African fishing business, with the company having leveraged a 5% increase in its total allowable catch for hake, as well as 10% higher selling prices for hake globally.  

The South African fishing business comprises hake and wild-caught pelagic fishing operations. The business generated Ebit of R578-million, marking a 74% year-on-year increase in the reporting period.

Two new freezer trawlers added to the fishing fleet, coupled with improved vessel utilisation, resulted in hake catch volumes increasing by 15% in the half-year under review.

Overall, Sea Harvest recorded a 49% increase in its hake catch rate per sea day to about 10 t a day in the half-year under review, while the fuel price per litre was 18% lower.

While the pelagic operations had record low anchovy and pilchard total allowable catch rates, Sea Harvest offset these impacts through strong red-eye catches, high fish oil yields and stringent cost management.

The aquaculture (abalone) segment was also under pressure owing to weak demand and lower selling prices in Hong Kong and China, which resulted in an earnings loss before interest and taxes of R39-million on the back of lower fair value of biological assets.

Fortunately, the aquaculture operations only account for 4% of the group’s revenue, while the South African fishing business constitutes 64% of revenue.

The Cape Harvest Food Group, which comprises 22% of group revenue from mostly dairy product sales, delivered a 73% year-on-year increase in Ebit to R61-million. Sea Harvest confirms higher milk flows, improved efficiencies and higher-value product mix in the dairy business resulted in a solid half-year performance for this segment.

The Australian operations, which comprise 10% of Sea Harvest’s group revenue mostly from prawn sales, recorded growth in earnings before interest, taxes, depreciation and amortisation from R9-million in the prior comparable six months to R27-million in the six months under review, mostly owing to improved pricing.

CEO Felix Ratheb says the group has been focused on cost reductions and maximising value for species that are in high demand globally. “Once catch rates turned in 2025, and fuel prices normalised, the business was proved fit for operational excellence and delivered a significantly improved performance,” he explains.

Since Sea Harvest’s listing on the JSE in 2017, its strategy to secure quota volumes, invest in assets, enhance margins and grow through acquisitions has built a substantial diversified fishing group.

The company exports fish and seafood products to more than 30 countries, with 60% of its revenue being derived from offshore sales.

Owing to its strong beneficiation activity in South Africa, Sea Harvest retains a strong pricing influence that underpins its resilience.

Sea Harvest is embarking on a new strategic phase over the next three years, including the restructuring of its Australian and abalone operations to prepare for long-term recovery as market fundamentals improve.

The group is also focused on reducing its debt and supporting a higher dividend through stronger cash flows, disciplined investment and selective noncore disposals.

Ratheb expects the group to maintain improved hake catch rates and continue benefitting from strong demand for various species and dairy products in the second half of the year; however, prawn catch volumes will likely remain below long-term averages owing to marine heatwaves affecting resource recovery, while abalone market conditions remain challenging with low selling prices and low demand in key markets.