Established in 1918, Oceana Group is today the largest fishing company in South Africa and is also an important player in the fishing industry of Namibia. The company’s business includes the catching, processing, marketing and distribution of canned fish, hake, horse mackerel, fishmeal, fish oil, lobster and squid. Activities include mid-water, deep-sea and inshore fishing. Operations are conducted mainly through the operating divisions Lucky Star, Blue Continent Products and Oceana lobster, squid and French fries. CCS Logistics is a fourth division providing refrigerated warehouse facilities in Durban, Cape Town, Johannesburg and Walvis Bay.

The highest proportion of sales revenue is generated from South Africa and Namibia, but products are also distributed for sale to consumers in other African countries, Europe, Asia, the USA and Australia. The principal market is the lower-end consumer, but some products such as lobster, hake and some canned fish are targeted at higher-end consumers.

Today, the company employs over 6 000 direct and indirect employees and has a level 2 B-BBEE rating. Oceana shares are available to buy in a dual-listed structure on the Johannesburg Stock Exchange (JSE) and the Namibian Stock Exchange. JSE market cap stands at around R15 billion.

Despite dealing with changes in Total Allowable Catch regulations and pressured consumer spending, Oceana’s financial data for the 2015 year indicated a steady 5% rise in profits from R608 million to R642 million. This was driven by impressive growth in the canned fish and fishmeal division and the commercial cold storage division, with other divisions experiencing more muted growth. Results were significantly boosted by the addition of Daybrook, a vertically integrated Louisiana-based fishing company which focuses on marketing and selling derived fishmeal and fish oil products. Oceana decided to buy the company after exploring numerous offshore opportunities, and the decision has borne dividends. Performance was also boosted by the purchase of hake, lobster and pelagic fishing rights and related assets from Foodcorp for R355 million.

The group’s positive growth trend continued into the first six months of 2016, with profit increasing by 22% to R286 million from the corresponding period in 2015. This was attributed to increased canned fish and hake volumes, higher occupancy levels in the cold storage business and foreign exchange gains.

The group has forecast a strengthening of pricing in the fishmeal and fish oil sectors based on consistent demand, whilst consistent catches of pilchards, industrial fish and hake are anticipated for South Africa. As the group is materially a net exporter, overall performance should benefit from the prevailing exchange rates.

The live online stocks chart shows that Oceana share price surged from R37.40 in 2012 to R114.30 by September 2016, and there may be scope for more upside growth for investors who buy the stocks.

With continuing acquisitional and organic growth, Oceana has managed to boost profits and provide solid returns to shareholders. The fishing industry is however unpredictable, and lower overall catches are likely to affect Oceana share price and results in the long-term.

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