Oceana group CFO Zaf Mahomed says strong local performance, operational upgrades and a focus on controllables are driving momentum, even as global fish oil prices correct from historic highs.
Oceana group CFO Zaf Mahomed has reaffirmed the company’s strategic direction and resilience in the face of global commodity headwinds, saying that recent investments and a disciplined operational focus are paying off across key business units.
“It is reassuring to know that what we have planned is coming to fruition,” Zaf says, reflecting on Oceana’s interim results released earlier this year.
“Our diversified business model, cash generation and strong balance sheet have allowed reinvestment through the business to enable us to benefit from continued strong demand and pricing across our product range.”
Strong local performance drives growth
With the group reporting a 2.9 percent increase in revenue to R5.2 billion, Zaf highlights the impact of recent capex into local operations.
“Cannery upgrades undertaken in our previous financial year have made it possible for us to drive higher local production volumes and improve efficiencies. This has resulted in an increased margin for Lucky Star Foods, which delivered strong results,” he says.
Zaf also pointed to an improved performance in the fishmeal and fish oil (Africa) segment saying, “Improved landings and plant performance contributed to stronger results, and our investments to upgrade vessels enabled them to spend more days at sea and capitalise on better catch rates.”
Adjusting to global market shifts
Despite these gains, Zaf acknowledges the drag on earnings from Oceana’s US business, Daybrook, due to a correction in global fish oil and fishmeal prices. Headline earnings per share fell 43.9 percent over the period, with operating profit declining 33.5 percent to R676 million, and profit after tax was down 43.7 percent to R402 million.
“While we remain focused on the controllables, it is essential to keep an eye on external trends,” says Zaf.
“The price of fish oil and fishmeal has come down from record highs, and this affected Daybrook’s financial performance. We are seeing a recovery in the Peruvian anchovy resource, which has brought more balance to global supply.”
He adds that Daybrook is actively adjusting to market shifts. “Given the evolving global tariff landscape, Daybrook is now focusing more on domestic pet food sales and exploring alternative market opportunities for fishmeal,” he says.
To shore up supply in a competitive landscape, Oceana also made a strategic decision to invest working capital into acquiring high-quality frozen fish for its Lucky Star operations.
“This inventory will enable us to meet sustained demand in the second half. The unwinding of this inventory will support cash generation. We will also continue to prioritise reducing debt, along with prudent management of costs and capital expenditure,” he says.
In line with its performance, the board declared an interim dividend of 110 cents per share. He believes Oceana’s consistent reinvestment into core operations positions it well for future growth.
“The capital invested in our business over the past few years puts Oceana in a good position for sustained growth and long-term value creation for all stakeholders,” he adds.
Resilience anchored in core operations
Oceana’s local operations have proved resilient in the first half of the year, with Lucky Star achieving record sales volumes and the wild caught segment also performing strongly. These gains, however, were not enough to fully offset the significant drop in fish oil prices globally, particularly in the US, where Daybrook’s performance softened after a strong comparative base last year.
The price correction followed improved Peruvian anchovy resource availability, which rebalanced global supply. Zaf says he will continue to remain focused on areas Oceana can control: efficiency, inventory management, and cost discipline, key levers as the company navigates external pressures in the second half of the year.
