Sea Harvest navigates volatile market conditions for the year to 31 December 2022

7 March 2023
  • 10% lower available volumes as a result of quota losses from the Fishing Rights Allocation Process (FRAP) and a decrease in the Total Allowable Catch (TAC)
  • Unprecedented input cost increases, with R361 million in additional costs as a result of a 90% increase in the fuel price, above inflation cost increases, and load shedding
  • Under these challenging trading conditions:
  • Revenue was up in all segments, with firm demand in all markets and strong pricing in all channels
  • Headline earnings per share (HEPS) decrease contained to 33%
  • Compound average growth rates in revenue of 20.4% and 15.7% in operating profit over the past six years

Commenting on the results, Sea Harvest CEO Felix Ratheb said:

The financial year under review was one of the most challenging in Sea Harvest’s history. However, even with 10% volume losses following the Fishing Rights Allocation Process and a reduction in the TAC, load shedding and unprecedented cost inflation, the strength, resilience and diversification of our business resulted in increased revenue and limited the impact to the bottom line.

Whilst our core South African fishing business had an exceptionally tough year, we remain confident in the health and sustainability of the fish biomass. This continues to serve as a strong foundation for the Group. The performance of the Cape Harvest Foods segment was especially robust. The Aquaculture segment showed vast improvement, halving its losses, while the Australian segment doubled its EBIT on a normalised basis.

We have also managed to achieve the goals we set when we listed in 2017, with our focused strategy achieving compound average growth rates in revenue of 20.4% and 15.7% in operating profit over the past six years.

Looking forward, Ratheb added:

The long-term fundamentals for all our segments remain attractive, with firm demand for high- value proteins both locally and internationally. As an export orientated business, the Group will continue benefiting from currency weakness.

The completion of the first phase of the Fishing Rights Allocation Process and the sound management of our fishing stocks lay the foundation for long-term stability. We are particularly pleased with the performance of our value-added dairy business and our investment in additional production capacity in our butter and milk powder operations are starting to bear fruit. The relaxation of the stringent COVID-19 policies and the resumption of trade in the Far East in December 2022 bodes well for the future of our Aquaculture business. As the farms mature with bigger animals, it will allow greater flexibility in products and markets. The acquisition of MG Kailis is exciting, as it doubles the size of the Australian business in vertically integrated sustainable wild-caught high value seafood.

Finally, we are committed to continuing our cost containment initiatives and developing business continuity measures to address challenges related to energy and water security. Overall, we remain optimistic about our future and that Sea Harvest will continue to develop into a leading, responsible, internationally recognised, vertically integrated seafood and branded fast-moving consumer goods agri-business.

Results summary


Operational performance Challenges
South African Fishing

  • Operating profit down 48% (reduced available volumes from Fishing Rights Allocation Process and cut in TAC, load shedding and unprecedented input cost increases)

Sea Harvest Aquaculture

  • Operating loss reduced by 37%, which is a good performance from a young farm where the product mix still leans toward lower-margin live product sales
  • Increased abalone and oyster sales volumes and firmer pricing

Cape Harvest Food

  • Operating profit up 126%
  • Improved performance at Ladismith Cheese
  • Sound investments in additional powder, butter capacity

Sea Harvest International

  • Operating profit up 45% or 93% up if adjust for once-off acquisition costs
  • Strong contribution from the integration of the MG Kailis acquisition (included for seven months of the year)
  • Unprecedented input cost pressure, specifically fuel – up 90% at an additional cost of R257m
  • Severe impact of load shedding (R20 million in additional costs in the last 4 months of 2022)
  • Cut in TAC and FRAP outcome had material impact on volumes and the top-line as well as fixed cost recovery
    • Total Allowable Catch down 5%
    • Hake allocation down 5% despite Sea Harvest being:
      • One of top performing companies in all sectors applied for
      • One of the most transformed companies in sector
      • Result creates much-needed certainty and stability for next 15 a

Financial summary

  • Group revenue increased 27% to R5.9 billion (2021: R4.6 billion)
  • Cost of sales increased 42%
    • Driven by unprecedented cost inflation, including significantly higher fuel prices (which cost an additional R257 million), material input cost inflation, supply chain disruptions.
  • Gross profit for the year decreased 6% to R1.338 billion (2021: R1.424 billion), with the gross profit margin diluting to 23% (2021: 31%).
  • Selling and distribution expenses, marketing expenses and other operating expenses increased 15% to R1.118 billion (2021: R974 million), with good fixed cost control offset by significant increases in local and international freight rates, R25 million in additional costs as a result of load shedding, R36 million (2021: R16 million) in acquisition-related costs.
  • Material input cost inflation, supply chain disruptions and acquisition-related costs resulted in a 32% decline in operating profit to R472 million (2021: R691 million) for the year, with the operating profit margin at 8% (2021: 15%).
  • Headline earnings decreased 33% to R293 million (2021: R439 million)
  • Basic earnings per share* decreased 34% to 111 cents (2021: 167 cents) and basic headline earnings per share decreased 33% to 105 cents (2021: 157 cents).
  • Cash generated from operations was R659 million (2021: R822 million) after settling the Sea Harvest Employee Share Trust liability of R40 million and investing R67 million in working capital (2021: R156 million),
  • The net debt position at 31 December 2022 was R2.169 billion (2021: R1.178 billion), with the increase mainly due to funding acquisitions.

Please refer to the Group’s detailed announcement for additional information.


A 10% decrease in the available hake volumes driven by quota losses from the Fishing Rights Allocation Process and a decrease in the total allowable catch, material input cost inflation (including significantly higher fuel prices), and supply chain disruptions globally and domestically.

  • Despite the 10% lower available volumes, revenue increased 3% to R2.74 billion (2021: R2.66 billion), driven by firm demand and price increases in both local and international markets.
  • Cost of sales increased 24% as a result of significant input cost pressure, including a 93% increase in the fuel price.
  • Operating profit decreased 48% to R349 million (2021: R672 million), with the operating profit margin at 13% (2021: 25%).


Increased abalone and oyster sales volumes and firmer pricing

  • Revenue increased 29% to R118 million (2021: R92 million), despite continued lockdown restrictions in China and Hong Kong and the curtailment of international travel for most of 2022.

The improved performance of the abalone and oyster divisions reduced the operating loss by 37% to R40 million (2021: R64 million)



  • Strong organic growth at Ladismith
  • Significant input cost pressure and disruptions caused by load shedding


  • Revenue was up 59% to R2.1 billion (2021: R1.3 billion, up 59%), with Ladismith continuing to deliver firm top-line growth (growing the top line 28%) and the segment benefiting from higher value product mix and the full-year effects of the Mooivallei (effective 1 August 2021) and BM Foods (effective 1 September 2021) acquisitions
  • Operating profit increased 126% to R118 million (2021: R52 million), with the operating profit margin expanding to 6% (2021: 4%).
    *Includes Ladismith Cheese and Mooivallei, BM Foods and Sea Harvest’s factory shops



  • The group acquired the Western Australia-based fishing and related businesses of MG Kailis for a purchase consideration of AUD69 million (R770 million), with effect from 23 May 2022.
  • The segment was also affected by the significant increase in the fuel price (which was up 85%) and, after absorbing R34 million (2021: R10 million) in acquisition-related costs


  • Revenue increased 69% to R938 million (2021: R554 million), benefiting from firm pricing, good growth in the trading division and the inclusion of MG Kailis.
  • Operating profit was R45 million (2021: R31 million). Adjusting for the acquisition-related costs would have resulted in the Australian operations delivering operating profit of R79 million (2021: R41 million), up 93%, at an operating profit margin of 8% (2021: 7%).

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