No squid sees profits slump

Premier Fishing interim results for the six months ended 28 February 2022.

PREMIER’s reduction in revenue by R62m to R224m is due to the scarcity of the squid resource, usually one of the biggest contributors to the Group’s overall profitability. This is an industry-wide challenge, reliant as it is on seasonal changes to the environment.

Premier’s remaining divisions continued to steadily support operations, posting strong performances particularly in the lobster, deep sea hake and abalone divisions.  The abalone sector continues to perform well, with Far East markets rebounding post COVID-19 pandemic economic restraints, and an increased per kilogram selling price for these delicacies, as well as significant improvements in volumes sold.

Earnings before interest, taxation, depreciation, and amortization (EBITDA), however, decreased by 30% to R25 million from R40 million, along with a decrease in the profit before tax to R13m from R21m. This was mainly attributable to a decline in operating profit as a result of the increased pressures from a reduced squid sector.

Commenting on the Group’s performance for the first half of 2022, Chief Financial Officer, Brent Robertson remarked: “Even though the Group’s revenue has declined by factors outside of our control, we have managed to control our margins as some of our margins have improved; thereby placing less pressure on cash reserves.  This is testament to the cost saving initiatives that we have implemented over the past 6-18 months.”

Premier’s board elected not to pay a dividend in this period.

Outlook:

Robertson was also optimistic about the Group’s prospects saying, “The Group has lots to look forward to, having just completed its Fishing Rights Application Process (“FRAP”), and obtaining strong scorecard ratings from the submission of our applications and hence managed to retain our fishing rights for the next 15 years.”

The Group recently completed its FRAP and were granted its fishing rights for the following sectors:

  • South Coast Rock Lobster
  • Small Pelagic Anchovy
  • Small Pelagic Pilchards
  • Squid
  • Hake deep sea trawl
  • Hake long line.

Premier currently employs more than 800 people (permanent, seasonal, and contractual) on the coastal regions of South Africa.  Transformation and empowerment of the sector remains a deeply rooted commitment for the Group, driven by its own transformation credentials as a proudly black owned and managed operation.

For additional information and the full results, please visit Premier’s website at www.premierfishing.co.za.

 

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