Sea Harvest reports significant earnings growth as hake catches improve

Sea Harvest Group benefited from improved catch rates, firm demand, better vessel utilisation, two new trawlers, price increases, and higher processed volumes and fish oil yields in the pelagic business in the six months to June 30.

The group, which derives 64% of revenue and 90% of earnings before interest, tax, depreciation, and amortisation (EBITDA) from its South African fishing business, increased headline earnings per share by 91% to 95 cents per share for the period.

“The last three years have been tough as catch rates were at the lower end of the cycle and fuel prices at their peak. This necessitated cost reduction and focus on maximising value for species in high demand globally. Once catch rates turned in 2025 and fuel prices normalised, the business saw a significantly improved performance,” said CEO Felix Ratheb on Monday.

The share price ratcheted up 2.84% on the JSE to R8.33 on Monday. Revenue increased by 34% to R4.4 billion, reflecting a mix of organic and acquisitive growth following the inclusion of Sea Harvest Pelagic and Aqunion.

There was 13% organic growth from volume gains and stronger hake pricing, and 21% acquisitive growth. Earnings before interest and tax (EBIT) increased by 58%.

The addition of two new freezer trawlers and improved vessel utilisation boosted landed hake volumes 15%. Since listing, the strategy to secure quota volumes, invest in assets, enhance margins, and grow through acquisition had built a substantial diversified seafood group, said Ratheb. The company exports to more than 30 countries, and 60% of fishing revenue is earned offshore.

Sea Harvest Fishing Group COO Konrad Geldenhuys said they were pleased to have leveraged the 5% increase in the hake total allowable catch and the strong demand for sustainable food to drive the group’s performance.

Ratheb said they would embark on a new strategic phase over the next three years.

“Our outlook for our South African fishing business remains positive, driven by a stable biomass, security of tenure, very strong demand fundamentals globally, and economies of scale delivering strong margins.”

He said they would remain focused on strong cash flows, disciplined investment, selective debt reduction, and selective disposals. Although a smaller part of the business, the abalone and Australian operations are undergoing restructuring to prepare for long-term recovery, as market conditions improve, he added.

The South Africa Fishing Group, which includes the core hake business and Sea Harvest Pelagic, increased revenue by 42% to R2.8bn, while earnings before interest and tax (EBIT) increased 74% to R568 million.

Hake catch volumes were up 15% on the back of a 5% increase in the total allowable catch (TAC) and improved vessel utilisation.

Sea Harvest Pelagic delivered revenue of R879m and EBIT of R144m. Record low anchovy and pilchard TACs created headwinds, but the business offset these through strong red-eye catches, high fish oil yields, and better cost management.

Aquaculture was under pressure due to weak demand and lower selling prices in Hong Kong and China. With the inclusion of Aqunion, revenue increased by 63% to R167m, while operating profit of R8m converted to an EBIT loss of R39m due to the lower fair value of biological assets.

At Cape Harvest Foods Group, which comprises 22% of group revenue and 10% of EBIT, higher milk flows, improved efficiencies, and a higher value product mix increased revenue by 24% to R975m, with EBIT up 73% to R61m.

Ladismith’s new sliced cheese line and roller dryer powder plant were fully commissioned and operating at capacity, while the solar investments were delivering good cost savings.

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