Sea Harvest forecasts lower earnings due to Viking acquisition

Sea Harvest's new trawler. (Carin Smith)
Sea Harvest's new trawler. (Carin Smith)

Fishing company Sea Harvest [JSE: SHG] projects lower shareholder earnings as a result of the acquisition of Viking Fishing Holdings.

The group issued its trading statement on Friday, ahead of the release of its interim financial results for the six months ended June 30. The financial results will be released on August 28.

Headline earnings are expected to increase between 0% and 3% (this is between R110.7m and R114m) for the period. Last year’s headline earnings came to R110.7m. But this year earnings will be impacted by the transaction costs of the Viking acquisition, among other things, the group explained.

Basic earnings per share (EPS) could be between 46 cents and 50c, compared to earnings per share of 67c last year. This is a decrease of between 31% and 25%.

Basic headline earnings per share (HEPS) is expected to be between 45c and 49c, compared to 56.6c previously. This is a decrease of between 20% and 13%.

The Viking transaction was about R885m, Fin24 reported previously. It was financed through cash on hand, bank facilities, an issue of Sea Harvest shares and vendor funding.

The acquisition is part of Sea Harvest’s strategy to become one of the largest black-owned diversified global seafood and food companies, the group said in a shareholder notice issued in June. The acquisition would also help diversify Sea Harvest’s offering into other species and aquaculture.

Sea Harvest’s share price, which opened at R1.32 per share on Friday was trading 1.01% stronger at R1.50 by 09:25.

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