Business Maverick


Brimstone and Sea Harvest’s interim results reflect ‘impact of global macroeconomic environment’

Brimstone and Sea Harvest’s interim results reflect ‘impact of global macroeconomic environment’
Brimstone’s chief executive, Mustaq Brey. (Photo: Gallo Images / Financial Mail / Hetty Zantman)

Brimstone’s six-month results to the end of June reveal 24% revenue growth to R2.86-billion, with a marginal 4% drop in operating profit to R279.3-million.

Brimstone’s management largely attributed the decrease in reported profit to a drop of R167.9-million in fair value gains on listed investments, and a decrease of R47.6-million in profits of associates and joint ventures.

“The impact of the global macroeconomic environment is evident in these results. We have seen the impact of higher fuel and energy prices, escalating raw material costs, global logistics and supply chain disruptions throughout the group,” says Brimstone’s chief executive, Mustaq Brey.

Sea Harvest nets 29% revenue increase

Brimstone’s subsidiary, JSE-listed Sea Harvest, also released six-month results to the end of June on Tuesday, with a 29% increase in revenue to R2.7-billion, reflecting growth across all its business segments. However, Sea Harvest’s earnings before interest and tax, as well as headline earnings a share, fell 10% to R286.9-million and 65 cents, respectively.  

“Sea Harvest had a challenging six months, mainly due to quota losses from the Fishing Rights Allocation Process, input cost pressure, higher fuel prices and global supply chain disruptions.”  

The group completed a hugely transformative transaction with the R765-million acquisition of MG Kailis in Australia in May. The purchase includes vessels, licences and fishing rights for prawns in the Exmouth region, and trawled fish in the Pilbara region in Western Australia. 

Sea Harvest’s Cape Harvest Foods segment, which includes Ladismith Cheese and Mooivallei, BM Foods and Sea Harvest’s factory shops, delivered revenue of R956-million, up a whopping 85% from 2021’s R516-million. 

In another boat, Brimstone holds 32.7 million shares in Oceana, with a market value of R1.5-billion at period end, equivalent to a 25.04% stake in Oceana. Brimstone recognised R38.4-million as its share of profits from Oceana and R98.9-million in dividends during the six months to June. 

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On the healthcare side, Brimstone owns 70% of Obsidian, a leading supplier of innovative healthcare solutions to both the private and public healthcare sectors within sub-Saharan Africa. Obsidian contributed R7.1-million, down from R12.5-million, to group profit during the period under review. 

Although elective surgery caseloads increased in the period, the contribution to revenue underperformed its budget, given the negative impact on inventory due to global supply chain disruptions.  

Aon Re Africa, a leading reinsurance broker, where Brimstone holds an 18% stake, contributed R21.2-million to profits and delivered a dividend of R12.7-million during the period.

Brimstone’s investment in Milpark Education, which specialises in higher education and training qualifications, gave rise to a dividend of R15.1-million, and Brimstone invested a further R20.4-million in Milpark.

“We are pleased with the results of the group, despite the many challenges our subsidiaries, associates and investee companies experienced during the period,” said executive chairman Fred Robertson.

“We are cautiously watching the global macroeconomic environment and the resultant impact of multiple factors such as higher energy prices, higher inflation and other indicators on our group businesses. 

“Our key investments operate at a global level, which in itself is a huge accolade for Brimstone, which has deep empowerment roots and a social impact objective.” BM/DM


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