Sea Harvest Group Limited (JSE:SHG) News - Reviewed preliminary financial results for the year ended 31 Dec 2021

Sea Harvest Group Limited
Incorporated in the Republic of South Africa
Reg no: 2008/001066/06
JSE share code: SHG
ISIN: ZAE000240198
"Sea Harvest" or "the Company" or "the Group"

SEA HARVEST GROUP LIMITED FINANCIAL RESULTS
for the year ended 31 December 2021

1. KEY PERFORMANCE INDICATORS
                                                                    CHANGE   YEAR ENDED   YEAR ENDED
                                                                            31 DECEMBER  31 DECEMBER
                                                                                   2021         2020
Revenue (R'000)                                                         5%    4 615 463    4 375 339
International revenue mix (%)                                                        42           46
Gross profit (R'000)                                                   -4%    1 423 855    1 480 761
Gross profit margin (%)                                                              31           34
Operating profit (R'000)                                               10%      691 230      629 260
Operating profit margin (%)                                                          15           14
Profit for the year (R'000)                                             9%      434 185      397 484
Profit after tax attributable to shareholders of Sea Harvest Group      9%      469 890      430 751
Weighted average number of shares ('000)                                        280 353      279 177
Basic earnings per share (EPS) (cents)                                  9%          168          154
Basic headline earnings per share (HEPS) (cents)                        4%          157          151
Ordinary dividend per share (cents)                                    24%           56           45
Net asset value (NAV) per share (cents)                                13%        1 110          987
ZAR: Euro average exchange rate*                                       -7%        17.40        18.81
ZAR: AUD average exchange rate*                                        -4%        11.05        11.54
Closing share price (cents)                                                       1 380        1 426
* Average spot exchange rate at which sales were recorded.

2. SHORT-FORM ANNOUNCEMENT

Despite the ongoing volatility caused by COVID-19, Sea Harvest proved its resilient and defensive nature in delivering revenue for the year ended 31
December 2021 of R4.6 billion (2020: R4.4 billion), 5% ahead of 2020 and operating profit of R691 million (2020: R629 million), 10% ahead of 2020, while
earnings per share increased 9% to 168 cents (2020: 154 cents).

The Group executed on its growth strategies in 2021, increasing capacity at Ladismith Cheese by commissioning a third powder plant and a new butter factory
as well as completing the acquisition of Mooivallei, thereby securing additional cheese capacity. The Group further completed the acquisition of 53.7% of
BM Foods, therewith diversifying the Group's South African food offering across multiple new categories including convenience foods and bakery.

Fishing: The South African Fishing operation performed well, contributing revenue of R2.664 billion, 3% behind 2020, driven by a 5% reduction in the TAC in
2021, a 7% strengthening in the rand to the euro, and supply chain disruptions.

Benefiting from improved fishing conditions, increased vessel availability, factory efficiencies, and R142 million of hedge gains, the South African
Fishing segment increased operating profit 18% to R672 million, with the operating profit margin expanding to 25%.

Sea Harvest Aquaculture: The curtailment of international air travel and resultant inflated freight costs from South Africa, together with continued
lockdown restrictions in the Far East, continue to impact the segment.

Despite the tough trading conditions, additional abalone product formats and strong live abalone sales growth resulted in revenue in the Aquaculture
segment increasing 72% to R92 million, with the segment reducing its operating loss to R64 million.

Cape Harvest Foods: The Cape Harvest Foods segment experienced significant organic and acquisitive growth in the year ended 31 December 2021 resulting in
revenue increasing 28% to R1.3 billion. Ladismith Cheese faced significant headwinds during the period, and although revenue increased by 5%, the business
was unable to fully pass on significant milk price increases, exacerbated by absorbing higher costs related to the increased installed capacity that could
not be fully utilised in time. As a result, operating profit in the Cape Harvest Foods segment decreased 45% to R52 million.

Sea Harvest International: The Australian operation continued the good performance of 2020 and contributed R554 million to Group revenue, up 2% despite a
5% strengthening of the rand to the AUD. The segment recorded operating profit of R31 million, 18% behind 2020. Operating profit adjusted for acquisition-
related costs in 2021 and COVID-19 relief benefits in 2020 was R41 million, up 71%, at an operating profit margin of 7%.

Despite the 5% reduction in the TAC in 2021, a stronger rand, above inflation commodity cost increases, and a R64 million operating loss in the Aquaculture
segment, the Group delivered operating profit of R691 million (2020: R629 million) for the year, 10% higher than the prior year, with the Group operating
profit margin expanding to 15%.

Profit after tax attributable to shareholders of Sea Harvest for the year ended 31 December 2021 increased 9% to R470 million (2020: R431 million), while
headline earnings increased 4% to R439 million (2020: R421 million). Basic HEPS increased 4% to 157 cents (2020: 151 cents).

On 11 January 2022, the Group announced that it had entered into a business purchase agreement to acquire the Western Australia-based fishing and related
businesses of MG Kailis for AUD70 million (R783 million), to be settled from a combination of cash on hand and available bank facilities.

MG Kailis is a well-established and market leading vertically integrated seafood business with over 50 years' experience in the seafood industry in
Australia, complementing the Group's existing Australian operations from a fishing, trading, engineering, and sales perspective. The acquisition is
expected to have a completion date of 2 April 2022.

The Group has declared a full and final cash dividend of 56 cents (2020: 45 cents) per share in respect of the year ended 31 December 2021.

A focused approach to administering COVID-19 vaccines to the Group's employees has progressed well with 91% of the Group's South African employees
vaccinated.

Driving transformation within the Group is central to Sea Harvest's existence and strategy. Accordingly, the Group invests significant resources in skills
development, employment equity, supplier and enterprise development initiatives, as well as projects focused on job creation, the youth, and rural
development.

The Board wishes to thank management and employees for their loyalty, dedication, care, and professionalism in contributing to the success of the Group.

This announcement has not been audited by the Group's external auditors. The Group's auditors, Ernst & Young, have reviewed the full announcement and
expressed an unmodified conclusion.

This short-form announcement is the responsibility of the directors of the Group. It contains only a summary of the information in the full announcement
and does not contain full or complete details. The Full Announcement can be found at: https://senspdf.jse.co.za/documents/2022/jse/isse/shge/SHGYE2021.pdf
Copies of the Full Announcement are also available for viewing on the Group's website at: www.seaharvestgroup.co.za or may be requested in person, at the
Group's registered office or the office of the sponsor, at no charge, during office hours.

Any investment decisions by investors and/or shareholders should be based on consideration of the Full Announcement, as a whole.

3. CASH DIVIDEND DECLARATION

Notice is hereby given of dividend number five. A gross and final ordinary cash dividend amounting to 56 cents per share in respect of the year ended 31
December 2021 was recommended on Monday, 28 February 2022, out of current earnings. Where applicable, the deduction of dividends withholding taxation at a
rate of 20% will result in a net ordinary dividend amounting to 44.8 cents per share.

The number of ordinary shares in issue at the date of this declaration is 298 866 214.

The Company's taxation reference number is 9223/794/16/6.

Relevant dates in respect of the ordinary dividend are as follows:

Last day to trade cum dividend                 Tuesday, 5 April 2022
Commence trading ex dividend                 Wednesday, 6 April 2022
Record date                                     Friday, 8 April 2022
Dividend payable                               Monday, 11 April 2022

Share certificates may not be rematerialised between Wednesday, 6 April 2022 and Friday, 8 April 2022, both dates inclusive.

By order of the Board

Date: 28 February 2022

Sponsor: Standard Bank



Date: 28-02-2022 08:00:00
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