Sea Harvest Group Limited (SHG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. A very warm welcome to you to this presentation of the financial results of Sea Harvest for the year ended 31 December 2024. The Sea Harvest Group experienced its most challenging year. I must also then say that the general business environment hasn't helped at all. The general business environment in South Africa remains volatile. However, at Sea Harvest, we had a very sad occasion. And at this stage, we think of the families of those of our fishermen and seagoing staff who went down with the sinking of the Lepanto vessel that we have, and that happened last year. It was a very, very sad occasion to us all at Sea Harvest and our hearts continue to go out to the families of those who have passed. The Sea Harvest results was negatively impacted by the poor hake catch rates, which was at historical lows. The weak market conditions in Abalone and the continued soft global prawn pricing in markets as well as the high interest rates in South Africa. This, however, was offset by a strong demand of our hake product globally and improved pricing. Solid results also came through from our newly acquired Sea West Pelagic business at West Point. The firm results at Ladismith was also good for our results. However, the results -- the group results was not great. In fact, it was disappointing. Felix Ratheb and Mo Brey will go into those a little more in detail for you later. Management -- I must tell you, though, that management have taken active steps to improve the results in this year, and there is a sharp cutting of expenses and also a number of other actions will be taken. And hopefully, these will all work out positive for us. As you know, we are in the fishing business and you can't contract with the sea. However, demand for our product remains -- particularly hake and also now our pelagic remains strong, both locally and internationally. I therefore look out for a positive set of results when I next speak to you. But for now, I hand you over to Felix Ratheb.

Thank you, Chair. I'll be doing the CEO overview. I'll hand over to Mo afterwards to just take you through the numbers. We'll go in detail into segmental performance and then spend a bit more time in terms of an outlook and hopefully have some time with questions. I might just warn that today's presentation is slightly longer as we dig deeper into some of the issues and the headwinds that the business has faced over the last couple of years. As a start, though, what I tried to do here is look at the investment case since listing in 2017 and track performance against that particular investment case and, more importantly, basically look at whether it's still fit for purpose. If you'll recall, a lot of you that have invested from the beginning and backed us from the beginning, this was an industry where we had pricing power globally. We had more demand than supply, and hake was a product -- white table cloth product in demand. That has shown to be the investment case 8 years later, where we continue to see strong pricing. We are the market and brand leader right now, both in share, volume and value, but also brand equity. And more importantly, in terms of barriers to entry our world-class production facilities, other than investing significantly in our business in terms of vessels and factories over the last couple of years, the most important has been securing our volumes, which is our fishing rights for the next 15 years, which allows the business to plan and deal with everything that's coming its way in the next 15 years. The other point was that we are a rand hedge. We supply to over 30 countries around the world. No particular customer is more than 10% of our revenue, in fact, not more than 5%, which just shows the quality of customers and the fact that we are price setters in most of the markets that we operate. We've had a good track record of financial performance up to 2021, where HEPS was growing -- grew on average by 45% at a CAGR of 10%. However, it has come off in the last 3 years, and we'll go into that into a bit of detail. More importantly, the last point has been the most important, and that is when we listed, we were a small company on the West Coast. And the journey was to create a group. We acquired 11 companies in the last 8 years. So it's been quite busy here in terms of buying the businesses, integrating them. And most of them have worked, some have had challenges, and as I say, I'll get into that into more detail as the presentation goes on. But if we look at that, we've pretty much delivered on that previous investment case. If you remember, our strategy at listing was really twofold. One was to get volume and revenue growth, and the other one was to enhance the margins. On the volume side, as I've said, in my opinion, security of tenure in fishing is the single most important variable to secure. We've secured our fishing rights for 15 years. Secondly is the Marine Stewardship Council. When investing in fishing, sustainability is critical. That is the gold standard for sustainability. It allows us to gain market access predominantly in Europe, where the MSC is a prerequisite and a license to operate these days. And we've secured it until 2026 and it's been extended to 2031. So from a tenure and a sustainability perspective, we've secured our volumes. And we're seeing the benefits in terms of the biomass. We've seen nice growth in the TAC in hake. It's up 8% since listing and well above the maximum sustainable yield, which allows you, on the other side, having certainty to be able to get your pricing up, which we have done. As I've mentioned, we've achieved CPI plus 3% on a CAGR basis on all the currencies that we operate in. From a margin perspective, if you recall at listing, we had made a commitment that we'd be at 15% operating margin. We've averaged 12% over the period, not necessarily now in our hake business, but a lot of the other businesses that we have bought. And our HEPS did peak at ZAR 1.57 in 2021. Quite a lot of efficiency investments in our core business. We acquired 4 freezer trawlers, close to ZAR 0.5 billion over this period of time, predominantly because it's 95% export based. And we've also invested in our factories. So in terms of CapEx, we've made all the CapEx required in our business. And from an organic perspective, we are now fit for growth in terms of what we've invested in. Just to take a bit of time in terms of acquisitions because that's been the main story over the last 8 years. If you recall, at the time, we had very, very strong empowerment credentials, and our view was -- our core competency was hake. So if we could find another hake business upscale, it would transform and it would be a step change in our fishing business. We had identified Viking Fishing. It was the third largest hake company in South Africa. We managed to acquire them and catapulted us into the largest hake business actually globally. We process and sell more hake than anybody on the planet and in South Africa, too. That brought scale and diversification and really operating leverage in our business, enhancing margins and being able to withstand downturns in terms of the cycle of catch rates, which we've seen this year. You'll hear me say this a little bit later, but the last time we had this is in '04, '05, '06, and the company at that stage had actually entered into a loss-making situation. So the business is a lot more resilient than it was 20 years ago. The other part that was critical to us is species diversification. We are very much a hake business. One of the attributes that I always admired on Oceana has been the fact that they had species diversification, not as cyclical as a lot of the hake businesses. We managed to acquire Saldanha, which is West Point on the West Coast. It's the #2 brand in pelagics, in pilchards, and #2 in terms of fishmeal and fish oil exports globally. Finally, we've looked at aquaculture. You cannot be a seafood business and not look at farm fish. All the growth has been coming from agriculture in the last 20 years. In fact, wild resources have been stable even with all the sustainability credentials and investment, but aquaculture has grown. We looked at it carefully. We tried salmon, oysters, mussels, everything. Our view was that abalone is the business that is competitive globally from an aquaculture perspective. It's also China exposure, which we don't have in our portfolio. We're predominantly Europed-based. And it gave us that balance. With the merging of Viking Aquaculture and Aqunion, we've created the largest abalone business in the Southern Hemisphere, and we are about 40% of the South African volumes produced. So again, having scale and hopefully having operating leverage going forward, particularly in tough environments and, at the same time, more volume you have, you get a bit stronger in terms of pricing that you can achieve. In terms of taking that overseas, we were always looking at using our core competencies in fishing and looking offshore. We didn't choose Australia immediately. We looked at New Zealand. Unfortunately, we only could own 25% of fishing assets there. Canada was 29%, the U.S. 25%, Europe was impossible. South America was possible, but had a lot of risk. So Australia was the only one that met our criteria in terms of security of tenure. You had the rights in perpetuity and sustainability of resources. They did run resources very, very well scientifically and research, et cetera. The only problem was that Australia didn't have a Sea Harvest or an I&J or an Oceana. So you had to create it. So we've landed up having to buy 3 businesses and merging them. And today, having scale and diversification, as you'll see, and we are the third -- second to third largest fishing company, vertically integrated fishing company in Australia. That was the rationale behind that. And finally, food. It took us a long period of time to look at adjacent categories. Our view was that dairy had very similar characteristics with seafood, in other words, limited supply and demand growing, particularly as consumers were moving more into proteins. And that was the rationale in terms of moving into dairy and at the same time, looking at the best-in-class business there which, in our view, was Ladismith. It took us 5 years to make that investment and then obviously bulked it on with Mooivallei to create a decent-sized dairy business. If we look at it in terms of the journey, when we had this, we just had empty boxes. We've populated these boxes. As I've said, some have worked, some haven't. And it's now time to move on and look at what do we do going forward after this particular journey. We've seen some headwinds in the last 3 years, and these headwinds are really explained by 3 charts. The first one, and this, by the way, adds -- it contributes 70% to our underperformance, has been the -- our South African hake business. You'll see on the top slide, we've had a very, very good period of consistent catch rates averaging at around 9.5 tons per fishing day -- per sea day. And that dropped down by 25% in the last 3 years. That's correlated directly with our results. It's even been worse with the fuel price over that period that has almost doubled. It was at ZAR 6.50 and then we're trading now largely at ZAR 14. So those two particular variables had the impact of increasing our costs between 2021 to 2024 by 70%. I used 2021 because it was a record year for us. We made almost ZAR 700 million in EBIT in this particular business. I'd like to bring attention to the slide below. That gives you a 25-year history of catch rates in South Africa. You can see that we've had this before. It was in '04, '05, '06, as I've mentioned. Catch rates dropped to that level of 7.1%, 7.2%. So we are -- last year, we were at those historical lows. But you can see how quickly it can move up, and it did move up afterwards to a high of 14 tons per day. So we've had 3 years in the cycle. If you look between 2013 and 2021, it's unprecedented that we had almost 10 years of very, very consistent catch rates and very little cyclicality in our business because of that. But obviously, it has come off since then. So this was a big factor in our lives. The second one has been our prawn business. Very similar story. We are 28% below our 10-year average in terms of this particular resource. And that's because of heat waves. Heat waves affects two things. One is it destroys sea grass, in which case, is no food for the animals; and secondly, less rainfall. And that's what we've seen. The reason I mentioned the 10-year average is because we invested in these businesses. In fishing, you never look at 1 or 2 years, you look at the average, and that's the basis in terms of your investment decision. And you can see 2024 is way down 2021 and 2022 when we made these investment decisions. It's been further impacted by the Chinese economy. And that's really the fact that it took a little bit longer to open up on COVID, created huge inventories around the world on prawns, and that's impacted the Australian market, too. And we've seen a 23% reduction in our prawn pricing in the last 2 years. Abalone has a very similar story. If you recall, when we invested in our abalone businesses, the investment decision was based on 45% EBIT margins in these businesses, which were achieved historically. However, post-COVID, you can see what has transpired with prices. So pre-COVID to Q4 2024 prices have come off 35%. And it's in every category: 25% on live, 34% on canned and 55% on dry. The point below is probably the most important. The kilo price has come down by $12 a kilo. And 1,000 tonnes that we have in our merged businesses is ZAR 225 million impact to the bottom line. And if you take ZAR 225 million over the ZAR 500 million and so revenue, it's back to the 45% margin. So this is a story about only one variable being price, mainly out of Hong Kong and China, and really driven by consumer pressures in China and Hong Kong and resulting to less spending, particularly on products like abalone, which is quite an expensive product and usually consumed when they go out. You can see where it peaked at ZAR 1.57 in 2021 and down to ZAR 0.55 last year. And all I've done is I've shown you in 3 categories what we just discussed. So in the South African fishing business, earnings have halved. They're 51% down. We've posted ZAR 329 million. However, if you look at the impact from 2021, it's ZAR 360 million just on catch rates and fuel, effectively would have wiped out the profit had management not intervened early enough because we've seen this movie before and really raised prices and slashed costs. And that's really one of the reasons that in a very difficult time, we've still managed to post a 16% EBITDA margin in the business at a low point, which just shows the resilience of the business. In terms of our Australian business, just the lower volumes and the prawn pricing that I showed in the previous chart have hit us by ZAR 110 million. And again, that's what the expectations were that those businesses would make, about ZAR 100 million in EBIT. And finally, on the Viking side, I haven't included Aqunion here, I've just included Viking. And just year-on-year, we've had a ZAR 64 million turnaround just on price. You'll recall many times I have communicated on the road shows that, by now, we would be at breakeven on these business. You can see that 2024, if we just had the pricing of the previous year, we would have actually been ZAR 40 million in the black. But unfortunately, it is what it is in terms of the markets. So the total impact has been ZAR 534 million over the period on that, which equated to -- rand per share was ZAR 1.24. So if you add it to the ZAR 0.55, all things being equal, if we didn't have these 3 variables, we would have been on the upward trajectory hitting ZAR 1.80 per share. Based on that, we've had to relook at our strategy going into 2027. This is our 3-year strategy. I think 5 years is too long when you're in this environment. And firstly is to optimize our cash cows. Cash cows is our South African fishing businesses, which is our hake and pelagic businesses. On the hake side, it's really modernizing and investing in the fleet. We bought another 2 new vessels basically December, January this year to catch our quota and, at the same time, increase quality and exports. And on the pelagic side, again, we've invested in terms of modernizing our fleet. We're going to build 2 new vessels and increasing our factory throughput by 30%. That on its own will make a step change in the businesses. We're expecting that through the cycles, these businesses should be making around ZAR 700 million in EBIT. But again, it's dependent on catch recovery, which can be soon. But more importantly, we are streamlining the businesses to make sure that when catches do recover, and they do, we will be able to take advantage of them. The second one is to address the capital structure. So we would -- as a management team, we've set our goal to reduce debt by 50% over the next 3 years. That will be a blend of selling some noncore assets, but also maximizing free cash flow. We've spent quite a lot in our businesses in terms of CapEx in the last 8 years. Our CapEx hump is completed. The business is now all at scale. And focusing on managing CapEx, optimizing working capital, and Mo will get to managing dividends in his part of the presentation. And finally, we've got businesses in our portfolio that are positioned for growth, but it requires an upturn in the Chinese economy. The first one is abalone. So what we can do in the interim is get this business and reposition it and get it fit for growth by reducing costs, mothballing any underperforming farms and, more importantly, really merging and expediting the Viking Aquaculture business into Aqunion. Aqunion, all its metrics are considerably higher than Viking Aquaculture, and that on its own is a step change in the business. In terms of Australia, again, it's taking out costs and trying to make money at the reduced level of catch and again, similar to hake, allowing the business or getting the business ready so that when you have a recovery in catch, you can optimize it. And again, there, we're looking at those businesses contributing ZAR 100 million each in the next 3 years provided, of course, you have a recovery in the Chinese economy, which an economist can give a better view. As per listing, our target internally as management is to have an EBIT margin of 15%; our return on investment capital hurdles were above WACC, but unfortunately, we've had certain exogenous events that have affected us, improve the dividend and get to a HEPS of about ZAR 1.50 -- over ZAR 1.50 in 3 years' time. That's our target as management over the period. And we will touch on to it later in the presentation in terms of how we believe that, that is possible. I'll now hand over to Mo, and he'll take you through the group financial results.

Thank you, Felix. Turning to the group financial results for the year ended December 31, 2024. I'll start off with an overview of the key metrics of the group. Group revenue for the year December 31, 2024, has increased by 16% to ZAR 7.2 billion, largely as a result of the acquisitions, where the higher-margin acquisitions also contributed to the accretion in the gross profit margin to 26% and the operating profit margin to 8%. Overall, the group delivered operating profit of ZAR 580 million, 26% ahead of the prior year. The lower volumes in the hake business and the difficult markets in prawn and abalone were offset by strong price increases in the hake business and solid performances out of Ladismith and pelagics. This resulted in normalized headline earnings per share decreasing by 1% to ZAR 0.65 per share. That's if one strips out the ZAR 93 million of gains attributed in the prior year. And in line with our dividend cover, the group declared a dividend of ZAR 0.22 per share for the year. From a segmental performance. The South African Fishing segment, which includes the hake and the pelagic business, continues to be the bedrock of the business and contributes 58% to group revenue and 82% to group operating profit. The bottom of the cycle, the segment continued to deliver operating profit of 12%. Pleasingly, Sea Harvest Aquaculture turned to profit and delivered ZAR 11 million in operating profit for the year, this before any fair value gains. The Cape Harvest Food Group segment also had a good year, increasing operating profit by 12% to ZAR 92 million with the operating profit margin also increasing by 1 percentage point to 5%. Of course, this was offset by a difficult year down under. As Felix pointed out in his opening remarks, performance has been challenging over the last 3 years with the group operating profit margin dropping down to a low of 7% and, this year, ticking back up to 8%. However, H2 2024 was particularly difficult within our hake business with hake catch rates some 30% down from H2 2020. The group has also seen a shift in semester profit where traditionally, H2 has been stronger. Over the last 2 years, we've seen that profit has been more balanced between H1 and H2. Turning now to the group P&L for the year to December 31, 2024. Group revenue increased by 16% to ZAR 7.2 billion, largely as a result of the inclusion of Aqunion and Sea Harvest Pelagics. On a like-for-like basis, excluding acquisitions and investments, revenue increased by 0.4% with the lower overall volumes in the legacy fishing businesses offset by strong price increases. Gross profit increased by 25% to ZAR 1.9 billion with the gross profit margin improving to 26%, benefiting from the high-margin pelagics and Aqunion businesses, offset by the deleveraging effects of the lower volumes. Other income of ZAR 121 million includes ZAR 40 million of insurance proceeds and ZAR 28 million in foreign exchange and fuel hedge losses. Net operating expenses, including marketing, selling and distribution and other operating expenses increased by 20%, mainly as a result of the acquisitions. However, good cost control during the year was offset by above-inflation increases in insurance and utilities. Operating profit increased by 26% to ZAR 580 million with the operating profit margin at 8%. Included in the fair value line is a net ZAR 3.6 million gain on the revaluation of biological assets, largely flat, a ZAR 28 million gain on bargain purchase arising from the acquisition of Sea Harvest Pelagics, offset by an ZAR 11 million charge against a contingent consideration. The prior year, of course, included the ZAR 93 million gain on purchased loans. In its most difficult year since listing, group EBIT increased by 6% to ZAR 609 million with the EBIT margin at 8%. Net finance costs increased by 24% to ZAR 276 million due to the higher average borrowing levels, including the acquisition debt taken on during the year. Driven by the increased interest charge and the higher effective tax rate, the result of the nondeductibility of certain assessed losses within the aquaculture segment, profit after tax decreased by 15% to ZAR 230 million and, after accounting for minorities in aquaculture, profit attributable to Sea Harvest shareholders decreased by 20% to ZAR 227 million. The group delivered EBITDA just south of ZAR 1 billion, ZAR 956 million for the year, 9% ahead of the prior year at a 13% EBITDA margin. Adjusting the profit attributable to Sea Harvest shareholders of ZAR 227 million by the insurance income and the gain on bargain purchase, results in headline earnings of ZAR 174 million for the 2024 year. And after accounting for the increased number of shares arising from the equity issue to Terrasan, reported headline earnings per share decreased by 45% to ZAR 0.55 per share. The dividend of ZAR 0.22 totals ZAR 77 million in money. From a normalization of EBIT and HEPS perspective, adjusting for the one-offs in the prior year, which was the ZAR 93 million gain on purchase loans and the one-offs in the current year being the gain in bargain purchase, the contingent consideration and the deal costs results in our normalized EBIT increasing by 27% from ZAR 484 million to ZAR 615 million. The group normalized EBIT is at 9%. This is very much at the bottom of the cycle. On the same basis, normalized HEPS decreased by 1% from ZAR 0.66 per share to ZAR 0.65 per share. From a net working capital perspective, turning now to the balance sheet. The group did well to release ZAR 76 million from working capital over the course of 2024 despite elevated levels of inventory in both Australia and Ladismith and ZAR 82 million in delayed diesel rebates from SARS. This resulted in the net working capital percentage of revenue improving from 20% in 2023 to 19% in the current year. From a CapEx perspective, the 2024 year saw elevated CapEx as the group spend significant resources in maintaining its asset base. This included significant spend on vessel refits and maintenance during the year, which contributed ZAR 282 million or 75% of the ZAR 373 million spent on maintenance CapEx during 2024. In total, maintenance CapEx during 2024 was 5% of revenue. Expansion CapEx in 2024 of ZAR 208 million included circa ZAR 70 million on the Santo Domar, the new freeze trawler, ZAR 41 million on the acquisition and conversion of further freezer trawlers and ZAR 58 million on the various projects at Ladismith and Mooivallei. Depreciation on PPE was just on ZAR 300 million or 4.1% of revenue. The 2025 budget sees maintenance CapEx more normalized and circa ZAR 100 million lower at ZAR 277 million. A further ZAR 195 million is earmarked on expansion CapEx, including the Harvest Camissa, which is the fourth trawler, which is scheduled to join the fleet in the second half of 2025. From a replacement CapEx perspective, the South African fishing and Australian fishing businesses have tracked at circa 5% to 6% of revenue, certainly elevated over the last 2 years, whereas Ladismith and aquaculture track at a much later level from a maintenance CapEx perspective. The 2025 budget will again be dominated by the fishing businesses largely through capacity and efficiency projects, however, at a lower run rate, circa 4% of revenue, as a result of the elevated CapEx over the last 2 years. Turning now to the Sea Harvest Group cash flow waterfall for the year to December 31, 2024. The group opened 2024 with ZAR 225 million in cash, generated ZAR 1.08 billion in cash and released ZAR 76 million from working capital. The group utilized ZAR 383 million in servicing interest and settling tax during the year, and a further ZAR 142 million was expended on the growth of biological assets. Business as usual CapEx, we've touched on earlier, was ZAR 373 million. And the group drew down ZAR 358 million to fund its investments during the year. This included a net ZAR 247 million on the acquisitions of the pelagics and Aqunion businesses and ZAR 195 million on project CapEx. We utilized ZAR 124 million in settling the 2024 dividend and repurchased ZAR 22 million of shares during the year, closing the year with ZAR 290 million of cash. Sea Harvest Group held ZAR 2.66 billion in net external debt at the end of the period with the ZAR 334 million increase largely as a result of the acquisition during the period. The group net debt-to-EBITDA ratio has improved from 2.6x to 2.5x at the end of 2024. South African net debt has increased by ZAR 270 million from ZAR 1.63 billion to ZAR 1.9 billion, again as a result of the acquisition, with the SA net debt-to-EBITDA ratio now dropping below 2x, decreasing from 2.06x in the prior year to 1.92x at the end of 2024. Annualizing for the effects of the acquisition, ROCE was maintained at 10% and remained diluted as a result of the challenging performance during the last 3 years. The group's cash flow conversion ratio has improved from 55% to 58%, this despite elevated levels of maintenance CapEx during the year and elevated stock levels at aquaculture and Australia. From a group capital allocation perspective and in line with what Felix has pointed out from the revised strategy, the group seeks to consolidate the acquisitions that we've made over the last few years and generate the targeted returns that we've seek out of these businesses. Organically, the group will pursue efficiency projects and organic growth opportunities that deliver the targeted returns, driving long-term shareholder growth. Of course, a big focus will be on the capital structure with a target set to reduce debt by 50% through noncore asset disposals, maximizing free cash flow and implementing the determined cost reductions across the business. With this in mind, dividends will be balanced with the debt reduction. The group will continue investing in its business, renewing the fleet, driving factory efficiencies, recruiting and retaining increasingly scarce skills and diversifying markets. Optimal working capital levels to support the business against added focus, particularly with 3 seasonal businesses now in the group being Ladismith, Australia and now pelagics. Turning to the segmental performance of the underlying segments for the year ended December 31, 2024. Touching on some of the highlights in aquaculture, Sea Harvest Aquaculture acquired Aqunion in May 2023, the premier abalone operator across farming, processing, marketing and sales. Importantly, the acquisition includes control of the abalone feed-producing business Marifeed, giving the segment security of feed supply. The integration is progressing well with the teams and structures bedded down and the cross-pollination of processes and people well underway. Putting the Viking Aquaculture and Aqunion businesses achieved by now, we can see just how much better the Aqunion business is and it will only be a matter of time before the Viking Aquaculture animals benefit from Aqunion's quality processes. From a demand perspective, weak Chinese and Hong Kong economies have impacted demand for abalone and resulted in weaker pricing. This has been compounded by increased supply from both South African and Chinese competition that has further impacted pricing. South African producers have had to follow with the result average pricing in Sea Harvest Aquaculture has declined by 35% from pre-COVID-19 levels across all of live, dry and canned categories. From a performance perspective, revenue for the year increased to ZAR 324 million, largely benefiting from the Aqunion acquisition. However, if one compares the full year 2024 to 2023, including all of Viking Aquaculture and Aqunion, revenue on a like-for-like basis is down 17% with a large part of this decrease coming from price. Again, benefiting from the Aqunion acquisition, gross profit increased to ZAR 148 million with the gross profit margin improving to 46%. And with biological assets offset by softer pricing and a flat rand, the segment recorded ZAR 3.6 million in net fair value gains. This resulted in segment operating profit after fair value gains of ZAR 15 million from a loss of ZAR 9 million in the prior year at an operating profit margin of 5%. Segment EBITDA margin has ticked up from 11% to 15%. Aqunion, despite all the challenges in the market, delivered ZAR 50 million in EBIT for the full year at an EBIT margin of 15%. The period saw slightly softer growth rates as a result of environmental factors, including abnormally warm water temperatures with total biological assets increasing by 4% to 1,238 tonnes with a value now north of ZAR 0.5 billion. The Cape Harvest Food Group segment includes Ladismith, Mooivallei, BM Foods and the Sea Harvest factory shops. Touching on some of the challenges and highlights facing this segment during the Eastern Cape, a region that produces circa 30% of the country's milk, fortunately, the benefit of having multiple locations located in Ladismith and Bonnievale mitigated any significant impact to the Ladismith cheese business and allowed us to continue to export. However, other affected producers were not as fortunate. And as a result of being unable to export, resulted in significant volumes of product finding its way into the local market. International powder price have remained soft over the course of the year, driving lower skim milk and whey powder pricing during 2024. The tough consumer environment is still evident in South Africa. From a highlights perspective, some respite have been received in pleasingly good milk flow in the business, and management did well to take advantage of this increased volumes to drive volume efficiencies and good cost control. The new roller dryer plant, for those who enjoy those neuhaus chocolates, this is the only one in South Africa, went live in late quarter 4 2024 as well as our sliced cheese line, which came online at the back end of 2024. Within BM Foods, a number of businesses have profitably been disposed of, while a number of our underperforming factory shops have also been shuttered. Segment revenue has decreased by 9%, driven by the deconsolidation of BM Foods from July 2023. On a like-for-like basis, revenue has increased by 4% with the benefit of increased milk flow and the resulted increase in powder and butter volumes, offset by soft international powder pricing. With lower milk price inflation, good cost control and the deconsolidation of BM Foods, operating profit has increased by 12% to ZAR 92 million with the operating profit margin increasing by 1 percentage point, a sound result in an oversupplied local market. The segment has seen good growth in milk volumes and the butter and cheese price over the last few years, offset by flat powder pricing and a significant increase in the milk price, particularly between 2022 and 2023. On the back of a constrained SA consumer and a very competitive local market, retail revenue was flat at ZAR 459 million, while foodservice revenue and B2B revenue increased by 4% over the course of the year. Wholesale revenue, which contribute -- which consists largely of out of sales out of our depots increased by 28% to ZAR 118 million and now contribute 7% to segment revenue. As can be seen, the business is relatively well balanced between retail, foodservice and B2B. I'll now hand back over to Felix to take us through the fishing segments and then wrap up with an outlook of 2025 before we take questions. Thank you.

Thank you, Mo. This slide, I think, look at more of the margins. It's a consolidated slide of both the Saldanha and the Sea Harvest business, which is our South African fishing business. You'll see that revenue has hit over ZAR 4 billion in this business. Importantly, we're looking at an operating margin of 12% and EBITDA margin of 18%. I will break these businesses down individually later on in the presentation, but this just gives a snapshot of what the fishing business in South Africa looks like. From a revenue perspective, 76% of the revenue of our fishing business in South Africa comes from hake and 24% from pelagic, but it's the opposite on profit, so 62% of the profit comes from hake and 38% from pelagic. But I must just caution that might be completely different in a year's time as these particular two species are a little bit countercyclical. If we look at the total business, 54% of our business is -- in our fishing business is exported. It's certainly a rand hedge. In terms of where that is sold to, 80% is in Europe and, of course, Europe makes up close to 15 countries in there. So it's quite diverse. 11% in Australia, and that 9% is mainly Asia. From a channel perspective, also very nicely split, 51% in foodservice or out-of-home consumption: restaurants, hotels, catering institutions; 30% in retail, which is our branded business and Woolworths business; the 8% business-to-business is from our pelagic business, which is feed and oil, fishmeal and oil; and 11% sold out of our depots. So a nicely diversified business in terms of geography, channel and customer. In terms of the highlights, we celebrated 60 years last year in existence, a big milestone for the business. We've also seen the biomass increase by 5% in terms of TAC. What the scientists are telling us is that the biomass is very healthy, that's why we've seen an increase in '24 and '25. It's more a catchability issue right now, and we are expecting the resource to recover. It is showing a strong resource. From a demand perspective, very strong demand in all markets and channels both local and internationally, driven by a few factors. The last couple of years have been the geopolitical events with Russia and sanctions on Russia into Europe. However, what we've seen lately is that it's been compounded with a 30% reduction of the cod, "Atlantic cod," which is our main competitor in those markets. And that has led to improved pricing of 9%. So first time we're probably sitting at CPI plus 5% in terms of pricing and the currencies that we operate or transact with. At the same time, as Mo has mentioned, last year, we secured 2 trawlers, the Harvest Cap Nord and the Isabella. And this year, we've secured the Santo Domar from Spain and the Harbis Camisa also from Spain, which will be joining our fleet in March and June this year. If we look at our core hake business, despite revenue, which was lower, and you can see it cost us ZAR 70 million, revenue was actually up by 7%. The team managed to claw back over ZAR 300 million in price and mix over the year, very little on ForEx year-on-year, which did see GP go up by 3%. Unfortunately, operating profit was down 13%. And really, it's the lower catches and lower volumes that had impacted the cost base of the business. But even at a low that we haven't seen these levels of catch rates in the last 15, 20 years, EBITDA margin was at 16%. What I've tried to do at the bottom there is that to also show the effect of the reduced catch rates. Because other than the increasing costs, we landed up having to leave a lot of quota in the water last year. And if we value that particular opportunity at the level of cost of catching, in other words, we didn't assume increased catch rates, we've had the opportunity to have added another ZAR 121 million to this number. So if we just caught our fish, even at the current environment of elevated fuel rates and low catch rates, we would have been 20% up on last year posting ZAR 450 million. So that is something that we need to address going forward, hence the addition of capacity into our business. I've shown this chart before in terms of the history and the consistency, and you can see the drop in the last 3 years. But I'd just like to focus on January there, which we've seen a complete rebound. February was the same. You can never predict fishing. And as the Chairman said, you can never contract with the sea, but the signs are positive that things are starting to change. What I've also tried to do here is to have a bridge between 2021, which was ZAR 677 million, and where we posted ZAR 329 million in 2024. You can see that in terms of what we've clawed back in the market in terms of sales and exchange rates was over ZAR 430 million, and inflation was ZAR 394 million. So actually, if the same trajectory had continued, we would have grown EBIT in this business. But if you add the lower catch rates, so taking ZAR 200 million -- ZAR 218 million, another ZAR 204 million, that has been the main impact that we've struggled in our businesses, those two that we have to mitigate. Sure, the fuel price is in the base now and not to that level, but it is in the base. But equally speaking, there's quite a lot of opportunity with fish that we need to catch this year in terms of what was left in the water last year. On the pelagic side, we acquired the Saldanha, West Point business around May last year. That business actually celebrated 120 years in existence last year, which is phenomenal. It survived two world wars, apartheid and everything that came with it. So a very resilient business, very good performance in '23 and '24. It was, however, driven by elevated prices in 2023 on fishmeal and oil. 2024 fishmeal prices did come off. However, oil prices were still elevated. So it's been a good one for pelagic. We also saw a 60% increase in the pilchard TAC last year. That's a huge benefit because you don't have to import as much and the margins are more. But mostly, the business benefited from volume efficiencies. It's increasing throughput through the facility and being able to process it in a very short period of time. We have now compared it -- these are like-for-like numbers. Although we didn't own the business in 2023, we were actually in a lock box during that period, so we do have all the data. So it's not data that's in our statutory accounts but it's relevant here. And we can see revenue was up, GP was up and operating profit was up. EBITDA margins hitting 20%, operating profit margin of 19%, pelagics are not as CapEx hungry as the big hake ships. But you can see in terms of revenue, most of it is coming from volume. There was no increase year-on-year on price between the two. And you'll see it on this slide, where fishmeal prices were 18% down, fish oil prices were 3% down, but volume was up -- or revenue was up. And it was driven by volume. Might just caution again. The fish oil price was over $5,000 a tonne in 2024, and that's almost double of where it was previously. So going into 2025, we are seeing a reduction of fish oil prices significantly. If we look at the export mix, local, again, 50-50, very similar to our hake business. And quite similar fundamentals too other than the pricing side, which is obviously driven by more what's happening out of Peru and other markets where hake is pretty much a white table cloth offering. In terms of our Australian business, there have been some positives. We have seen that the specie -- we've seen more tigers than what we have. It's a better prawn and you get better pricing, and the sizes were bigger in the year. So all the efforts in terms of reducing, effort we have, the efforts in the bay to allow the resource to recover, we are seeing it. We had an increased crab and scallop quota last year. We've seen good catches in mackerel and fish. At the same time, moving from Carnarvon, we closed down our operations and moved to Fremantle. We've seen no fishing time lost because of engineering issues. And at the same time, engineering has actually had a very good year offering services to the broader Perth market. Challenges, however, as I've said, our prawn catch is 28% below the 10-year average. And that on its own is the main reason why these businesses have not achieved what -- the investment case that we've had. It's basically been a volume and a resource issue. We've also had high prawn inventories that was carried through into 2024, which we've seen the softer prawn pricing. We had another heat wave that came through this year in Western Australia. Fortunately, it has subsided and the water temperatures have dropped because we were concerned about that. So you can see the prawn resources are highly correlated to environmental factors. Revenue was down, GP was down and EBITDA was down with the EBITDA margin at 6%. But you can see that it's quite a diversified product offering. CapEx still makes up 1/4 of our revenue. And that's a product that we catch and we sell in Australia, mainly into fish and chips outlets. But you can see prawn, 23%; our scallop and crab, 11%; engineering contributed quite nicely last year at 12%, but a very nicely diversified business predominantly in foodservice, which shows that there is an opportunity still in exports and retail. But as I say, this business has struggled based on the fact that we've had less volume and challenges in the market, particularly because of China. What I've tried to do here is also show the EBITDA in 2024 and what the potential would have been if we had '22 volumes and prices, which were the only year where we had it normalized since we've owned the business. And you can see, the effect on the prawn volumes would have added another $4.3 million. The prices would have added $4.5 million, and we would have been at $13.5 million in terms of EBITDA, which is the through-the-cycle expectations we have from these businesses in terms of earnings. Looking to 2025. On the South African Fishing Group, our main aim right now is to catch the allocated quota we have. It's a significant increase. We left quite a bit in the water last year and we've had an increase this year. So we need to integrate the new vessels that we've acquired. Hopefully, with an uptick in catch rates, we were able to land our quota. That would be a step change in our business. The markets are firm. As I've said, cod is 30% down. A lot of the contracts that we've locked in have been at very good prices. So provided we can catch the fish, we should have a very good year in fishing. On the opposite, I think pelagics will struggle this year compared to last year. It made ZAR 264 million. Those numbers are not going to be achieved again. They were at the top end of the cycle. We didn't value the business at that level. However, we do believe that we might have a benefit on volume again. The TACs of both anchovy and pilchard have been at the bottom, and we are seeing catches improving both in January and February. On the international side, we are seeing the easing of global prices. I don't know if you noticed in the slides previously. I had, had a few snippets from Rabobank and what they've said in terms of prawn pricing easing. And it's going to be slower, but at least the overhang and the huge inventory was in the market is not in that level as it was. We are seeing the scallop quota increase again this year. That's a big positive. It's a high-value product coming out of the bay, which allows us to increase exports. And in this business, too, we are looking at -- there are certain assets that are underperforming. And judging by the level of debt in that particular market, we are looking at disposing of some of the assets in that portfolio. On the aquaculture side, the biggest step change is for us to fast track the Viking Aquaculture integration with Aqunion. As most, you could see the one business made a ZAR 50 million profit and the other one made a ZAR 38 million loss. So just bridging those two is a big step change in our business. It does take time. It's not going to be overnight. It's a process in terms of getting the health of the animals to the level of Aqunion and the growth rates, but we're well underway. And at the same time, we have to look at potentially mothballing operations that are underperforming there, too. And finally, on the Ladismith, as Mo mentioned, we invested quite a lot in increasing capacity in various areas. What does that mean? To optimize that capacity, you need more raw material, the raw material being milk. So we need to source that milk. And at the same time, that has the effect of increasing efficiencies, lowering costs in the facility, no matter what happens in the market. Most importantly, though, is that we've determined cost reduction efforts, what we need to do, and all the team know exactly or what we need to do in terms of taking cost out of the business. In conclusion, what would be our revised investment case or new investment case. I've done it per business, and I've taken all the fishing first and then the aquaculture and non-seafood after that. On the hake side, we could be at the bottom of the cycle in terms of hake catch rates. And an increase in catch rates will result in a step change in the business, especially when the markets are as strong as they are and the exchange rate is in our favor. So we're quite positive on the hake side of the business. The pelagic side, as I've mentioned, the resource is rebounding. It's at a long-term low in terms of both the sardine and anchovy resource. And it has the effect that if you import less from Morocco and produce your product in terms of pilchards from locally caught fish, you go from a 5% operating margin to a 20% operating margin. So there's a big margin pickup if that plays out. And at the same time, if we take a long-term view, although I've said that prices have come out -- come down on fishmeal and oil, if you take a long-term view, aquaculture continues to grow. There's not enough food to feed the planet. Based on that, you will see more salmon, more sea bream, sea bass, tilapias, pangasius being produced. That will require a feed. A big element of the feed is fishmeal. So long-term pricing in feed ingredients or inputs should continue to increase. On the prawn side, we've taken all the pain now in terms of effort limitations, halved our fleet. We are seeing an uptick in terms of the crab and scallop. It's only a matter of time when the prawn starts to recover. And hopefully, it times with the oversupply we are seeing in the markets and eventually seeing that the business can perform to the levels that we acquired it. On the abalone side, this is probably the area that could have a big step change but it is probably the most high-risk area. And that -- I took a snapshot from Rabobank, again, who are probably the best in terms of predicting what's happening in seafood. And some of the snippets in terms of China is poised to drive 40% of the global growth in seafood consumption to 2030. It's an increase of 5.5 million tonnes. Just to give you an indication, the entire groundfish industry is 7 million tonnes. So only China's growth will be more than the entire ground fish -- or close to the entire groundfish industry. Its population is 1.4 billion consumers, 100 million of those consumers are urbanizing per year. And they have a high affinity for seafood. And in fact, if you read the report, and I'm happy to share it, you're seeing a reduction in pork consumption and an increase in high-value seafood. So that point in terms of consumption is not going to only be volume driven, which it was in seafood previously, mainly carps, but more value driven. The outlook is that China will surpass the U.S. as a $30 billion seafood input market by 2030. So if you had a product, abalone is something that the Chinese consumer loves. There's a lot of competition and there's a lot of challenges right now in terms of the consumer not spending and demand being down. But if one takes the view that China will be the seafood market on the future, we have the right product. It's a matter of a little bit of luck in terms of how quickly it turns. And finally, dairy. Although it is not 100% correlated to our other businesses, as I've said, we took a long time looking at this category. It's the fastest-growing protein category and it has been for the last 5 years. People are moving away from margarines, moving away from carbs, eating more protein. We are seeing businesses in Europe that are in the dairy space performing incredibly well. Again, same fundamental, supply is constrained, demand is there. So we want to take a long-term view on dairy. Again, it's an industry with good fundamentals. And now I'll take questions. That's it from our side.

The first question is from Merge Market. What financial and strategic metrics will be used to determine candidates for disposal? And will Sea Harvest prioritize reduction of SA or offshore debt?

I'll take it, yes. So strategically, of course, we will look at assets which are sort of noncore to the portfolio and which shareholders have potentially also advised us over the period of time. We'll look at those. There are a number of latent assets sitting within the business, our property which we've inherited along the way from certain acquisitions. So that, we will look to dispose of. There are certain businesses as, for example, BM Foods, we've profitably already disposed of some of them. So those will be the first to be looked at from a strategic perspective. In terms of debt reduction, there are also some underperforming -- as Felix pointed out, some underperforming businesses in Australia that will be looked at. So it depends on where we sell. If we sell in Australia, we look to de-gear it. And if we sell in South Africa, of course, look to get de-gear the South African balance sheet in terms of getting the capital structure right.

There are two questions that relate to that from all way to Peter from Prescient Securities asks, what noncore assets are you planning on selling? And Matthew from BQCM asks, what are the noncore disposals to materially reduce debt in the coming periods? Not sure if there's anything you want to add to your previous answer.

Yes. Felix?

I think in terms of which of the noncore assets, we will evaluate everything that we believe is not performing or doesn't have the chance to perform in future will be evaluated. So that's the one thing. And we do -- we've got our own metrics and our own hurdles in terms of what that is. Sorry, Konrad, what was the second one?

It was, what are the noncore disposals that will materially reduce debt in the coming periods?

I think I've touched on that.

Okay. Then from Risk Insights, Mr. Mulato. Risk Insights has rated Sea Harvest on ESG for a number of years and the inclusion of country-specific emissions data in your F '23 integrated report is commendable. Do you plan on applying this country-specific reporting to your other E metrics such as waste water and energy consumption for your F '24 and onwards?

Yes. Thanks for that. I mean ESG is crucial in our environment, and the answer to that is yes on all 3 of those metrics, we will be adding it.

Two questions from Rosenthal Partners. Has the acquisition really been a success as ROIC has halved since listing, net debt to EBITDA has doubled, share count doubled and the Sea Harvest share is down by more than 50%. When do you an expect impairment of these underperforming acquisitions and what are debt covenants? I'll ask the second question as well.

No, no. Let's just -- yes, one at a time. I think that, one, I don't think we've got any issues with our debt covenants. As Mo pointed out, we were less than 2x debt to EBITDA, and that was at the low point in terms of EBITDA. So the numerator has been the problem there. So I don't think we've got those concerns. In terms of the acquisitions, as I've said before, one looks at acquisitions and the return on investment capital was always above WACC. There have been acquisitions like Viking fishing, the pelagic business, which met its hurdles and has continually -- and Ladismith that has continually exceeded the hurdles. There are others that have struggled being the abalone business and the Australia business. But again, they're exogenous factors. They're not structural issues related with issues within the business that we've seen. Businesses that we believe that didn't have a chance, we've started to offload. And as I say, our main issue in our business has been that on the fishing side, you are highly correlated to nature. So it will be cyclical. You're hoping that you've invested in species that are countercyclical and cancel those off. And you have to have growth type of businesses there, too, which is the abalone business and the Australian business. So we've tried to get a balance. I think the main thing is now to get those businesses to fire based on the metrics that we acquired with them on. I think that's the bigger target that we've set ourselves with.

Also from Rosenthal Partners, can your Australia prawn effectively compete with vannamei prawn from Ecuador, which is gaining market share? Is Australia a high-cost operation globally?

Okay. It's a tricky question. We don't -- so the answer is no, you'd never be able to compete with Ecuador. But that applies with every prawn fishery on the planet, whether you are in Argentina or you're in Australia, wherever you are. So it's a completely different product. It's comparing horse mackerel to salmon. I mean, it's a completely different product. So you're always going to find consumers that want a better-quality prawn when they go out and eat and they don't want what you get in the mainstream. So that's a matter of differentiating the product and that's what we have done. So you will find that our prawns will sell in higher level restaurants rather than your entry level that you will find used in sushi, et cetera. The second issue, is Australia a high-cost operation or country? The answer is yes. And that is why we have avoided making any acquisitions in Australia that has got any land-based facilities. So we don't have any manufacturing. The less you touch a product, that's better. Everything we do is at sea. We use labor from South Africa and the Philippines and very much handle the product, freeze everything at sea, comes on to land, goes either local or export and move the product. The less you touch it in Australia, the better it is. And that's been our strategy. So the answer to that is not necessarily because your only costs are fishing costs, not any other costs.

A related question from Lebeko Shai from Abax Investments and Moore from Aylett and Co Fund Managers. Encouraging to see catch rate improvement in January. Just have a question around the improvement in January '25 on January '24 given monthly cyclicality. And the other question, can you provide more color on recent hake and pelagic fishing?

So the only reason I would put that up is because it's significantly higher than January last year. And February is higher than February last year, so we are seeing an upward trend, to answer that question. So it's not only on year, it's on month-on-month. And secondly, fishing is a dangerous one to predict. No fishermen ever gets a rod and goes out to fish and thinks he's going to catch nothing. So it's always a tricky one. February -- January and February has been incredibly good on the hake side and it's been very good on the pelagic side. So what that says, I'm not sure. What it's saying to me is that it's better than what it was, and we are looking entering a period, where hopefully catch rates are starting to improve. But again, we must caution, we are also -- it's not only about the biomass. It's also about catchability. And when you have environmental factors, water temperature is changing, the fish is there, but you're not necessarily catching it. And when those move, you can see fish disappear very quickly. So that's the challenge, I guess, in our business. We are hunters. That's our business. I guess everybody says farming is tough, but hunting is even tougher.

Francis of PSG Wealth Financial Planning says thank you for the clear and concise reporting. It is a breath of fresh air. As shareholders, our condolences go out to the families who lost their lives last year in the tragic accident and to you as management and the Sea Harvest family. Could you just delve a bit deeper into why the catch rate was that much lower? I understand that you cannot contract with the sea. But is there anything else that management can do to address this, skills, technology, vessels, et cetera?

That's a good question again. The answer is unfortunately, no. The reality is that we have got probably the most diverse fleet in the South African fishery. We've got over 45 vessels fishing and it's a mix freezer trawlers, which go very deep; it's a mixture of hake trawlers, which are very shallow; and we're also fresh-fish trawlers, which are somewhere in the middle. So we are fishing everywhere, East Coast, West Coast, North everywhere. And when we're seeing these, it's everywhere and on all types of vessels. So unfortunately, you are at the mercy of the sea. So that is the reality. I would not be concerned with the lower catch rates. It's absolutely normal that it will hit the cycle. As I've said, we've had -- it's a discussion I've also had with my shareholders. We've had 8 years previously of consistent catch rates. It's unheard of. In which case, we've seen very consistent earnings and very little cyclicality in our core hake business. To have 3 years where it's coming off, it's absolutely normal. And you'll see in a 25-, 30-year chart that you do get those cycles. The positive is that when you return from those cycles, they tend to move up very quickly, as we've seen in January and February. So however, as an industry, we manage the operational management plan, which is the model that runs our fishery, to try and rather get consistent catch rates rather than fluctuating TACs. So we are going to again have those discussions because our TAC has gone up. And we have seen every time that our TAC goes up quite substantially, we do see a reduction in catch rates, to try and get more consistent catch rates because the catch rates are the ones that are causing variability and a bit of headache in our business.

Meintjes from Denker Capital. Second half HEPS was only ZAR 0.084, yet operating profit was similar for the two halves. What was the profit in H2, excluding impact of acquisitions. It looks like a loss?

No, it wouldn't have been a loss. Mo is more -- but it wouldn't be. The reason is that, as Mo mentioned, the acquisitions were very much an H1 business. The pelagic are very much an H1 business, so most of those earnings came there. What hurt the second half was that very little of those earnings came into the second half, but we had all the debt and we had the effect on the denominator in terms of the shares that were issued. And that's why you're seeing such an anomaly in half 2. So catch rates did come off 30% to the previous year. So there's no doubt there was lower performance. But no, we've never hit a loss at any point in this business.

I'm going to read the three questions from Moore from Aylett and Co together because they are related. The first one, Oceana has a big pelagic business that does an operating margin of circa 10%. Can you bridge the gap between that 10% and your 19%? Secondly, with a large decline in fishmeal and oil prices, what operating margin do you expect the pelagic business to do in 2025?

I think let's just go one at a time because it's quite difficult to focus on all of them.

So the first one, can you bridge the gap between the 10% and our 19%?

SO I'm not sure what the question is. Must I bring my 19% down to 10%? No, you can't compare. They're very different businesses. I think that if you look at Oceana, this is just our fishmeal and fish oil business, we've got a very small FMCG pilchard business. So I think you've got to look at the quantum of the profit that is made on Lucky Star. It's a completely different business. So it's comparing apples with pears here. So it is no comparison. I'm pretty sure if Oceana extract the pilchards -- the fishmeal and fish oil, it will be identical to our business or may be even better. So that's the answer to that.

With a large decline in fishmeal and oil prices, what operating margin do you expect the pelagic business to do in 2025?

That's a very forward-looking guidance. It will be lower from that perspective. And when we're sitting one-on-one, we can have a look at how to model fish oil prices. Fishmeal prices are relatively stable, but oil has come down from $5,500 to $2,800. And you can track that and you can see our volume, so it will be impacted. But then again, I have to qualify that fishing has been good. So you can't have -- I mean, a lot of the questions have also been around catch rates. But on the other side, you've got the opportunity to claw a lot of that back with markets. So it's not in a vacuum. It doesn't mean catch rates go down and you don't do anything. You immediately increase prices. Unfortunately, what we've managed to do in the last years is that as it goes down, we've been very aggressive on our pricing and we've been able to claw back 10%. But obviously, when you're getting a 25%, you can't go to your customers and say, "I want a 25% increase." That's not going to happen. So that's the reason why you see margin dilution. But again, with pelagic and with -- you can't just isolate pricing with catch. Both are equally important.

And the final question, did I hear you correctly that the margin difference between imported pilchards and local catch is 5% and 20%?

At the current catch rates, the answer is yes. I mean, the one you have to bring it, you're paying elevated prices out of Morocco and if you can get it. And it's incredibly expensive to import and convert. You're doing it for factory recovery and to support your brand, not necessarily because you're making money, unless you've got a very strong brand like Lucky Star. So from our side, ours is a business. It's a fishing business, so it's a lot better if you've got more local pilchards because you're making a decent margin for what you're selling. And it's not just an overhead recovery -- a factory overhead recovery.

Just a follow-up on the previous question. If you split out Oceana fishmeal and fish oil business from Lucky Star, it does 15%. Just trying to understand how the two fishmeal and oil businesses differ if they do.

The businesses don't differ. You probably will find that it's a timing issue. We report at different times. And if you put them close together, the factories are right next to each other. We do things the same. And in fact, it's probably higher at Oceana because they've got a lot more experience in the industry. But I've never done that comparison. We've only owned it for a year.

There are no other questions.

Great. Well, if there's no other questions, thank you all for attending, and thank you for your support over the past year. And hopefully, you will see a much better result next time we present. Thank you so much.