OCGPF (OCGPF) Q2 2026 Earnings Report, Transcript and Summary

Good morning, everybody, and thank you for joining us this morning at our interim results presentation. My name is Neville Brink, CEO of the Group. And I'm joined by Zafar Mahomed, CFO and over the next 1.5 hours, will take you through our half year results presentation. The format that I'm going to follow is -- I'll give a quick overview of the results. I'll then work through the divisions, the 3 operating businesses I'll then Zaf -- hand over to Zaf and he'll do the group financial results. And then I'll end off having a brief discussion on the next 6 months outlook and talk a bit about our strategy, and then we should have about half an hour for questions. So let's kick off straight away. So let me just start by saying people asked me how I felt about the results. And it's -- although we are flat on last year, it's a quite pleasing result. And why I say that is it points to the diversification of our business. And the strategy that we've developed over the last 5 years of broadening our ability to deal with the volatility of the fishing industry. And it is a volatile industry, and we've had some tough challenges in the 6 months. But overall, our business has done well because where we've had challenges, other businesses have stepped up and replace the earnings that we've seen a drop off in particular in the fishmeal and oil side. And Lucky Star, our strategy remains to grow that brand and expand into new categories. We spend substantial capital in the Wild caught side, enhancing and upgrading our factories and vessels, and they certainly have delivered this year. And then on the fishmeal and oil side, where we've had challenges, both in SA and the U.S.A., those assets are very well positioned. They're operating extremely well and are well positioned for growth in the future. So a pleasing performance in terms of the diversification and dealing with a very unpredictable environment. Just some highlights. Lucky Star and obviously, I'll go into more detail in each of these divisions. But Lucky Star strong margin-driven performance. We've seen revenue growth. Our volumes were flat on last year. But on last year's 6 months, volume growth was a record. And we've had some supply constraints, and I'll talk about that, and we've had to deal with that, but a good performance out of Lucky Star. On the Wild caught side, very, very good performance from, in particular, the horse mackerel business, but both horse mackerel and hake, assets doing well, good ability to be out there at sea delivering performance, no unplanned breakdowns. So a good growth from that business. Our division, which really is struggling this year through really no fault of their own, is our SA fishmeal and oil business, where we simply haven't seen the landings that we're expecting. We invested in those assets in both Saint Helena Bay and Laaiplek over the last 2 years, and those assets are looking good, but you need fish to drive volume through those factories and it's high fixed costs. So the under recovery of fixed cost has been a problem this year and we've had no product to sell into the market, which has driven the performance down. U.S.A., despite the fact that they are down on last year, a good performance. Remember, in the U.S.A. in our first 6 months, the bulk of the time they are in a close period. we run that season from October to April. So effectively, in the 6 months, they have 1 month of operating. And in the October 2025 year, it was better than the October 2024 year in terms of catches. And then the rest of the year is done is used for maintenance. But obviously, the product that we sold in the first -- in this half was obviously from a price point of view, down on pricing that we had in the '24 year. So a drop-off in profit, but still a very good performance. And then -- and Zaf will expand about our balance sheet, significant reduction in debt. Obviously, a large portion of that working capital, but we've restructured our balance sheet, and Zaf will talk about and we're in a very good position from a balance sheet point of view. So let's look at the divisions now. I'm going to start with the Lucky Star Foods. Operating profit, almost 41% up, revenue up 4.4%, and that's driven a significant improvement in OP margin. And it came with difficulties because over this period, we started experiencing stock shortages, and we went into an allocation mode. Sorry, I jump a slide there. In terms of what happened at the factory, we saw an increase in pilchard quota this year from 44,000 to 51,000 almost 52,000 tons, disappointing in the sense that certainly the pilchard resource seems to be recovering strongly. The research that determined this TAC was late and going out. The Africana, the research vessel only went out in April. And we believe that if this research went out when it was supposed to go out in the early part of this year, latter part of last year, we would have had a much higher allocation of quota. Right now, we are coming to the end of our catches. And the pilchard resource is still out there, very strong, and we are trying to motivate for an additional allocation later in this year from the authorities. So strong recovery in pilchards. You see the yellow block there with our Namibian quota last year, there was an experimental quota late in the year in October of 10,000 tons. The biomass study has reflected a strong recovery of the pilchard biomass in Namibia. That gave us a 10,000 tons quota late in October, we only caught about 4,500. We're hoping that the allocation and we're expecting the allocation this year to be somewhere between 20,000 and 30,000 tons. It is late in being allocated. We were hoping that, that would be allocated already because our factory involve space is certainly geared up to go fishing and produce product, and Lucky Star requires that product. So as soon as that opens up, we will be producing and bringing it into South Africa. As you can see, the landings on the bottom left are up on last year. The problem at the moment that Lucky Star faces is the availability of frozen raw material that we source around the world, and I'll cover some of the strategy around there later. But the effect of that is that our factories in both Saint Helena Bay and Laaiplek and didn't have the frozen production to put through their factories. And you can see their first quarter, second quarter, last year, 1.5 million and 1.6 million cartons, 3 million cartons in total, whereas this year, we've only produced around 800,000 cartons. Obviously, and that reflects in the number, but it does lead to under-recovery of fixed overheads in those factories. And what we were fortunate last year, as you remember, we invested heavily in stock. We bought frozen stock from particularly the Pacific, substantial stock, and that stock has certainly stood in good stead in that we were able to sell this into this year. We are now getting to a point where we'll go back into the market to look for frozen stock. We have been looking for frozen stock, and I'll talk a bit about that later. So a good performance, a little tough in terms of not having the raw material to produce through our 2 factories. As you can see, Lucky Star volumes are flat on last year, 5.1 million cartons. Last year was a record 6 months. So we maintained that despite the fact that we had limited supply, and we are managing the supply to our major customers in order to try and slow down sales a bit. It's difficult with a brand as strong as Lucky Star. It still has a very, very high penetration. As you can see, fourth largest brand in the country at 94% penetration, 4 categories we operate in, canned meat, fresh vegetables and other products and noodles. So a very good, strong, good performance. Why the margin has increased substantially is, one, we had relatively well-priced stock from last year. So our cost of sales was well priced. Obviously, with the shortage of stock, our storage costs have come down and our freight cost has gone down substantially. And we've managed the promotional material quite closely to limit the amount of promotions we went out there. And that helped us both on a margin basis and a revenue basis. So good performance from Lucky Star. Obviously, going forward, the availability of raw material is key for this brand. And certainly, in quarter 3, we're going to continue in an allocation mode. Locally, we are hoping for a second allocation in South Africa and a substantial allocation in Namibia, which will certainly help in the short term to drive production and availability of stock for Lucky Star. Internationally, we buy product from 2 main regions. One is the Morocco and Mauritanian area. And currently, Morocco and Mauritania have experienced over the last 2 years a low ebb in terms of their pilchard catches. It is improving now. Currently, Morocco has a ban on exports of pilchards. They want to supply their own canneries first. Over the last couple of weeks, the catches have exceeded what the canneries can absorb. And post-Eid, where they are going to an Eid holiday now. But post the holiday, we are hoping that Mauritania will unban the exports of pilchards, and we can certainly buy some more product from them. The main Pacific season starts now from May through to October. We are active in that, but we have a number of our suppliers there going into the Pacific region. Korea, Japan and the Russian vessels will be operating in the Pacific region, and they will go and test the waters in the next 2 weeks, and we've got substantial orders placed with them. The product from those regions will probably only arrive in quarter 4, which will mean that quarter 3 will be a low stock, and we're going to have to manage that stock very carefully. So a constrained quarter 3, but we're expecting a substantial improvement in quarter 4. The strategy remains the same in terms of Lucky Star. It's a strong brand. We continue to grow that brand. We've got flavor extensions in the canned pilchards side. We have gone -- we're reentering the U.K. market, which has been a traditional market. We are going back in there now. We've got some substantial orders to go into the U.K. market. Our entry into Ghana is now starting to get real traction. We went in last year and are starting to grow. And then we are obviously active in the school nutritional program, and that is certainly growing. So the brand, despite the constraints on raw material is still growing, and we'll have to manage this interim period where we have a shortage of product. On the canned meat side, we've had a very, very good run in our canned meat side. We've introduced a second line now in our Saint Helena Bay factory. We have 2 factories, one in Graaff-Reinet and one in Saint Helena Bay. Graaff -- both factories now are running flat out in terms of production at maximum output, and we simply can't keep up. So canned meat side is doing extremely well, and we are going to introduce some new products in that category. And then as you know, we have started and we did this last year, started the test of the noodles market. It certainly has started to gain traction now. We are contract packing. There's a contract packer that is packing Lucky Star noodles for us. We have expanded nationally now with that brand. And the intention is to invest in the full value chain over the next short period. Canned vegetables for us has been a product category that we've started to slow down. The margins are tight. It's a highly competitive category that we operate in. It still gives us good market share and forward facings, but we've now reduced our penetration in the market to target those areas where there's slightly better margin and slightly better cost in terms of going into that market. So we've reduced our volume offtake in the canned vegetable side. And then we are going to be launching one new product. I don't want to expand too much on this, but it will be done in the fourth quarter in a new category under the Lucky Star brand. So again, the strategy of expanding Lucky Star outside of pure canned fish will continue. Let me move on to Wild caught seafood. The business has done extremely well, yes, off a low base. I will say that ZAR 74 million last year, ZAR 204 million this year, of that ZAR 204 million, there is our fuel hedge in that of around ZAR 40 million. So that came through in the first half, and Zaf will expand exactly how we put that hedge in place, a financial instrument. But certainly, it has helped this business. We hedged our fuel, 70% of the fuel for the Wild caught business, Namibian vessels and SA hake vessels, but not the Desert Diamond. The Desert Diamond was held for sale. So that wasn't -- didn't fall into the fuel hedge, but certainly has helped this business. Solid performance from hake. Our hake vessels, as you know, we invested over the last 2 years in upgrading those vessels. And you can see it coming through in sea days there, 542 sea days versus 515 last year. And that is just a simple fact that those vessels are operating well and not breaking down and can get back to sea as quickly as possible. They come in, turn around, discharge and get back out to sea. Catch costs have gone up, and that's driven by fuel that the hedge doesn't sit in there, fuel costs, and that is going to be a constraint going forward. Fuel costs are a big component of our hake business, 30% of the operating cost is in fuel. Catch rates have remained more reasonably stable in hake. But what we've done as part of the strategy of this division is, the vessel goes out and fills up every day. That is the target. If we don't catch the hake, we then target the by-catch. And it certainly has driven -- so it's driven operating costs down, because you're catching more of every other species and you're filling the vessel up as much as possible each day. From a market point of view, the market remains very, very strong. Prices are at record levels. There remains a shortage of white fish worldwide. Cod supply is short and has driven generally cod prices through the roof. I don't know how consumers are affording it, but the result is that is other white fishes have also gone up. So we simply can't keep up with demand and pricing is certainly at record levels. As you can see in the last bullet point, our fuel hedging in this part of the business, in the hake business, ZAR 17.3 million is the fuel hedge that we recognized in the first 6 months. We have just received our new vessel, very exciting. It arrived last week, a vessel, a secondhand vessel, but I was on the vessel last week and the vessel is in superb condition. Brought in from Argentina, 1987, which is relatively new in vessel age. Very nice, very wide beam. We'll be able to accommodate a very -- a dual vessel, a dual factory vessel. So we'll be -- this vessel essentially will replace the Desert Diamond. It allows a lot more flexibility in operating both in the bottom trawl and mid-water trawl species. So when you are -- when horse mackerel is short or catch rates are slow, you then can target your bottom trawl and vice versa. So it allows a lot more flexibility and can counter the volatility of the Desert Diamond. As you know, the Desert Diamond was feast or famine, and it just isn't fit for purpose. So that vessel will continue to operate. We are selling that vessel, but this vessel will be replacing it. It will go through a major refit over the next 6 months and should be back into the water fishing in both horse mackerel and hake in January of next year. Very exciting looking and vessel and I'm looking forward to seeing it perform. On the horse mackerel side, very good performance, in particular from Namibia. As I said, let me start with South Africa. Desert Diamond had really good landings relative to last year. Last year, we sent the vessel to Namibia because the catch rates of horse mackerel and South were very poor. So it operated a part of the time in Namibia. It came back in the early part of this financial year, started fishing. And certainly, horse mackerel has started to improve in South Africa. We put it through a dry dock. And because it was held for sale, we expensed the full cost of that dry dock, almost ZAR 30 million against this vessel. We didn't depreciate. We didn't capitalize any of the cost and depreciate it. The vessel will continue to fish for the rest of this year. There are a number of buyers that are looking at the vessel, but we expect the vessel to be out of our lives by the end of the year, but it will continue to fish, and it had a good performance for the first 6 months. Namibia was a star performer. Despite the fact that catch rates came off slightly, the operating costs reduced quite substantially. Obviously, there was a hedge as well in this business of ZAR 24 million. Market remains very, very buoyant. The need for cost-effective protein still exists, and our horse mackerel prices are at record levels. So a very good performance from both South Africa and Namibia, and look forward to going forward with these 2 businesses. The 2 smaller businesses in the Wild caught sector, squid and lobster. Let me start with lobster steady performance. The TAC on West Coast went up by almost 60%, a little surprising to us because of the level of poaching, but DAFF is saying that the resource is recovering, which is positive to see. And then the South Coast lobster also increased a very stable. It's very small part of our business, but both doing well. The disappointing species in this business unit is squid. As you know, we invested last year in both rights and fishing vessels. We increased our fishing rights and increased our fleet. And we invested in a brand-new cat vessel that we've built. But the species had a very poor year. And I put a graph there at the bottom just to give you an indication, and that's industry catches over the last 20 years. So not just ourselves, industry catch. And you can see there are these troughs and spikes. And right now, we are in a trough, but the expectation is based on history is that we will see a strong recovery of squid. It's a short-lived species. It lays eggs. And if the conditions are not right, sea conditions and temperature conditions, then you do have a low recruitment. But certainly, based on what we're seeing on other species, in particular in the West Coast hake and horse mackerel, we're seeing a strong recovery. We're hoping that this specie will recover next year. But it is a specie I believe in, and we will see the recovery. And one of the key points is in the fishing industry, we -- you have to have diversification. You've got to be in all species because one is up and one is down. So this -- I am confident this will recover. The catamaran, even though we've had a poor performance, the catamaran within the context of our other vessels outperformed all of the other vessels. So I'm very pleased with the way that vessel has performed. Obviously, it still is at a low level. But once the species returns, we should see strong performance from that squid vessel. The business which really had a tough time, and it's reflected in the numbers. Operating profit of almost ZAR 140 million against a breakeven last year. And this was a simple fact of no fish. As you know, this is an industrial fishery, high fixed cost factories require volume to drive production through those factories. Two species that we catch is anchovy and South Atlantic herring, red-eye, as we call it. Last year, we had a record, record red-eye catch. This year, red-eye has been very, very limited. And initially, there was a 0 allocation of anchovy. That later then just recently issued a 30,000 ton quota, a very, very small quota, and that's really as a by-catch to pilchards. So when the vessels are catching pilchards and they do catch some anchovy, they don't have to stop on the pilchards that is declared as by-catch against the pilchards. But it is disappointing because -- and many of you have seen our factories over the last couple of months, we've invested in those factories. The Laaiplek factory is superb at the moment. It can produce high-quality meal and oil, but it needs volume to go through that. So it is -- and then obviously, on the sales side, no production, no sales. So it is a disappointing performance. But again, this is a business that we've invested for the long term. And I'll show you some graphs here just in terms of where we are with the resource. So top left-hand side was the red-eye landings. The light blue is what is issued by the department and what we caught last year. As you can see, we had a record catch, 96% of what the issued we caught. This year, they had a similar allocation of around 200,000 tons as a PUCL. The industry has caught 28% of that. We're out there looking at the moment, and we're certainly hoping that, that will improve going into the second half. And anchovy, TAC and catch, as you can see, '25 was a low year. And this year, so far, we've caught no anchovy. So a tough year. Long term, and it's important, the question is why are we in this industry. Long term, I still believe that this industry will deliver. And I'll talk a bit about the market later because the market is a key component of fishmeal and oil and where it's going. Top left-hand side is the anchovy biomass. And as you can see, it's a short-lived species, 3 to 4 years, but it bounces back strongly. So last year, we had a low 2024, so when I said 2 years ago was a low. The biomass measurements this year. So last year, in 2024, the biomass measurement was 113,000 tons against a high, you can see 6.7 million tons is the top end in the early 2000s. This year, the biomass measurement was up to 626,000. So a strong improvement in the biomass, still a low biomass, but what is key there is this upward trend. And we're certainly hoping that going into next year, that trend will continue, and we'll have a decent allocation of quota. It does bounce back very quickly, and we are very well positioned at the moment from a factory point of view to take advantage of better catches and production. The biomass and red-eye is fairly stable over the last couple of years, surprising that we haven't seen the fish, but it seems to be at a level that will continue that. So it appears -- and I was hoping that anchovy would bounce back strongly this year. It appears that we should -- that things will get better and we'll have a good year next year with the recovery both of anchovy and red-eye, but a tough year for them and will be a tough second half. There's no doubt. U.S.A., similar business, as you know, produce fishmeal and oil, a reasonable performance, operating profit of ZAR 270 million against ZAR 370 million last year, down ZAR 100 million, margin, which shows that we brought costs under control, margin in line with last year. And this was just a function of pricing. So Daybrook is in a very good position now. We started the season. The season has just started 4 weeks ago. This is a 28-week season. We started middle of October and -- sorry, we started middle of April and finished middle of October. In the first -- for this year, obviously, volumes were very similar to last year in terms of sales volumes, pricing. The only difference between this year and last year was pricing came off. In 2024, the Peruvian catch was very good. Markets -- and it is a commodity market we play in, and we saw prices come off relative to 2024. And that's what drove the performance, the reduction of ZAR 100 million operating profit. In terms of landings, long-term average is around 600 million fish. As I've explained before, in America, they don't count in kilos or tons, they count in fish. And we've land around 600 million fish on a long-term average. If you exclude the '21 year when we had the hurricane, it's around 625,000 tons. Right now, our catch rates after 4 weeks are almost double what we landed last year. You can see on the right-hand side, the red line is last year. The black line is ours. The long term -- the 5-year average is the dotted line. So for the start of this season, we are well ahead of last year, and in fact, 20% ahead of the 5-year average. So very good signs out of that industry for the season. Based on the current projections, we certainly should exceed the 5-year average of 625 million fish, certainly hoping to get closer to 700 million fish, which will bear us in good stead for both the balance of this year and next year. So a good performance despite the fact that they're down, but very positive signs coming out of this fishery in terms of going forward. And I spoke about this last year, we are -- and it's our partners, Westbank, we will be introducing a new vessel, a new type of vessel. And I thought I'd just show you a picture and give you a little fishing lesson. The left-hand side is our current vessels. We have 12 of those vessels that go out. That's a carrier vessel with 2 skips or purses on the back that get deployed when they get to the fishing grounds. We have planes that go out and look for the fish, when they spot the fish, the fleet goes to where the fish are, they deploy those 2 purses and those purses drop a net, say net and circle the fish. The vessel on the right-hand side is an Alaskan single seiner that has been operating and these are the vessels that operate in the salmon, the wild caught industry in Alaska. They are smaller vessels, they are jet engine, and they -- you don't need to deploy 2 purses. They fish, they are a purse on their own. The key for this is can that vessel on its own circle the fish quick enough and quietly enough to catch the product. The big difference between these 2 vessels is the crewing. The vessel on the right, the new one has a crew of 4 and can stay out sea for a month. It doesn't have to come back every day. The vessel on the right -- on the left-hand side, our current vessels have a crew of 14. So operating costs are a lot less in this vessel. So the trial will be -- can these vessels purse effectively in the fishery, in the menhaden fishery as they do in the Alaskan salmon industry. Both fish are fast swimming fish, so it will be interesting to see. We will then use one of our vessels on the left as a carrier vessel. So this vessel will stay at sea purse -- the carrier vessel won't carry the 2 skips. It will come alongside, put the net, put the pump into the purse, suck it out and go back down to the factory and run backwards and forth. And we have to use 2 or 3 carriers. So it will be an interesting experiment. As you know and as I explained before, this fishery is not a TAC fishery. It's not governed by quota or tonnage. It's governed by time. We have between October -- between April and October, we can catch as much as we can. The resource is very, very healthy. The biomass has seen strong growth. Currently, the industry takes between 4% and 5% of this biomass out. So there's lots of scope to increase the volume uptake of this. And we're hoping that this vessel and if it works, there are -- these vessels are available. The Alaskan salmon industry has taken some strains. So there are a number of these vessels, which are available for us to bring down. So it will be an interesting experiment. And we're certainly hoping that this will deliver and our partners are very optimistic about this new fishery. So let's see how this operates. I will go -- I will be visiting the states in June and go visit and get on one of these vessels to see how it operates. It will be in, it is just landed in Fort Lauderdale. It came down by a carrier vessel, landed there. It will be in this fishery in early June. So very exciting new development. I want to talk about the market. And this, again, is something we don't control, but it has a massive effect on pricing in the fishmeal and oil market. Top left-hand graph is the Peruvian catch. Dark blue is what they call the first season. Light blue is what they call the second season. Last year, first season was 3 million tons, second season 1.6 million. Normally, this industry catches about 5 million carton, 5 million tons a year. This season, they announced a very low first season allocation, 36% down on the first one, 1.9 million tons. The fleet went out and have been really battling to catch fish, so much so that the authorities put in mini bans. Certain areas get banned of fishing. And it was not only the catch that they were battling, it was with the amount of juvenile fish, youngsters in the catch. The levels were anything between 40% and 70%. And obviously, that is, you're destroying future biomass. So the authorities are very concerned about the level of biomass and the level of catch. And they've currently put a second ban in. So the vessels went out, put a second ban in, that ban will expire on the 26th of May, and then they will be -- make a call on whether they either close the season permanently or allow them to continue fishing. The current catch is around 450 million tons -- sorry, 450,000 tons compared to that 1.9 million tons. So very, very low catch. The second point that has come through from the authorities is the El Niño. The start of an El Niño event. Already the water is warm, and hence, the lack of catch and the poor catches. But the concern is that we're going into an El Niño period. We know certainly, South Africa, we're going into El Niño. There, they're going into, and they're talking about a potential super El Niño. If that is the case, they won't have a second season. Now that has a massive effect on the market, the fishmeal and oil market. And if you look at the top right-hand chart there, currently, world production is at a 9-year low. That 4.9 million tons, that's all fishmeal and oil -- fishmeal in particular, production is at a 9-year low. And that 4.9 million includes the 1.9 million allocation of this year from Peru. So if the catches, or either stopped or curtailed, that number is going to be very, very low. On the bottom left, we've seen the continuous growth of aquaculture and the aqua feed demand. As you can see, growth is expected to continue at a CAGR of around 3%. So demand continues to grow. Right now, from a buyer and seller point of view, we're out there talking to buyers. No, most of the sellers are not going to commit right now. Buyers obviously would like us to commit. We know the pricing is going to go up. We just don't know to what level. So we are holding back as an industry. So it does put Daybrook in a very, very good state given the fact that we're having good catches and reasonable oil yields, and the fact that over the next few months, we will see a stop -- a massive reduction in supply of fishmeal and oil. This is not only positive for Daybrook for the second 6 months of this year, but certainly into 2027, where we'll see the real benefit of this dynamic that's playing out in the industry at the moment. I don't know what the price is and the indications are at the moment that fishmeal prices are somewhere between $2,500 a ton and $2,800. And the latest indications we've seen on oil are somewhere between $5,000 and $6,000. So going back to the levels we saw in 2024. So very positive for U.S. and for South Africa, if we can see fish come back next year. I will hand over to Zaf now, and then I will come back and talk a bit about outlook and strategy.

Thank you, Neville. Strong performances by both Lucky Star foods and Wild caught seafood helped offset lower results from fishmeal and fish oil businesses. Revenue declined by 6% to ZAR 4.9 billion. Despite the overall decrease, Lucky Star foods delivered 4.4% revenue growth, supported by sustained demand and a favorable sales mix. The Wild caught seafood segment benefited from strong pricing and improved catch rates, contributing to revenue growth of 19.1%. In contrast, revenue from the fishmeal and fish oil segments was negatively impacted by lower South African industrial fish landings and weaker global fishmeal and fish oil pricing. Operating profit was slightly below the prior year, declining by 1.6% to ZAR 665 million compared to ZAR 676 million in the comparative period. Headline earnings per share increased by 7.7% to ZAR 3.498 per share, primarily due to a significant reduction in net interest expense compared to the 6 months ended March 2025. An interim dividend of ZAR 1.10 per share has been declared, unchanged from the interim dividend paid in the comparative period. The group's net debt-to-EBITDA ratio improved to 1.1x, which is a significant improvement compared to the 2.2x at the end of March 2025. Reflecting capital repayments made across both regions and lower working capital levels in South Africa. From an operating profit review perspective, the first half of the 2024 financial year represented an exceptional performance, as Neville mentioned, with fish oil prices at record highs. Total operating profit for the first half of the current financial year is in line with 2 of the past 4 years. Despite this, contribution by segment differs significantly in each year, reflecting the benefits of the group's diversified business model. Lucky Star Foods delivered a strong performance with operating profit increasing by more than 40% to ZAR 324 million, driven by solid sales volumes and stronger operating margins. Its contribution to group operating profit increased from 34% to 49%. Better pricing, improved catch rates and lower fuel costs contributed to Wild caught seafood delivering a strong turnaround. Operating profit increased significantly from ZAR 74 million to ZAR 204 million, and operating margin increased from 5.7% to 20%. Fishmeal and fish oil Africa recorded a loss of ZAR 139 million compared with a loss of ZAR 5 million in the prior period, primarily due to significantly lower red-eye and anchovy landings, which were down 62%, together with the reduced availability of pilchard trimmings from our canneries. Daybrook's operating profit declined by 26.7% from the prior period due to weaker global fishmeal and fish oil prices. Despite this drop in financial performance, its operating margin remained consistent at 24.2% compared to 25.7% in the comparative period. Moving on to our detailed income statement. Gross profit margin improved to 28.1%, primarily driven by strong performance of both Lucky Star foods and the Wild caught seafood segment. Lucky Star Foods achieved higher margins due to lower inventory holding and fish procurement costs, a favorable sales mix and higher volumes of locally-caught pouches, which mitigated lower local canning production. Wild caught seafood margins improved due to higher volumes, stronger market prices and lower fuel costs. These improvements were partly offset by weaker margins in the fishmeal and fish oil segments. Operating profit decreased marginally by 1.6% to ZAR 665 million. Overheads were down 6.1%, which includes a fuel hedging gain of ZAR 43 million, of which ZAR 33.4 million is unrealized. Our fuel hedging strategy helped manage this key cost input during the period, and I will cover this in detail in the next slide. Excluding the impact of fuel hedging as well as the net effect of the Desert Diamond suspended depreciation and class renewal costs amounting to ZAR 30 million. Overheads declined by 3.3%, reflecting the group's focus on cost containment. Net interest expense reduced by 31.3% to ZAR 99 million. The ZAR 33 million net interest reduction in South Africa was primarily due to materially lower working capital levels and the positive impact of capital repayments. In the U.S., net interest expense decreased by ZAR 12 million due to lower debt levels following capital repayments made in both the current and prior periods, a favorable rand exchange rate effect and the transition to a revolving credit facility in December 2025, which eliminated negative carry. The effective tax rate increased to 25.4% from 24.3% due to a lower proportion of U.S. earnings, which is taxed at a lower rate. Profit after tax increased by 5% to ZAR 422 million compared to ZAR 402 million in the comparative period. Detailed financial statements have been included in the appendix to this presentation and the results booklet, which is available on our website. As I mentioned earlier, some detail on our fuel hedging. Fuel is the largest cost in the Wild caught seafood business, representing approximately 1/3 of operating costs if you assume crude oil at $65 per barrel. The annual cost at this level is approximately $360 million at an average usage of about 25 million liters of fuel. At the beginning of the financial year, we structured a cap and collar hedge covering approximately 70% of forecasted fuel consumption for our hake fleet in South Africa and horse mackerel operations in Namibia. The hedge is based on our estimated fuel usage, excluding Desert Diamond, which is held for sale and runs from November 2025 through to September 2026. The collar is set with a floor at $60 per barrel and a cap at $65 per barrel. The structure provides protection when the oil price exceeds the cap as we receive cash inflows that offset higher fuel costs. There is no hedge impact within the collar range, and we forgo any benefit from falling prices below the collar. Operating profit for the first half includes a fuel hedging gain of ZAR 43 million. Of this, ZAR 9.4 million is realized, with a further ZAR 33.4 million in unrealized gains as oil prices have traded above our cap strike rate. A 10% change in the oil price has an impact of approximately ZAR 10 million on our current operating costs. It should be noted that the hedge was taken using the ICE gas oil price, which has a higher correlation to the marine gas oil that we use. This has the added benefit of approximately ZAR 20 million as gas oil has increased by 89% compared to Brent crude at 60%. We spoke a lot about working capital. Net working capital reduced from ZAR 3.3 billion to ZAR 2.7 billion (sic) [ ZAR 1.8 billion ]. Primary driver of this was a 60% reduction in Lucky Star foods inventory, largely due to lower volumes of fish procured, which came off elevated levels in the prior period. Fishmeal and fish oil Africa inventory decreased by 50%, reflecting lower production output. Higher levels of frozen fish procurement are expected to result in higher working capital levels and inventory holding costs during the second half. This will result in higher short-term borrowings and a corresponding increase in interest expense in South Africa. The group has sufficient credit facilities to fund any increase in working capital. The group's net debt declined by ZAR 1.8 billion from ZAR 3.5 billion to ZAR 1.7 billion at the end of March 2026. This decrease was driven by a reduction of ZAR 1.3 billion in South Africa and ZAR 445 million in the U.S. due to capital repayments made across both regions and lower working capital levels in South Africa. The group's net debt-to-EBITDA ratio accordingly improved to 1.1x, which is significantly lower than the 2.2x in the comparative period. In South Africa, the ratio improved from 3.7x to 1.5x and in the U.S. from 0.7x to 0.3x. The group complied with all lender covenant requirements relating to all its debt facilities during the period. The U.S. balance sheet reflects a significant deleveraging over the period with gross debt having reduced by $88 million from $107 million at the end of September 2021 to $19 million at the end of March 2026. $123 million of gross debt and $132 million in dividends have been paid since the acquisition of Daybrook in 2015. This amounts to approximately ZAR 4.2 billion if we assume an exchange rate of ZAR 16.50 to the U.S. dollar. The primary focus has been to deleverage the U.S. balance sheet and reduce U.S. dollar debt. The transition to a revolving credit facility in December 2025 has further enhanced the capital structure by eliminating negative carry and will now allow more dividends to flow through to the group. In South Africa, net debt has decreased to ZAR 1.6 billion, driven by capital repayments and significantly lower working capital. As a result, the leverage ratio dropped to 1.5x. A short-term facility of ZAR 1.6 billion remains available to support working capital needs in South Africa, providing sufficient liquidity headroom. Capital expenditure for the half year was ZAR 116 million, down from ZAR 183 million in the comparative period. Spend included scheduled maintenance for the hake fleet, a deposit for the acquisition of a dual-purpose vessel and regular maintenance at the group's processing facilities. The planned capital expenditure for the financial year is ZAR 542 million. Replacement capital expenditure represents ZAR 312 million, which is largely in line with our historic average spend and includes an additional canned meat line on the West Coast. The most significant capital item is ZAR 230 million for the recently acquired dual-purpose vessel that was delivered in May 2026. This vessel is currently undergoing a comprehensive refit to equip it to target both the hake and horse mackerel fisheries, further supporting fleet versatility. Fishing operations are scheduled to commence in January 2027 following completion of these upgrades. The interim dividend has been maintained at ZAR 1.10 per share, unchanged from the prior year, reflecting operating profit in line with the prior period, the lower working capital levels and takes into account the unrealized hedging gains recognized to date. Cash generated from operations increased significantly to ZAR 1.4 billion compared to ZAR 10 million in the comparative period. This improvement was mainly due to a reduction in working capital requirements during the period, largely resulting from lower volumes of fish procured by Lucky Star foods. The group delivered cash operating profit of ZAR 821 million for the 6 months to the end of March 2026, with South Africa contributing ZAR 476 million and the U.S. contributing ZAR 345 million. Reduced working capital levels released cash of ZAR 603 million, largely resulting from lower volumes of fish procured in Lucky Star foods. The group paid ZAR 246 million in dividends, which was a final dividend of ZAR 1.75 per share declared for the 2025 financial year. Free cash flow conversion has improved significantly and underlines the positive impact of reduced working capital requirements as well as the strong cash-generating capability of the business. As a result, the group repaid ZAR 993 million in net debt. In South Africa, this included the repayment of short-term facilities as well as capital repayments on term debt. In the U.S., the transition to revolving credit facility resulted in a further repayment of ZAR 567 million, significantly reducing debt levels. The group's cash balances closed at ZAR 459 million compared to the ZAR 603 million opening cash position. Following the significant reduction of U.S. debt to an optimal level and the move to a revolving credit facility, the group will prioritize the reduction of debt in South Africa, along with maintaining a focus on cost control and prudent capital expenditure. The strategy of investing in our assets and reducing debt over the past 4 years has positioned the group to capitalize on resource availability, market demand and stronger pricing. Thank you, and I hand back to Neville, who will cover the outlook for the business.

Thank you, Zaf. So where to for the next 6 months? Lucky Star, obviously, is a great brand and continues to have strong consumer acceptance and demand. We are in a position we have sufficient stock, relatively sufficient stock for the next couple of months, but the focus will be on replenishing the frozen stock, in particular, for the quarter 4 and for going into next year. So -- and I've spoken about that in terms of the plans. We're certainly hoping that both the Pacific and the Morocco will fire, and we will get some additional product from our Namibian and local suppliers as well. So a strong focus on managing costs. We will be obviously limiting promotions over the next period because we simply cannot supply the demand that the customers want, and we'll have to manage this period until we can replenish the stocks at a level that can drive promotion again. Good business, constrained slightly at the moment in terms of supply, but good prospects going forward as soon as we can replenish that stock. On the Wild caught side, pricing remains very, very firm. We've got to leverage. Our vessels are in a very good state at the moment. We are managing input costs. Obviously, fuel is a concern for us. We are -- we have a hedge in place, but long-term trend of where fuel is a big concern, and we have to manage that very, very carefully. We do have 4 vessels going into maintenance, the 2 Namibian horse mackerel vessels and the 2 hake vessels are planned for standard repairs and maintenance, which will pull back some of the sea days. But this business based on supply and demand is in a very good position for the balance of this year. On the fishmeal and oil side, you've seen what's happening to the market. How that will play out over the next couple of months is going to be interesting to see. But certainly, there's no doubt that pricing on both fishmeal and oil is going to increase substantially. We will concentrate. We will be talking to our buyers over the next couple of months in terms of setting some prices, but we'll be setting prices for this year and for next year. So good outlook for the fishmeal business, in particular in the U.S.A. and certainly in SA, if we see a return of both anchovy and red-eye. I think that covers it. Happy to take some questions.

Neville, questions we have so far from [indiscernible]. How do you balance expansion of Lucky Star pilchards into other countries with supply constraints and pricing?

Good question. Obviously, we are always trying to grow our Lucky Star brand. And this is, in my mind, a short-term blip. 80% of the product we get for Lucky Star is supplied from various geographies outside of South Africa. Indications are that the Namibian product is coming back -- the Namibian biomass is coming back strongly. And should that happen, we -- there's plenty of room for growth. So we do have to balance it. Allocation mode is never a nice position to be where customers are looking for stock and we cannot supply them. But we do -- I don't want to restrict our sales force in terms of growing our market share. So even the new countries we go in will be limited in terms of supply. It is a fine balance.

Second question from [ Murray Muller at Elliott ]. When do you expect the Namibian pilchard quota allocation?

Latest indications are by the end of May. We were hoping that it will be earlier. The industry is pushing hard that the authorities make a call. I think, obviously, it's not a TAC yet. So the question is who does it get allocated to? We believe that it will be kept with government and what they call government objectives and industry can purchase the quota from them. We're comfortable with that, but the latest indications was by the end of May.

Next question is from Nick Wilson, News24. Could there be a shortage of Lucky Star canned fish on shelves because of the supply constraints?

I don't think there'll be a shortage on shelf. There's sufficient stock for us to cover -- to certainly go forward for the next 4 months. The question is, can we -- thereafter, if we don't find supply, then there may be a shortage. We are being very cautious about our promotional activity. So we are limiting volume offtake by being scarce in our promotional activity. So it's a double-edged sword. We're artificially reducing volume output to try and manage the stock that we have going forward over the next 3, 4 months. And hopefully, by then, we'll have the replacement stock.

Another question from [ Murray at Elliott ]. With the potential for strong results out of Daybrook and Wild caught doing what it's doing, is there potential for you to be debt-free in a year?

I don't think we'll ever be debt-free. We will always have a working capital facility. So typically, our working capital facilities run from March, normally, it's at about ZAR 1.5 billion to September at about ZAR 750 million. This was an unusual year as we spoke about pilchard procurement. But we will always have a working capital facility because that is the nature of the Lucky Star business. From a term debt point of view, we would hope that we would be able to -- other than the share that's paid out in dividends, that now Daybrook is in a far better position to pay more dividends to South Africa, given that it's now on a revolving credit facility. And so would it be within a year? Not quite. But yes, we're looking at reducing our term debt in South Africa as the next stage in our balance sheet optimization.

Thanks, sir. Another one for [ Murray ]. This one for you, Neville. Canned meat seems to be coming through nicely, peak margins. What's the margin split between pilchards and the rest?

Let me say that certainly, the margins on canned meat are better than on the canned fish. The margins have improved on canned fish, as you've seen. But margins on canned meat are hesitant to say what they are, but they're certainly better than canned fish.

Okay. We have no other questions at this point. So I think we can conclude.

Well, thank you, everybody, for joining us today. I look forward to seeing you over the next couple of days. We're having one-on-one meetings with a number of our investors. So certainly, we're in a good position, and I'm certainly looking forward to the second year. I think it's going to -- the second half. I think it's going to be a very interesting second half with some challenges, but with certainly some bright spots on the horizon. Thank you, everybody.