Brimstone swings to an interim profit as it slashes debt

THE group says during the year under review Sea Harvest had been resilient with revenue up 5 percent to R2.1bn for the period. Picture: Henk Kruger African News Agency (ANA)

THE group says during the year under review Sea Harvest had been resilient with revenue up 5 percent to R2.1bn for the period. Picture: Henk Kruger African News Agency (ANA)

Published Sep 1, 2021

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BRIMSTONE Investments, the JSE-listed black-controlled and managed investment holding company, said yesterday that it had swung to an interim profit and slashed debt during the six months ended June.

Brimstone posted a R339 million profit from a R129m loss a year earlier with profit before tax at R430.2m compared to a R97.8m loss in 2020.

Brimstone said profit for the period was driven by strong performances by certain of the group’s subsidiaries, and the upward revaluation of investments held at fair value through profit or loss. The company also said an increase of R75.1m in share of profits of associates and joint ventures and a reduction of R151.9m in finance costs compared to the comparative period was also a contributor.

Chief executive Mustaq Brey said all the group’s operating subsidiaries and major associate, Oceana, were classified as essential service providers and continued to operate through all Covid-19 lockdowns. This had a positive effect on the results.

“Brimstone’s de-gearing strategy, which was implemented during the level 5 lockdown last year, has resulted in the repayment of debt of nearly R2 billion since its implementation and significant savings in finance costs. Intrinsic net asset value increased marginally to R3.31bn from R3.28bn at December 31 last year,” said Brey.

Brimstone reduced debt by more than R900m using proceeds from the sale of Life Healthcare. The Life Healthcare investment was sold after 15 years following a strategic review of its portfolio last year. During the process, the group decided to reduce its exposure to certain investment in a bid to reduce debt. Brimstone also ended its relationship with clothing manufacturer House of Monatic when it sold the factory to the Foschini Group.

The group said that during the year under review, Sea Harvest had been resilient with revenue up 5 percent to R2.1bn for the period, benefiting from good performances from the South African Fishing segment, the Cape Harvest Foods segment (which includes Ladismith Cheese) and the Australian operations.

Obsidian, the leading supplier of innovative healthcare solutions to both the private and public healthcare sectors within sub-Saharan Africa, contributed R12.5m to group profit from R2.5m a year earlier.

Brey said the group was hopeful that the government’s fishing allocation process would be concluded this calendar year.

“We are hoping that it can be done, but we have some doubt whether it can be done as from tomorrow there are only four months left in the year. Whether that period will be enough to complete the process is a tough one. Our fishing companies are working with the government to ensure it gets done. If it does not get done it is not the end of the world as the quotas will be rolled over,” he said.

Sea Harvest and Oceana, Brimstone subsidiaries, are significant employers in the fishing industry.

dineo.faku@inl.co.za

BUSINESS REPORT ONLINE

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