Oceana : Reviewed Condensed Consolidated Results For The Year Ended 30 September 2021

Oceana Group Limited

Incorporated in the Republic of South Africa (Registration number 1939/001730/06)

JSE Share Code: OCE

NSX Share Code: OCG

ISIN Number: ZAE 000025284

("Oceana" or "the Company" or "the Group")

https://oceana.co.za/pdf/Condensed_results_2021.pdf

REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

The information in this press announcement has been extracted from the reviewed information, but this announcement is not in itself reviewed.

SALIENT FEATURES

• Solid performance in the context of 12 months COVID impact on business operations and consumers
• Group revenues softened by supply impediments and stronger Rand but mitigated by strong demand in all segments
• Africa operations perform admirably
• Revenue R7 633 million (2020: R 8 308 million)
• Profit before tax R1 009 million (2020: R1 146 million)
• Earnings per share 570.7 cents (2020: 650.9 cents)
• Headline earnings per share 550.0 cents (2020: 628.4 cents)
• Balance sheet strength maintained, and debt levels reduced
• Total dividend 358 cents per share (2020: 393 cents per share)

COMMENTS

DELAY IN FINALISING GROUP FINANCIAL RESULTS

During October 2021, Oceana Group Ltd ("the Company"), its subsidiaries and joint arrangements (collectively referred to as "the Group") were made aware of concerns raised by a whistle-blower relating predominantly to the accounting treatment of a United States subsidiary of the Group, Daybrook Fisheries Incorporated ("Daybrook") together with its 25% interest in Westbank Fishing LLC ("Westbank"). In order to protect the integrity of the Group's accounting and governance processes, the Board took the decision to undertake a comprehensive forensic investigation and review process of all matters raised. In February 2022, the auditors raised a new concern regarding the dating of signatures on an internal document pertaining to an insurance claim in the amount of USD4.2 million that was then also independently investigated. As a result, the publication of the annual financial results was delayed.

The results of these investigations and the basis for the delay in the publication of the annual financial results were communicated in SENS publications on 10 December 2021, 31 January 2022, 10 February 2022 and 25 February 2022. The backdated documents created concern that other insurance claim documentation was also backdated. ENS Forensics performed a comprehensive review and was able to confirm no further impact to the consolidated financial statements as a result of the backdating of any insurance claims. However, the

investigation did identify other instances of backdating, although none of those instances impacted the annual financial statements. The Oceana Board views the practice of backdating documents in a serious light and is implementing appropriate remedial interventions to address this, which includes disciplinary action and training. The forensic investigations concluded that none of the matters considered resulted in financial loss to the Company nor was there any evidence of fraud or criminal conduct. A detailed summary of the findings of the forensic investigation completed in December 2021, as well as a preliminary update on the forensic investigation pertaining to the insurance matter, is available on the Company's website at http://oceana.co.za/investors/sens-announcements/. Some of these matters are dealt with further in the prior period restatement notes (refer to note 16).

GROUP OVERVIEW

The Group demonstrated agility and resilience in delivering a good operating performance relative to the strong base that was set in the prior year. Continued strong demand and consequential improved pricing for all our products have underpinned our performance, particularly in canned fish, horse mackerel, lobster, squid and cold storage. Supply to our global fishmeal and fish oil customer base was, however, negatively impacted by unfavourable weather conditions affecting both SA anchovy and US menhaden catch.

Group revenue decreased by 8.1% to R7 633 million (2020: R8 308 million) as a result of lower canned fish, fishmeal and fish oil sales volumes, lower occupancy levels in the commercial cold storage segment, and a stronger exchange rate on export and US dollar translated revenue. This was offset by favourable pricing across most products.

Higher fixed cost absorption from lower fresh fish landings impacted gross margins, which reduced to 33.7% (2020: 36.7%).

The Group's underlying performance for the year was also negated by the following extraneous events:

• The Desert Diamond suffered main engine damage in October 2020 resulting in the vessel being non- operational for 49 days.
• During July 2021, the Group's Lucky Star canned fish operations were disrupted by civil unrest and looting in KwaZulu-Natal ("KZN"). Inventory lost of R86 million hindered product availability for the remainder of the year. The R20 million outstanding balance of the total R108 million insurance claim (including loss of profits) has not been accrued for but has been disclosed as a contingent asset at year end.
• Operations in the USA were affected by Hurricane Ida, which made landfall on 29th August 2021. Damage was limited by flood protection measures, but disruptions to road access and utilities resulted in plant closure for a week. Fishing conditions after the hurricane were challenging, contributing to further reduced landings through September. As the R63 million business interruption insurance claim was received in October 2021 it has not been accrued for but has been disclosed as a contingent asset at year end.
• The Group continued to incur costs in ensuring a safe operating environment during the Covid-19 pandemic at both its land- and sea-based operations. However, fishing operations were disrupted, and our canned fish and cold storage operations were further challenged by global container shortages and port challenges.

Other income includes insurance claims related to the Desert Diamond (R28 million) and the Covid-19 costs (R30 million).

As a result of the above, and partially offset by a stronger rand and tight cost control, Group operating profit before other operating items decreased by 14.3% to R1 185 million (2020: R1 383 million). If the insurance claims, referred to in note 18, of R83 million (which all relate to insured losses incurred during the year) were to have been recognised before year-end, the decrease in Group operating profit before other operating items would have been limited to 8.3%.

Other operating items of R16 million (2020: R17 million) include the profit on disposal of the Bayhead cold store facility of R28 million, and R11 million once-off transaction costs pertaining to the establishing of new BEE trusts.

Net interest expense reduced by 24.2% to R192 million (2020: R254 million) due to lower interest rates, debt

repayments of R222 million (2020: R350 million) and the benefit of lower inventory levels on short term funding requirements.

Headline earnings declined by 11.2% from R734 million to R652 million, with headline earnings per share declining by 12.5% from 628.4 cents per share to 550.0 cents per share. If the insurance claims, referred to in note 18, had been recognised, the decrease in headline earnings per share would have been limited to 4.7%.

CASH FLOW AND FINANCIAL POSITION

Management continued a defensive approach to cash flow management, with tight cost control due to the ongoing uncertainties of the Covid-19 pandemic.

The decline in overall cash balances to R934 million (2020: R1 433 million) is largely the result of the R222 million net movement in borrowings, a R137 million outflow for working capital purposes, R133 million outflow for the unwinding of the Oceana Empowerment Trust and a R116 million reduction arising from the translation of the USA cash balances at a lower exchange rate.

During the year the SA loans were refinanced on similar terms but with repayments extended to 2025 and 2026. The Group's net debt levels reduced by 5% to R2 127 million (2020: R2 241 million) and the Net Debt to EBITDA ratio, increased to 1.5 times (2020: 1.4 times), excluding the net debt/ EBITDA of the joint operation.

The Group is required to comply with lender covenant requirements relating to both its SA and USA debt. These requirements are closely monitored and in the event that there is a risk of breaching a covenant, negotiations are entered into with the respective lender to remediate.

The negative effect of Hurricane Ida on the USA operations resulted in both Daybrook (Net Debt to EBITDA ratio) and Westbank (fixed cover ratio) being at risk of breaching covenant requirements and negotiations were entered into with lenders. Subsequent to 30 September 2021, Westbank's lender agreed to waive the fixed cover ratio covenant requirement and Daybrook amended its credit agreement, following approval of lenders, to increase the net debt to EBITDA covenant requirement retrospectively to 30 September 2021.

In compliance with IAS1, the Group has classified the long-term portion of the Westbank term loan as a current liability as the waiver of covenant requirements was only approved by the lender subsequent to the year end. This amount has subsequently been classified as long-term with effect from 1 October 2021. Refer to note 10.

REVIEW OF OPERATIONS

Canned fish and fishmeal (Africa)

The continued strategic focus on affordable pricing ensured canned fish demand remained strong, despite the constrained consumer environment. Canned pilchard sales volumes in SA declined by 5%, particularly due to tough trading conditions in the first half of the year. This was partially offset by an 11% improvement in volumes to neighbouring countries and the rest of the African continent based on improved demand. Overall sales volumes of 8.9 million cartons (2020: 9.5 million cartons) reflect positive trading conditions in the second half of the year, notwithstanding the reduced stock availability resulting from the KZN riots and the impact of global supply chain and port challenges on stock availability.

Procurement of frozen fish decreased by 32% due to global supply chain impediments and the effect of Covid- 19 on fishing in West Africa early in the calendar year. The enhanced reliance of our canneries on imported frozen pilchards and lower procured volumes as well as supply chain disruptions negatively affected operations, overall fixed cost recoveries and stock availability. Offsetting this, fresh pilchard catches were up by 64% on the prior period, albeit off a very low base.

Despite these challenges, operating margins increased due to a 5% price increase, and continued focus on production efficiencies. A stronger exchange rate further contributed to operating profit margin improvement.

The Group's African fishmeal and fish oil segment was hampered by a 40% reduction in industrial landings due to by-catch limitations in the early part of the season, and more adverse weather days in the mid-season. Fishmeal demand improved significantly during the period with increased feed production in China contributing to improved pricing in the global market. On average, a 9% pricing benefit was realised (in US dollar terms).

Overall volume decline in this segment further reduced fixed cost absorptions and notwithstanding strong pricing, overall profitability declined by 8%.

Fishmeal and fish oil (USA)

Our USA business endured a difficult year as overall operating conditions were hampered by poor fishing conditions and lower opening inventory levels. Covid-19 restrictions influenced crew availability, reducing the overall efficiency of the Westbank fishing fleet. This was exacerbated by Hurricane Ida, as mentioned above.

Overall sales volumes were 12% down on the prior period, despite a 20% reduction in landings.

Revenue for the year declined by 10% in US dollar terms, benefitting from healthy demand, particularly in the US where continued growth in petfood consumption contributed to steady pricing. Increased aquaculture activity in Europe and China had a positive effect on fish oil pricing. On average fishmeal pricing increased 2% and fish oil pricing 5% (in US dollar terms).

Overall operating profit declined 36% in US dollar terms and margins declined to 15.4% (2020: 22.3%) as a result of lower catch rates and lower production volumes. The full Hurricane Ida business interruption costs are accounted for in the current financial year with the related insurance proceeds only recognised in 2022. The decline in revenue and operating profit was exacerbated by an 11% strengthening of the rand.

Horse mackerel, hake, lobster and squid

The segment delivered a 9% growth in operating profit driven by strong demand for fresh fish products in key African geographies.

Horse mackerel operations delivered an exceptional result, remaining resilient throughout the year. Strong demand for fresh fish protein particularly across the traditional African markets, coupled with supply shortages, contributed to very favourable pricing.

Hake landings decreased by 8% due to fewer sea days brought upon primarily by unplanned maintenance and Covid-19 protocols. Pressure on revenue arose as a result of short-term pressure on European pricing due to decreased out of home consumption in the first half of the year. Pricing restored to normalised levels during the second half of the year.

Profitability in the lobster segment benefited from improved pricing. The squid sector experienced good catch rates throughout the year.

Commercial cold storage and logistics (CCS)

The CCS business delivered a good performance despite lower occupancy levels from both our own frozen fish, and third-party requirements. Increased per pallet revenue and improved occupancies and throughput in Gauteng and Namibia were good despite supply chain disruptions and global container shortages. Additional cost saving initiatives were implemented resulting in improved margins for this segment.

OCEANA EMPOWERMENT TRUST ("OET")

The OET (formerly Khula Trust) established in 2006 and holding a 10.2% shareholding in Oceana vested in January 2021. On vesting, 99% of the 2 431 previously disadvantaged employee beneficiaries elected to exit the trust either by selling or taking transfer of their respective shares. The total additional value delivered to beneficiaries that elected to exit the OET was approximately R401 million (before tax), bringing the trusts full value to beneficiaries (including distributions and advance pay out) to just under R900 million over the trust's life. In addition to the direct financial benefits received, beneficiaries were also provided with personal financial management programmes thereby enabling them to become financially empowered.

During the year, shareholder approval was obtained to establish two new empowerment Trusts, namely the Saam-Sonke Trust holding a 6.0% shareholding in Oceana with participatory rights allocated to qualifying employees and the Oceana Stakeholder Empowerment Trust holding 0.5% shareholding in Oceana with participatory rights to be allocated to fishing partners.

PRIOR PERIOD RESTATEMENTS

During the preparation of the current year financial statements, certain incorrect classifications were identified requiring the restatement of the previously reported consolidated statement of comprehensive income, consolidated statement of financial position and consolidated statement of cashflows. The restatements had