Brimstone reports double digit revenue growth to R2.86bn

Brimstone, a South African investment company, has reported a double-digit revenue growth to R2.86 billion in 2022 despite facing significant challenges due to increased operating costs. The company's Chief Executive Officer, Mustaq Brey, broke down the annual performance in an exclusive interview with CNBC Africa's Zanele Morisson. Brey highlighted the impact of rising fuel costs, additional expenses related to transport and freight, and the disruptions caused by load shedding on the company's financial results. The additional costs incurred by Brimstone, particularly through its subsidiary Sea Harvest, have put pressure on the company's operating profit and overall profit for the year. Brey revealed that the fuel costs alone for their boats going out to sea amounted to an additional 250 million rand. This, coupled with higher transport costs and the effects of load shedding, has strained the company's financial performance. Despite the challenges, Brimstone managed to achieve a profit of over 300 million rand, allowing for a modest increase in dividends for shareholders. Brey expressed satisfaction with the company's ability to navigate a difficult economic environment, exacerbated by global issues such as the war in Europe and inflationary pressures. Reflecting on the impact of the current market conditions, Brey emphasized the interconnectedness of Brimstone's business with broader economic trends. He attributed some of the financial strains to high levels of unemployment and food inflation in South Africa. The rising costs of essential goods, coupled with logistical challenges and energy disruptions, have created a tough operating environment for businesses like Brimstone. Moreover, Brey raised concerns about the implications of these challenges on people's ability to access healthcare services. With rising unemployment, many individuals have lost their medical benefits, leading them to rely on strained state healthcare facilities. The backlog created by COVID-related disruptions has further added pressure on the healthcare system, making it difficult for people to afford and access essential medical services. Looking ahead, Brey identified the fishing industry as a potential beneficiary if fuel prices remain stable or decrease. As a major investor in fishing companies like Sea Harvest and Oceana, Brimstone stands to benefit from lower input costs, particularly in fuel. Brey also highlighted the importance of intra-Africa trade and the need for the continent to enhance its self-sufficiency in agriculture to improve food security. In conclusion, despite the challenges posed by market volatility and economic uncertainties, Brimstone remains optimistic about the future. Brey's insights shed light on the complexities faced by businesses operating in challenging environments and the strategies needed to navigate through turbulent times.