Poultry Losses Hit Astral Foods Profit Hard11 November 2013
SOUTH AFRICA - Poultry and feed producer Astral Foods on Monday reported a sharp drop in annual profit, as a result of severe losses from its poultry division.
Headline earnings per share for the full year ended September 30 slumped 44 per cent to 443c from 787c per share a year ago, according to BusinessDay.
The group said losses incurred in its poultry segment amounted to R109m, compared with a profit of R137m in September 2012, due to higher feed costs, with gains from the marginal rise in poultry selling prices providing little respite.
Operating profit consequently fell 43.1 per cent to R272m, with the operating profit margin at 3.2 per cent, down from 5.8 per cent the previous year.
Profit before tax, which includes a profit of R79.4m following the sale of 50 per cent of the interest in a joint venture, was 34 per cent lower at R327m.
The company said its African division fared better during the period, with operating profit from this segment swelling as a result of higher volumes.
Astral’s feed division also registered gains, with revenue rising by 13.6 per cent to R4.9bn from R4.3bn in 2012.
Astral said the recently approved increase in the general rate of duty on poultry imports would go some way towards levelling the playing field.
It said the antidumping application against the European Union (EU), if successful, would improve the imbalance in supply and demand, which could provide a better chance of recovering escalating input costs.
It expected lower feed costs for the first half of 2014, which, together with the commissioning of the new Standerton feed mill during the latter half of 2014, would benefit downstream poultry production costs.
The board approved a final dividend of 222c per ordinary share.
TheMeatSite News Desk