Astral Foods manage improved results with 15% revenue increase despite bird flu

SOUTH AFRICA – Astral Foods, the South African integrated poultry producer has reported positive results, having managed 15% increase in revenue to US$535.93 million despite challenges with the Avian influenza in the period, according to IOL Business report.

While operating profit grew by 392.6%, the group’s operating profit margin increased 15.7% as compared to the same period last year.

The period was favoured with improved poultry supply and demand balance, giving both volume and price support coupled with significant improvement in the poultry division’s profitability.

Astral’s Chief executive Chris Schutte said they expect the avian influenza to resurface in the winter despite of bringing it under control and it was striving to monitor the situation.

“We are experiencing higher levels of competitiveness as producers have expanded their broiler production numbers and the pork industry is currently selling product at very competitive prices.

The continued high levels of poultry import, especially from the US and Brazil, remain of grave concern,” he said.

According to the company, the monthly total poultry imports for the period equalled 44% of local production or an average of 46,850 tons a month.

“I still believe the imports have a negative impact on the SA economy as it becomes difficult to create more jobs in the sector as it becomes complicated to reinvest in our business.

Sadly, the negotiations we had with the government to protect the local industry hasn’t led to a meaningful change in the number of imports,” Schutte added.

Across its three divisions including the rest of Africa, the poultry segment recorded a 23% growth in revenue to US$440.05m and operating profit increased to US$66.87m, up from US$1.75m.

However, revenue declined 10.2% to US$247.8 million due to lower feed selling prices on the back of the markedly lower maize prices following the record local maize crop for the 2017/2018 marketing year, says IOL.

“Individual quick frozen chicken (IQF) market volumes increased due to a gain in market share and the average daily weight gain for chickens continues to increase. Broiler production performance positive with higher efficiency factors,” said Ron Klipin, a senior analyst at Cratos Capital.

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