SOUTH AFRICA – South Africa’s poultry, eggs and animal feeds producer Quantum Foods expects headline earnings for the year to end 30 September to increase by at least 219%, boosted by steady earnings from the eggs category, reports Moneyweb.
Headline earnings per share would increase to 156.3 cents per share compared with 49 cents per share in the corresponding period of the previous year.
The company said earnings were lifted by steady revenue in its eggs business, an insurance compensation of US$1.5 million for losses incurred from the Avian flu outbreak last year and better performance by its units in other African countries such as Uganda and Zambia.
The outbreak of avian flu in South Africa in June last year was blamed for US$3.09 billion losses in the local poultry industry as the country was forced to rely on imported chickens to meet the demand for egg and chicken production.
Though the eggs business reported high levels of profitability, margins declined with an increase in feed costs and a decline in egg prices.
Earnings were also impacted by slightly weaker margins in the feeds and broiler farming businesses.
“Shareholders are advised that no further incidents of Avian Influenza have been experienced,” said the firm in a trading statement.
“Shareholders are reminded that an outbreak of Avian Influenza before the end of the reporting period could have a significant impact on the expected HEPS and EPS reflected in this trading statement.”
Good performance from its egg division saw net cash flow from operating activities surging to US$13.73 million in the first half of the year ended March, prompting the first half-yearly payout to shareholders.
The year could have been impacted by raw material price increases especially in the egg business and higher input costs from maize and soybean meal prices.
Quantum Foods is the largest storage property owner in SA and as much as 70% of its US$336.52 million portfolio is local, with the remainder in the UK.