SOUTH AFRICA – Astral Foods Limited, South Africa’s leading integrated poultry producer, expects its earnings a share for the six months ended March 31, to increase by between 140% and 150% year-on-year.

In a trading statement, the company says this implies that earnings a share are likely to be between R14.21 and R14.80, compared with the R5.92 a share reported for the six months to March 31, 2021.

Further, headline earnings a share are expected to increase by between 130% and 140% to between R13.73 and R14.33, compared with the R5.97 reported for the prior comparable period.

The improved earnings were achieved mainly through increased poultry sales volumes, as a result of significant capital investments made to increase Astral’s poultry production and processing capacity, resulting in improved economies of scale benefits throughout the group’s integrated value chain.

Also, it was supported by efficiency improvements through the broiler value chain as well as the partial recouping of higher feed raw materials and energy input costs.

“The above earnings growth is measured against a low base impacted by Covid-19-related lockdowns adversely affecting the South African economy.

“At the time, Astral Foods’ poultry operations could not recover the then significant increases in feed costs through the selling price of poultry products,” the company says.

Previous period’s earnings took a hit

In the previous comparative period, the JSE-listed poultry producer, reported a 7% rise in half year revenue to R7.5 billion (US$535.5m) despite the tough operating environment.

This was achieved through a combination of increased broiler sales volumes and a below inflationary increase in selling prices.

However, the company’s profit line took a hit as its operating profit declined by 37% to R345 million (US$24m).

Headline earnings per share were down by the same margin – that is by 37%, coming in at 597 cents a share, hurt by imports and high feed input costs.

According to the group, the price of broiler feed shot by 17 percent on a rand a ton basis because of high raw material costs.

Meanwhile, poultry imports remained high during the period, with average monthly poultry imports equalling about 26 percent of local consumption, at an average of 39 705 tons a month.

Astral Foods turned to profitability in full year

Despite the gloomy start of the year, the company reported a 13.9% rise in revenue in the full year ended 30 September 2021 to R15.9 billion (US$1.04 billion), an increase from prior year’s R13.9 billion (US$912m).

Revenue from the poultry division increased by 15.3% to R13.1 billion (US$860m), supported by higher sales volumes and a recovery in broiler sales realisations, together with improved sales of broiler parent stock into the external market by Ross Poultry Breeders.

Meanwhile revenue from its feed division increased by 18.9% to R8.3 billion (US$545m) as a direct result of higher selling prices on the back of the increase in raw material costs.

However, revenue from continued operations of other African markets decreased by 6.7% to R289 million (US$18.98m).

Still its profit measure took a hit reporting 15% decline in Headline Earning Per share.

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