Astral Foods’ revenue increase by 13.9% driven by volume growth in home operations

SOUTH AFRICA – Astral Foods Limited (Astral), South Africa’s leading integrated poultry producer has 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).

Its poultry division contributed 81%, feed division 17% and other Africa division 2% to total external revenue.

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.

Broiler slaughter volumes increased by 4.8% benefiting from the Festive expansion volumes with sales volumes increasing by 6.4% for the year under review to 28 832 tons.

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The higher sales volumes were as a results of deep cut promotional activity by retailers. Volumes in the Quick Service Restaurant (QSR) and fresh sales categories for Astral, recovered to pre Covid-19 levels. This positively impacted product mix and led to a better-balanced sales basket.

Along with the rest of the country, Astral was shocked by the levels of violence, looting and subsequent losses to businesses in the supply chain during the unrest experienced in KwaZulu-Natal and Gauteng.

“Astral’s customers have shown extreme resilience, with many having recovered from this event with no long-term trading repercussions,” highlighted the company.

Broiler sales realisations recovered by 8.1%, reflecting an effort to recoup the significant increase in feed prices on the back of higher maize and soya meal costs for the year under review.

Operating profit for the poultry division decreased by 50.3% to R147 million (US$9.65m).

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.

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Feed sales volumes increased by 2.0%, as the internal requirement for broiler feed increased by 6.0% due to the strategic expansion in production, but with lower external sales volumes of 3.6% reported due to a decrease in feed sales across all sectors as livestock markets came under pressure from higher feed prices.

The operating profit for this division increased by 4.2% to R530 million (US$34.8m), with a decrease in the operating profit margin to 6.4%.

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

Whilst selling prices increased for the year under review, feed sales volumes were under pressure, with the improved results driven by a much-improved performance from the Zambian operations. Operating profit from continued operations increased to R35 million.

The National Chicks Swaziland and Mozambican operations have been reported as discontinued operations, following approaches by prospective buyers with firm offers to acquire Astral’s interests.

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