SOUTH AFRICA – Astral Foods on Monday reported a 52.3% drop in net profit to R372.16m in the year to end-September from the year-earlier period.
The poultry producer is still reeling from the after-effects of the drought that earlier this year severely cut food production, forcing the country to import some food stocks, including maize and poultry.
Group revenue was up 6.1% to R12bn, but operating profit slid 50.1% to R549m from R1.1bn, predominantly as a result of the significant downturn in the poultry division.
Profit in the poultry segment was down 91.1% to R59m, with net operating profit margin dropping to 0.7% from 7.6%.
The disappointing performance came as feed prices increased 17.4% per tonne of poultry feed year on year due to the drought while average selling prices were down 0.6%
Revenue for the feed division was up 15.3% from R6.2bn to R7.2bn as a direct result of the higher average selling price for feed.
“Last year we posted record results, however, we have seen deterioration in profitability following the most challenging economic and trading conditions in the history of the industry,” CEO Chris Schutte said in a statement.
“The impact of the severe drought gripping the country and the imbalance in supply and demand of poultry, caused by excessive levels of imports, placed tremendous pressure on the poultry division’s results.”
The company slashed the final dividend to 100c per share, from 575c, bringing the total to R4.90c, which was down 57.4% on last year.