South Africa's Astral foods gains 12% in the interim dividend for the period ending March 2010 after enduring a tough 6 months, especially on the poultry side, dropping 4% turnover to ZAR4.3 billion (US$0.55 billion).

Astral Foods CEO Chris Schutte noted the company only experienced the impact of the downturn in the local economy during the festive season. "For the first time in five years, our traditional consumer did not benefit from bonus payments," Schutte said.

Management, though, built up the trading margin to just over 7%, allowing operating profits to edge up 9% to ZAR304 million (US$39.46 million). Schutte was pleased with Astral's overall operating profit margin improving, an exceptional achievement, he reckoned, in the light of the competitive environment. With finance costs slashed, Astral showed a heartening 16% jump in after-tax profits to ZAR189 million (US$ 24.53 million).

On a divisional basis, it was the resurgent feeds division that offset a weaker performance from the larger poultry division. Although revenue was up 3%, the poultry division reported operating profits down 2% to ZAR134 million (US$17.39 million).

On the poultry side, Schutte said depressed consumer spending over the December festive period - exacerbated by higher levels of poultry product imports from Brazil and Argentina - resulted in unprecedented high poultry stock holdings across the entire poultry market.

The feeds division turned a 10% decline in top-line into a 10% gain at operating profit to ZAR151 million (US$19.59 million). Schutte said the improved operating profit and margin in the feeds division was achieved through higher sales volumes and better capacity utilisation.

The continued favourable grain and agricultural commodity prices were set to benefit chicken production costs.

Although any recovery in the consumer spending would lead to a higher demand for poultry products, he cautioned that the strength of the rand could boost chicken import levels.