November 20, 2019

South Africa poultry producer Astral Foods reports lower profits due to drought

The company, which also produces livestock feed, reported 55% lower full-year profits as increased feed costs because of the drought have affected its poultry division, reported Reuters.

In addition to the drought, Astral Foods cited higher poultry imports from the United States and Brazil, costly raw material prices and a poor economy for its headline earnings per share (HEPS) drop – to 16.59 ZAR (~US$1.12; 1 ZAR = US$0.068) from 36.91 ZAR (~US$2.50) in 2018.

Even though poultry sales went up, operating profits fell 74.5% to 371 million ZAR (~US$25.1 million) because of a 7.7% increase in poultry feed costs. 

To improve its poultry division, Astral Foods is planning to expand its poultry production volume.

For its feed division, the company reported a 6.1% increase in revenue due to raw material prices going up, even though volumes were lower. This contributed to a 7.2% operating profits increase.

- Reuters