Estimated reading time: 4 minutes
The integrated poultry producer Astral Foods’ financial results for the year ending 30 September have shown a significant improvement on all fronts. Revenue increased by 10% to R22,6 billion (2024: R20,5 billion); operating profit increased by 11% to over R1,2 billion (2024: R1,12 billion), and headline earnings per share increased by 14% to 2 193 cents.
Overall, the listed company currently has a cash position of over one billion rand and a total dividend of R11 per share was declared on 17 November. That is a dividend per share increase of 112%.
Poultry division
Revenue for the poultry division increased by 10,3% to R18,8 billion (2024: R17,1 billion), mainly due to higher broiler sales volumes. Poultry sales realisations improved marginally by 2,4% over the comparable period, following an extended period of selling price deflation.
The company’s broiler slaughter volumes increased to an average of 5,8 million birds per week (2024: 5,4 million birds per week). Sales volumes increased by 7,9% (equivalent to 38 749 tonnes) for the year, on the back of sales out of stock and increased production.
Gary Arnold, CEO of Astral Foods, said during a press conference that South Africa’s supply and demand levels for poultry meat were in balance and that they (Astral) were not currently building up stock. “Overall, we are very well positioned for the coming festive season with supply increasing a little bit from December.”
However, going into the new year, the situation remains uncertain. “Spending always declines during the new year as people have commitments such as school fees and still have a ‘spending hangover’ after the festive season,” Arnold explained.
While it is not a major concern, Arnold added that there is currently poultry meat being shipped to South Africa from Brazil. “We’ll have to see what the impact of that will be on the market once it arrives. But a lot of meat that’s imported from Brazil is mechanically deboned meat, so it is not something that we produce on a large scale locally.”
Operating profit for this division amounted to R533,6 million (2024: R580,4 million). However, the previous year’s results included insurance proceeds of R230,7 million in this division, indicating an underlying improvement in operational performance of 52,6% for the current year.
Arnold said while highly pathogenic avian influenza remains a concern, Astral has made great strides in mitigating risk. Several of its parent stock farms have received the green light to vaccinate against the disease, which means around 30% of its parent stock can be vaccinated against the disease that specifically affects laying hens.
However, Astral will never vaccinate its entire flock, as this will jeopardise the company’s ability to export poultry products in future, Arnold added. “We also don’t support blanket vaccinations, because by using vaccines carelessly, one could unwittingly spread the disease even quicker,” Arnold said.
Feed division
Revenue for Astral’s Feed Division increased by 9,8% to R10,8 billion (2024: R9,8 billion), as a result of higher sales volumes and increased feed prices, reflecting higher raw material costs. SAFEX yellow maize prices increased to an average of R4 552 per tonne (2024: R3 992 per tonne) for the year under review, up by R560 per tonne year-on-year. Soya meal prices decreased to R7 507 per tonne (2024: R9 836 per tonne).
Total feed sales increased by 7%, driven by an increase in the internal requirement for poultry feed at 8,1% (62 507 tonnes). External feed sales volumes increased by 5,6% (30 632 tonnes), mainly from higher demand in the external poultry and pig livestock sectors. The operating profit for this division increased by 31,1% to R713,8 million (2024: R544,5 million), with the operating profit margin increasing from 5,5% to 6,6%. Operating expenses in the division were well controlled during the year under review.
On the back of a good production season and a positive outlook for the coming season, Arnold said this bodes well for the company overall. “It is early days yet, but thus far the signs indicate that we will see another good season for grain and oilseed farmers. This indicates that feed prices will be to the benefit of poultry production.” – Susan Marais, Plaas Media
