The group’s headline earnings per share decreased from 56.6 cents in 2012 to 38 cents in 2013 while earnings per share also dropped 50.3 per cent from 58.3 cents in 2012 to 29 cents in 2013.
“The main drivers for these results were the poor performance of the group’s protein division and the Australian operations as well as an impairment of 22 million rand on trade and other receivables, due to the outcome of legal arbitration on a dispute with a debtor subsequent to year end,” AFGRI said in a statement.
“Significant headline earnings adjustments include the profit recorded on the merger of the groups retail business with Senwes of 110.2 million rand, which was offset by the impairments of 139 million rand relating to the poultry and Australian business units.”
[DATA AFR:AFGRI] is comprised of its grain management, retail and equipment divisions as well as its Australian and Zambian subsidiaries.
“The dynamic surrounding AFGRI Poultry remains of great concern with the industry facing challenges of crisis proportion. The sector has been adversely affected by massive imports of poultry products from Latin America and the European Union,” the group had said.
“Consequently, decisive and effective government tariff protection against poultry dumping is imperative if the sector is to avoid a calamity,” it added.
AFGRI reported a 229.2 million rand loss before taxation in its poultry division, after impairing 116.8 million rand amid a distressed industry.
Operating profit also decreased from 563 million rand in 2012 to 285 million rand in 2013 and other operating income was down from 14 million rand to 13 million rand.
However, the group’s total revenue increased from 7.5 billion rand in 2012 to 8.5 billion rand in 2013 partly due to the impact of the weaker rand on the translation of the revenue of the group’s foreign operations.
The impact of the acquisition of the Nigerian business and the inclusion of both AFGRI Equipment in Zimbabwe and AFGRI Milling for a full year also contributed to the increase.
“AFGRIs agri business prospects for the foreseeable future remain positive. A record summer crop, receiving 3.5 million tons into our storage facilities between March and August coupled with enhanced product diversification is gaining traction and extending our grain management expertise across the continent,” the group said.
“An increased presence in Africa will benefit the equipment business unit as well as collateral management. The crystallisation of synergies in the retail transaction with Senwes should contribute positively to the group.”