Astral fares well despite rough poultry industry conditions - CNBC Africa

Astral fares well despite rough poultry industry conditions

Earnings

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Free range chickens. PHOTO: Getty Images.

Group revenue for the year ended 30 September 2013 increased 4 per cent to 8.5 billion rand from 8.2 billion rand for the year ended 30 September 2012.

Operating profit however took a dip from 477 million rand in Sep 2012 to 272 million rand. The operating margin also dropped to a low of 3.2 per cent from 5.8 per cent in the previous comparative year.

[DATA ARL:Astral] is a South African poultry producer whose operations include Earlybird, Country Fair, National Chicks and Ross Poultry Breeders.

“We were expecting these depressed conditions for the poultry industry for the period under review; however we were anticipating some assistance from Government in revising import tariffs in order to level the playing field,” Astral CEO Chris Schutte said in a press statement.

Poultry tariffs were recently implemented in South Africa to protect the industry from import dumping. The tariff has however significantly raised the price of poultry.

Asral’s poultry division reported a 3 per cent increase in revenue from 5.8 billion rand to 6 billion rand, which was on the back of an 8.4 per cent improvement in poultry selling prices.

The poultry division also reported an operating loss of 109 million rand from 137 million rand operating profit in the previous year.

The group’s feed division recorded a 14 per cent increase in revenue of to 4.9 billion rand from 4.3 billion rand as a result of higher feed prices on the back of higher maize and soya pricing levels.

The feed division’s operating profit increased by 15 per cent to 331 million rand from 289 million rand.  This was as a result of the division being able to successfully recover inflationary costs from the market.

The group’s Other Africa operations delivered revenue growth of 30 per cent to 442 million rand from 341 million rand in the previous comparative year.

“The recently approved increase in the General Rate of Duty on poultry imports will go some way in levelling the playing field on a cost basis,” said Schutte.

“An anti-dumping application against the EU, if successful, will improve the imbalance in supply and demand, which could provide the industry a better opportunity to recover escalating input costs.”

Net finance costs for the group increased by 50 per cent to 27 million rand from 18 million rand in the previous comparative year, which was attributed to the higher average level of borrowings.

“Although the tough trading environment is not expected to ease in the new financial period, there are a number of positives impacting our results,” Schutte explained. 

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