The group, which reported results for the six months ended 31 March 2014, however added that slow economic growth and industrial action will continue impacting the industry’s profit margins, [DATA ARL:Astral Foods Limited] has said.
Revenue increased by 11 per cent to 4.6 million rand from 4.2 million rand in for the same comparative period in 2013.
The group’s operating profit for the period under review increased to 212.9 million rand from the 59.1 million rand in the previous year.
Profit before interest and tax was recorded at 212.9 million rand for the period under review from 105.7 million rand.
Astral Foods is a South African poultry producer that also supplies broiler genetics, animal feed and the production and sale of chicken.
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“The improvement in cash flows from operating activities, at an inflow of 293.3 million rand from the previous year's inflow of 18.2 million rand, follows the improvement in profits together with an inflow of 58 million rand from changes in working capital,” the group explained.
“Capital expenditure at 149.5 million rand was higher than the previous year due to the ongoing expenditure on the new feed mill. An amount of 52 million rand was drawn down on the feed mill project during the period under review.”
An interim dividend of 200 cents per share was declared.
Revenue for Astral Foods’ poultry division was up by 12.3 per cent to 3.3 million rand from 2.9 million rand in 2012. Sales realisations increased by 5.9 per cent for the period under review.
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Revenue for the feed division increased by six per cent to R2.5 million rand from 2.3 million rand, as a result of higher sales volumes, which increased by 4.1 per cent due to a higher inter-group requirement for poultry feed.
Revenue for the group’s other Africa division increased by 22.1 per cent to 248 million rand from 203 million rand in 2013, as a result of higher day old chick sales with the completion of the expansion project in Zambia.
“The slowing level of growth in the economy and higher unemployment levels will continue to depress consumer spending. This, coupled with other factors like industrial action in the mining sector, will continue to impact profit margins in the industry,” Astral Foods explained.
“There will be a good maize crop in South Africa with an expected softening in grain prices in the coming six months off the highs of the past reporting period. This will benefit feed prices and broiler production costs.”