Astral Foods, the largest integrated poultry producer in South Africa, said yesterday that it expects a drop in profits in its interim results.
In a trading update, Astral said it now has reasonable certainty that both earnings per share and headline earnings per share for the six months ended March 31, 2023, are expected to decrease by between 87% and 92%.
Earnings per share is expected to drop between 189c and 116c, and headline earnings per share by between 185c and 114c, compared to the six months ended March 31, 2022.
The group, which is operating in the ailing poultry sector, had warned the market in its voluntary trading update released on January 25, 2023, that it expected market conditions to deteriorate.
At the time, the group said that feed input costs, which make up about 70% of the costs of producing a broiler chicken, increased in the first quarter of the year, with yellow maize reaching R5 300 per ton on the domestic Safex commodity market.
The group said its feed division successfully managed to limit the impact of load shedding by utilising available spare capacity among its various feed mills, however, at an additional cost. Future capital expenditure has been committed to negating further risk.
As a result of load shedding negatively affecting the Poultry division, substantially higher internal feed volumes were required, it said at the time.
By 4.50pm its share price was up 0.29% at R170.79, having hit a low of R154.58 in morning trade after the announcement.
BUSINESS REPORT