South African poultry farming and processing group Sovereign Food
reported an 11% increase in turnover for the six months to August.
The group said the increase in turnover was driven by a 17% increase in volumes over the prior comparable period, while its operating margin for the period improved to 18.7% from 17.2%.
Sovereign said the average poultry price decreased 6% during the six-month period, while the average spot price of yellow maize increased 83% as the lower maize crop put upward pressure on national maize prices.
The results include a hedging profit of R4.6 million (1 rand = 0.10 euro) for the period under review.
Sovereign said higher than expected imports in the first half of the year led to a decline in poultry pricing, but the recent depreciation of the rand has since rectified the situation. The volume increase experienced in the first half are expected to be maintained into the second half.
While national supply and demand are currently balanced, there is concern about potential industry oversupply next year.