Profits plunge for Astral Foods in South Africa

21-09-2020 | | |
South Africa s Astral Foods  profits have plunged 55%. Photo: Astral Foods
South Africa s Astral Foods profits have plunged 55%. Photo: Astral Foods

South Africa’s poultry and animal feed producer, Astral Foods, has announced that its profits have plunged 55% after higher feed costs hit its poultry division.

Earnings per share for Astral Foods’ financial year ending 30 September 2020 stood at R16.59 (US$ 1.02) compared to R36.91 (US$ 2.26) a year earlier, reports Reuters.

A weak economy, high raw material prices, and poultry imports from Brazil and the US are all factors that have contributed to this negative outlook. Astral’s view on the near-term prospects are “a mixed bag”, noted the company, adding that the expansion of its poultry production capacity would have a positive effect.

South Africa launches poultry masterplan
The introduction of a new poultry sector masterplan in the country aims to stimulate local demand, boost exports and protect the domestic chicken industry.

Poultry division hit

The company’s poultry division reported an increase in sales, however, expenses – mainly in the form of a 7.7% increase in the price of feed – dragged operating profits down by 74.5% to R371 million (US$ 22.7 million).

Feed division reap rewards

Astral’s feed division, however, benefited from an increase in the price of raw material, boosting revenues by 6.1%, contributing to a 7.2% rise in operating profits.

Profits for continent fell over 30%

Profits in its division covering the rest of the continent fell by over 30%, as feed costs rocketed in Zambia due to drought and crop failure. Astral also took a provision for taxes owed by the Mozambican government which it does not expect to recover.

Natalie Kinsley Freelance journalist