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.
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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).
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 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.