Johannesburg - Astral Foods Limited [JSE:ARL]) on Wednesday said it recorded its
worst trading performance in its history as a listed
entity over the first quarter of the 2013 financial
year-end. This period included the 2012 festive season.
The news sent the stock down more than 7% on the JSE to its lowest level in three months. The stock last traded hands down 7.07% at R94.05.
South Africa's leading poultry producers said in a trading statement its operating profit for the first quarter ended December 31 2012, was 60% lower than the corresponding
Astral's CEO Chris Schutte
said the company indicated during its 2012 year-end results road show that it was expecting poor trading conditions
to prevail for the first half of the 2013 financial year-end.
"Unfortunately, the trading conditions during the
first quarter of the 2013 financial year were more severe
"Indications are that the second quarter
performance will be much worse than the first quarter and
as a result, Astral's results for the six months ending
31 March 2013 will be severely impacted."
The factors that negatively influenced Astral's Poultry
Division over the first quarter of 2013, and set to
continue over the second quarter of 2013, include the
high input costs relating to maize and soya procured at
historic record price levels and only now being reflected
in the production cost of poultry.
The Poultry Division's
ability to recover the high input costs in a depressed
consumer environment was severely hampered by record
poultry imports from Brazil and Europe, and subsequent
high local poultry stocks led to excessive margin
pressure over the same period.
Astral's Feed and other
African Divisions continue to report good performances.
Astral has a reasonable degree of certainty, considering
the current market environment, that earnings per share
and headline earnings per share for the six months ending March 31 2013 will be down between 45% and 65% and 75%
and 95% respectively, versus the six months ended 31
Astral also said that its operations were severely affected by violent strike action in the Western Cape and Gauteng between November 2012 and January 2013.
"As a result of
this action, Astral experienced one fatality, six farms
were affected by vandalism and three poultry sheds were
burnt down by the strikers, in the process killing
approximately 65 000 chickens.
"The damage to the poultry
assets and resultant impact on production could lead to
jobs being cut," the group warned.
The direct costs of the strikes are
estimated to be in excess of R35m. Operations in
both regions are back to normal.
In light of the severe drop in forecast headline earnings
the likelihood of payment of an interim dividend is
uncertain, the group said.
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