Astral Foods reports profit

Nov 14 2011 15:34
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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Integrated poultry producer Astral Foods [JSE:ARL] on Monday reported a 19% rise in diluted headline earnings per share from 959c to 1 145c for the year ended September  30 2011.

The group's operating profit went up 15% to R674.9m. This was achieved on the back of 3% revenue growth ito R8.6bn.

The group declared a final dividend of 505c per share, which resulted in total dividend of 810c per share - a 7% improvement in both cases.

Revenue from the poultry division was up by 4.6% to R5.6bn (2010: R5.4bn) on the back of marginally higher volumes (up 0.9%), and pricing levels improving by 4.1%.

"This past year witnessed tough market and trading conditions with a strong rand driving opportunistic imports of poultry meat. The 'classic dumping' of chicken primarily from Brazil, together with the higher import levels placed pressure on the ability to move prices in line with cost increases and inflationary trends," the group said.

The increase in profitability was derived mainly from improvements in production costs as a result of lower feeding costs together with a marginal improvement in selling prices, it added.

Revenue from the feed division decreased marginally by 0.3% to R4.21bn (2010: R4.22bn) due to lower internal sales volumes (down 1.7%) as a direct result of the improvement in feed conversion with the "new" Ross 308 breed and reduced sales in the dairy sector.

The operating profit rose by 0.4% to R282m (2010: R281m), supported by a significant turnaround in the performance of the Zambian and Mozambican operations.

Revenue from the services and joint ventures division increased by 2.3% to R276m (2010: R270m). Profitability fell by 6.1% to R39.4m (2010: R42m) and was impacted by the non-recovery of overhead costs due to low capacity utilisation in the new East Balt bakery in Cape Town.

Excluded from the results for the period is the profit contribution from Meaders Feeds, a Mauritian operation which was disposed of earlier in the financial year.

Looking ahead, Astral Foods said that in view of the prevailing uncertainty that existed in the market, the following factors were relevant to its business:

"On the negative side, a significant increase in the feeding cost of poultry on the back of record high raw material input costs, together with current levels of poultry meat imports. It is also anticipated that there will be limited economic recovery with no significant change to employment levels.

"On the positive side however, we note manageable poultry stock levels and a possibility for success in the industry's application for anti-dumping tariffs. It is envisaged that there will be upward potential from current poultry price levels."
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