South African poultry producer Astral Foods Limited announced profit increases in their interim results for the six months ended 31 March 2015 compared to a similar period in 2014.
Chris Schutte, CEO of Astral, stated: “The robust performance is attributable to a number of factors, including an increase in poultry sales volumes and realisations, good poultry production efficiencies, an expansion in feed volumes with the incorporation of the company’s new Standerton feed mill, all underpinned by lower feed costs.”
Group revenue for the reporting period increased by 22 per cent, and operating profit increased by 158 per cent in the comparable period predominantly as a result of the significant turnaround in the Poultry division.
The Group’s operating profit margin improved to a more normalised level of 9.6 per cent from 4.5 per cent.
Astral’s statement suggested that the Poultry division benefited from volume growth that was achieved through additional sales as a result of the Tydstroom broiler volumes now incorporated into Astral’s Western Cape broiler operation.
They also thought that an additional volume benefit was also realised from both on farm production efficiencies through an improved mortality rate and increased bird placements against cutbacks in the comparable reporting period.
Feed prices decreased by 2.3 per cent during the same period and together with the revenue growth, the division’s profitability improved substantially.
The Feed division reported an improvement in revenue due to increased volumes of 17.2 per cent.
The volume growth was due to the addition of feed volumes previously supplied by Afgri Kinross now manufactured in the new Standerton feed mill, as well as the increase in in-house broiler placements.
The operating profit increased by 18 per cent, and the Other Africa operations reported revenue growth of 3 per cent, mainly as a result of higher day old chick sales over the comparable period with the completion of the expansion projects in Zambia and Mozambique.
Operating profit growth of 24 per cent was negatively impacted by currency exchange movements increasing raw material input costs in both these two countries.
Daan Ferreira, Astral’s Group Financial Director, commented: “Astral’s net finance cost at 10,1 million rand (R) was lower than the comparable period following a positive cash flow. The Group reported a net surplus cash position of R240 million, net of long-term financing.”
(Source – http://www.blackseagrain.net/novosti/southern-african-poultry-producer-astral-sees-profits-rise)