Astral’s poultry profit: From R1.3bn loss to R580m gain

Group will pay a dividend.

JSE-listed Astral Foods saw a three-digit jump in profit for the year ended 30 September 2024, driven by a strong recovery in broiler volumes and the ease of load shedding.

In a Sens statement published on Monday, the group says its poultry division reported a 142% rise in operating profit to R580 million, compared to a loss of R1.3 billion in the corresponding period in 2023.

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Astral’s share price firmed by 2.31% to R170 at around 11:30 on Monday. The group’s share price has risen by over 16% in the past year.

Revenue was up by 7.7% to R17.1 billion (2023: R15.8 billion), driven by an increase in broiler sales volumes and an improvement in broiler sales.

“During 2023, the demand for Astral’s poultry products slowed on a change in the product basket, given the impact of load shedding disrupting the poultry processing operations and subsequent sales mix at the time. However, this improved in 2024 as the product basket normalised,” the group notes.

A final dividend of 520 cents per ordinary share is payable. The group did not pay a dividend in 2023.

Read: Astral recovers after bird flu outbreak

The group notes its net working capital increased by R222 million over the reporting period, mainly due to the repopulation programme of broiler breeders following the bird flu pandemic of 2023 (increasing by R203 million). Lower inventory levels generated a cash inflow of R374 million, supporting the balance sheet rebuild.

However, Astral’s feed division recorded a 15.2% revenue drop to R9.8 billion (2023: R11.6 billion) due to lower feed selling prices, a decrease in raw material costs, and lower internal feed sales volumes. The operating profit for this division decreased by 28.3% to R545 million (2023: R759 million).

Bird flu remains a risk

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Looking forward, the group notes that bird flu remains a major risk to the local poultry industry, and progress has been slow towards approval for the vaccination of broiler breeding stock.

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South Africa’s poultry industry lost approximately R9.5 billion in 2023 due to the disease.

Other risk factors include water supply disruptions, constrained consumer spending, and a competitive retail landscape.

On the positive side, the formation of a government of national unity (GNU) may stabilise the economy and support much-needed investment and growth, the group notes. It also expects interest rates and the two-pot retirement reforms to boost consumer spending.

In addition, a developing La Niña weather system, which typically means above-average rainfall across South Africa, is predicted, which creates favourable prospects for the local maize crop currently being planted.

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