Photo by: Reuters
JSE-listed integrated poultry producer Astral Foods expects to report an 87% to 92% decrease in headline earnings per share (HEPs) for the six months ended March 31.
The company advises that HEPS will likely be between R1.14 and R1.85, compared with HEPS of R14.20 reported for the six months ended March 31, 2022.
The group will release its results on or about May 22.
It cites challenging market conditions, including record high feed input costs, persistent loadshedding and the general decay of municipal infrastructure, which impacts on Astral’s operational efficiencies and costs, as the reason for the earnings decline.
For example, as a result of loadshedding, Astral had to cut back on production of at least 12-million broiler placements in the first half of this year. In turn, the backlog in the broiler slaughter programme has resulted in older and heavier birds consuming high levels of feed.
In the interim period under review, Astral was not able to recover high feed input costs and the impact of loadshedding through selling price increases and, therefore, subsidised the increased cost of production to its customer base and consumers.
The cost to produce chicken exceeded the selling price by at least R2/kg in the period.
Astral expects its poultry division to incur significant losses for the first half of the financial year.