Astral rewards shareholders generously
By Andries Mahlangu - May 14th 2018, 13:33
Poultry producer Astral Foods rewarded its shareholders handsomely, as the cycle in the industry turned in its favour, boosting its earnings markedly in the six months to end-March.
The company declared an interim dividend of R10 per share, which was nearly six times higher than the R1.80 shareholders received a year ago.
The generous dividend payout came as headline earnings per share (HEPS) rose 455% to R19.74, as the company reaped the benefits of low input costs, and higher sales volumes and poultry selling prices.
In the matching period a year ago‚ Astral encountered abnormally high feed costs‚ which did not occur in the current period.
"Astral benefited significantly from the favourable trading conditions during this reporting period, in comparison to a period that saw one of the lowest profits in Astral’s history," CEO Chris Schutte said in the company’s results statement.
Group revenue was up 15% to R6.7bn as a result of improved poultry supply and demand balance, which the company said gave it both volume and price support.
Group operating profit surged 392.6% to R1.044bn, as the poultry division improved markedly, fattening the operating margin to 15.7% from just 3.7%.
Revenue for the feed segment was down 10.2% to R3.1bn, courtesy of lower feed selling prices that resulted from lower maize prices after SA harvested a record maize crop in 2017.
But sales volumes in the feed segment still rose due to higher external sales and a higher internal feed requirement, according to the results statement.
Higher external sales volumes (7.4%) referred to livestock sectors that recovered following the high feed costs associated with the 2016 drought, the company said.
Internal sales increased (7.2%) due to a higher internal feed requirement as broiler placement numbers increased year on year.
This led to operating profit increasing 3.8% to R192m in the feed segment, which helped push the operating margin to 6.2% from 5.3%.
Astral competes with RCL Foods, although the latter company has a diversified portfolio.
Before the recovery, the poultry industry had a particularly rough ride due to the drought that resulted in higher grain prices, which in turn resulted in higher input costs.
© BusinessLIVE MMXVIII
SA poultry industry wants hefty increase in tariffs to protect local industry
17/01/2019 - 13:20
The South African poultry industry has defended its application for a hike in import tariffs of frozen chicken portions to 82%, saying the cheap chicken imports mainly from Brazil hurt the competitiveness of local producers.
Woolworths pies, first SA food products with sustainable palm oil certification
27/11/2018 - 10:06
Woolworths pies are the first South African food products to be certified by the Roundtable on Sustainable Palm Oil (RSPO) https://rspo.org/
Growing import demand contributes to expanding logistics and warehousing sector
16/11/2018 - 11:05
The inflow of imports, most consumer goods, is contributing to increasing demand for storage, logistics and warehousing services in South Africa, and a clear correlation is visible in the trend of wholesale and retail trade sales in comparison to imports.
SA table grape industry returns to normal crop
13/09/2018 - 08:16
Good winter rains to date have largely broken the severe drought in the Western Cape. This positive outlook, linked to new plantings and new cultivars, brings the South African table grape industry back onto its positive growth curve.
CEOs: Your marketing teams are missing a trick, and it’s hurting your bottom line
03/08/2018 - 10:25
Anyone who’s ever worked in advertising has heard this saying by 19th Century US businessman John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” In the nearly one hundred years since Wanamaker died, the advertising landscape has changed dramatically. One thing that hasn’t changed, however, is that vast amounts of money spent on advertising and marketing are wasted.