Advertise with fastmoving.co.za
 
 

The chicken feed and egg producer expects headline earnings per share in the year to September to rise by up to 85%, benefiting from lower input costs.
The chicken feed and egg producer expects headline earnings per share in the year to September to rise by up to 85%, benefiting from lower input costs.

Quantum Foods reaps benefits of low input costs

RETAILER NEWS

By Andries Mahlangu - Oct 19th 2017, 13:41

Quantum Foods shares surged as much as 18% on Thursday, after issuing a trading update stating they expect a much improved financial performance. 

The chicken feed and egg producer expects headline earnings per share in the year to September to rise by up to 85%, benefiting from lower input costs.

The trading update helped soothe market concerns about avian flu, which hit some of its hen houses in the Western Cape. The company said it took a R30m charge for the layer hens destroyed and associated clean-up costs.

Quantum Foods, along with other poultry producers, are benefiting from the lower maize and soya prices, which are as a result of a better harvest. South African farmers are expected to harvest a record 16.4-million tonnes of maize in 2017.

"With feed costs making up 53% of a bird’s production cost, the decline in these key inputs has had a material effect on broiler production costs," Vunani Securities analyst Anthony Clark said in an e-mail note. Quantum Foods said lower feed costs, coupled with higher selling prices, improved its egg business.

Increased external sales volumes from its feed business, as well as improved trading conditions in other African operations, contributed to the overall enhanced financial performance.

At 11.15am, Quantum shares were up 13.49% to R3.28 on the JSE, giving the company a market value of R7.29m.
© BusinessLIVE MMXVII 

Read more about: shares | quantum foods | avian influenza

Related News

Kraft Heinz reined in costs and increased prices — and it worked
05/11/2019 - 11:28
Kraft Heinz beat analyst expectations for third-quarter profit on Thursday as the packaged food company reined in costs and increased prices in the face of slowing demand for some of its key brands.

Shoprite shares in dramatic U-turn after update
05/11/2019 - 09:04
Shoprite’s share price jumped by 6% in opening trading on Monday after the group reported turnover growth of more than 7% in the three months to September. But by later afternoon, its share price was down almost a percent.

First profit increase in two years for H&M
03/10/2019 - 12:59
H&M posted its first rise in quarterly pretax profit in more than two years on Thursday as the world's second-biggest fashion retailer said its drive to meet rapid changes in the market was on track.

Brian Joffe’s Long4Life warns of lower half-year earnings
20/08/2019 - 12:59
Brian Joffe’s Long4Life says half-year earnings will probably fall partly because of lower trading profits from Chill Beverages, which makes the Fitch & Leedes drinks brand.

Shoprite earnings take knock on non-SA operations
20/08/2019 - 10:39
Shoprite’s shares fell to their worst level in more than three years after Africa’s largest food retailer reported a 20% drop in earnings and said it saw no immediate prospects of its troublesome non-SA operations returning to profitability.