Advertise with fastmoving.co.za
 
 

 Astral Foods, SA’s largest poultry producer, said that rising feed costs and disappointing consumer spending patterns would crop its earnings in the year to end June.
Astral Foods, SA’s largest poultry producer, said that rising feed costs and disappointing consumer spending patterns would crop its earnings in the year to end June.

Rising feed costs clip Astral’s wings

RETAILER NEWS

By Karl Gernetzky - Oct 11th, 09:06

Astral Foods, SA’s largest poultry producer, said that rising feed costs and disappointing consumer spending patterns would crop its earnings in the year to end June. 

Headline earnings per share (HEPS) were expected to be not more than 60% down on the prior comparative period, the company said, having experienced higher maize prices due to the smaller crop in its 2019 year.

This, together with depressed selling prices, has put significant pressure on profit margins, the company said.

“Disappointing consumer spending patterns during Astral Foods’ 2019 financial year, together with high levels of poultry imports, resulted in average poultry selling prices below that of the comparative period.”

Industrial action at its KwaZulu-Natal operations, load-shedding, and a disruption of water supply at a processing plant in Mpumalanga had added additional pressure, it said.

The poultry sector has very weak pricing power due to a lack of consumer spending, Small Talk Daily's Anthony Clark said, although the company's 2020 results should show improvement. This should primarily be seen in its second half, should SA have a better maize harvest, he said.

At about R151 per share, Astral is undervalued, Clark said, adding that “once the market has digested the results, and if the forecast for the maize harvest is confirmed, Astral could be a good earnings and share price recovery story”.

At 3pm, Astral's share price was up 0.66% to R152, paring its year-to-date loss to 4.96%.

In a separate announcement, Astral said its CEO, Chris Schutte, had returned to work, having undergone surgery in August. Schutte had made a good recovery and has resumed all of his responsibilities, the company said.
Business Live 

Related News

Chinese spending hits record high on Singles' Day
13/11/2019 - 13:53
Chinese consumers spent a record amount on Alibaba platforms on Monday during the annual “Singles’ Day” buying spree, the world’s biggest 24-hour shopping event, which was launched with a glitzy show by US singer Taylor Swift.

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.

Dis-Chem warns of sharp decline in interim earnings
04/11/2019 - 09:50
Discount pharmaceutical retailer Dis-Chem expects a drop in half-year earnings due to one-off costs such as a change in bonus policy and a strike by employees.

Global wine output falls this year after bumper 2018
01/11/2019 - 11:17
Global wine production fell about 10% this year, with major producers France, Italy, and Spain hit the most by unfavourable weather conditions, according to a leading international body.

Clicks eyes further market share amid double-digit sales growth
24/10/2019 - 10:00
Medicine and beauty products retailer Clicks said it was successfully weathering an increasingly tough environment for consumers and would spend R718m on its stores over the next financial year in order to pursue additional market share.