Astral Foods and other South African poultry producers may bounce back with better results in 2024 after a “torrid” 2023, the financial newspaper Business Day reported.
Last year Astral, South Africa’s largest poultry producer, reported its first annual loss since listing on the Johannesburg Stock Exchange more than two decades ago.
The newspaper said that other listed poultry producers, such as RCL Foods and Quantum Foods, had suffered badly in 2023 and could also recover in 2024.
“While the operating backdrop remains challenging and uncertain with national elections on the horizon, Astral and other poultry producers are more likely to benefit from the low base set in 2023 when record power outages and decaying municipal infrastructure added to high production costs.
“The outbreak of avian flu was another negative feature in the industry over the past year, though the situation has since improved,” the newspaper said.
Rolling blackouts, water disruptions and bird flu cost Astral about R2bn in the year ended September.
“There are too many extraneous factors beyond its control that gives directionality to the company’s earnings despite management’s renowned farming and operational expertise,” Anthony Clark, an independent analyst at Smalltalkdaily Research, said in a note.
“If it’s not the volatility of the key soft commodities, it’s avian influenza and, in the last few years in SA, the crumbling state-owned infrastructure of electricity and water which are paramount to a time-sensitive large integrated poultry operation.”
