Poultry producer says the results were due to its inability to recover record high feed prices and a loss in sales volumes ‘under extremely difficult market conditions’
Astral Foods slashed its interim dividend by more than half as it battled elevated feed costs and new regulations that limited the brining of chicken.
The poultry producer has cut its interim dividend to R1.80 per share in the six months to March, from R3.90 in the year-earlier period as its net profit dropped 54% to R136.06m.
“These results are predominantly attributable to the inability to fully recover record high feed prices and a loss in sales volumes in both divisions under extremely difficult market conditions,” Chris Schutte said on Monday in a statement, referring to the main poultry and feed divisions.
Astral fended off higher feed costs as a result of a drought, which pushed up grain prices such as maize and soya.
Group revenue was down 1% to R5.79bn as feed and poultry sales volumes dropped, with the latter affected by new brining legislation.
Furthermore, Astral had to contend with poultry imports that it said equated to an average of 8.2-million birds a week during the review period despite efforts to curb poultry dumping.
In December, the government slapped a 13.9% safeguard duty on EU bone-in chicken portions, which the poultry industry has described as inadequate.
By Andries Mahlangu
First published in Business Day on 15 May 2017