Astral Foods, South Africa’s leading poultry producer, warns that chicken prices might increase because of the impact of the Iran war on inputs such as diesel.
Speaking after the release of Astral’s half-year results this week, Astral CEO Gary Arnold told analysts that recent increases in the price of diesel had raised Astral’s diesel bill by R30 million a month.
News24 reported Arnold as saying Astral had so far absorbed rising costs because many of its consumers existed on social grants, but the company could not do so for ever. Based on current fuel prices, Arnold said a chicken price increase of up to 70c per kilogram was possible.
An end to the Iran conflict and a drop in fuel prices in the near term would stave off the need to hike chicken prices, Arnold said.
Astral produced very strong interim results, for the first half of its financial year to the end of March.
Revenue rose to R11.9 billion, an 11% increase over the same period last year. Profit before interest and tax was up 348% to R1.2 billion, while headline earnings per share rose 467% to 2 318 cents. Astral declared a dividend of 1 160 cents per share, a 427% increase.
Arnold said in a statement that “a number of stars aligned enabling this performance, underpinned by a strong demand for poultry, a softening in feed costs and great execution of Astral’s best cost strategy”.
