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Imports a threat to Astral workers

Commodities
Johannesburg - Southern African leading integrated poultry producer Astral Foods said on Monday that total poultry imports remained at high levels despite the cutback from the EU as a result of avian influenza outbreaks in certain countries.

Chief executive Chris Schutte said total imports averaged 8.2 million birds a week for the six months to March, even though local producers and government had undertaken efforts to curb poultry dumping.

Schutte said a record inflow of total poultry imports was recorded in March at 66658 tons, with a high US poultry component coming into play.

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“As the local producers we have had numerous engagements with the Minister of Trade and Industry Rob Davies. Unfortunately we haven’t received positive feedback yet, but we remain hopeful that a solution would be found to save the local poultry industry,” said Schutte.

Read also: Astral expects a 60% drop in earnings 

In January another producer, Rainbow Chicken in Hammarsdale, reported that it had reduced its two-shift system to one and cut its workforce by nearly 1350. Schutte said Astral was doing all it could to avoid job losses.

“We are managing to keep our employees on their jobs for now, but if the situation doesn’t improve, we might be forced to go the Rainbow route,” Schutte said. “We had to cut back on the hours worked rather than closing some of our operations. But this means our employees are earning less money than before.”

Schutte said he hoped that Davies would come with positive news for the industry by the end of this month as the drought also had a negative impact on the whole agricultural sector in the country. “We have seen some good rains in the last months or so. This bodes well for the industry and a good maize crop is expected. The Crop Estimate Committee said we can expect a double-digit growth in maize produced as compared to 2016,” he said.

Astral Foods reported a significant decrease in profitability for the six months to March, with revenue down 1 percent to R5.79 billion in revenue from R5.82bn, while operating profit slid 51 percent to R212 million, down from R429m reported last year.

Headline earnings a share slowed by 54 percent to 356 cents as compared with last year’s 774c. The group declared an interim dividend of 180c a share, down from 390c as compared woth last year.

“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. The implementation of the new brining regulation resulted in the period not being directly comparable to the prior period’s results,” said Schutte.

The poultry division reported an increase of 0.4 percent in revenue to R4.46bn, impacted by lower sales volumes due to a combination of less meat sold and reduced brining levels.

Revenue for the feed division was also down by 0.4 percent to R3.45bn, on the back of an 8 percent decrease in feed sales volumes driven by lower internal sales resulting from broiler production cutbacks.

Astral shares dropped 0.58 percent on the JSE on Monday to close at R157.

BUSINESS REPORT ONLINE 

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