DURBAN - ASTRAL Foods yesterday rewarded its shareholders by declaring a final dividend of 775 cents a share for the year to the end of September, despite reporting a 14 percent decline in earnings, hurt by the Covid-19 outbreak and the closure of quick service restaurants (QSRs), which affected its poultry division.
The group said it successfully managed the impact of the hard lockdown period.
It said the cash saved by not having to pay an interim dividend, together with the well-managed funding resources, allowed it to remain in a cash-positive position during the financial year.
The integrated poultry producer reported a net surplus cash of R546 million at the end of the period, marginally down from last year’s R555m.
Its headline earnings per share fell 14 percent to 1 441c, and profits declined 13 percent to R561.23m.
However, revenue increased 4.6 percent to R14.1 billion, with the poultry division contributing 79 percent to group revenue, the feed division contributing 17 percent, and other Africa division contributing 4 percent.
The group said operating profit decreased 5 percent to R838m, but was up 8.5 percent in the first half of the year before Covid-19 disruptions.
Chief executive Chris Schutte said the group continued to execute their simple yet resilient strategy, which once again assisted the group in navigating new challenges brought on by the Covid-19 pandemic.
“Astral can proudly report satisfactory results, with all its integrated operations continuing to run like clockwork during South Africa’s hard lockdown,” Schutte said.
The poultry division reported a 4.3 percent increase in revenue to R11.3bn, with trading conditions reflecting a distinct difference between the two halves of the financial year.
“The hard lockdown implemented from March 26 had a significant impact on the South African poultry market. The complete shutdown of hospitality services, restaurants and QSRs, accounting for 20 percent of local poultry consumption, together with slower fresh sales, led to a substantial oversupply of chicken in the frozen categories,” the group said.
The feed division reported a 6.2 percent increase in revenue to R7bn as a direct result of higher selling prices on the back of the increase in raw material costs while revenue in other Africa division was only up by 0.6 percent to R482m.
Looking ahead, Schutte said they are expecting trading conditions to remain challenging, given the unprecedented high unemployment rate and the severely constrained discretionary disposable income.
“Although South Africa reported an above average maize crop for the 2020/21 season, raw material input costs are currently higher on the back of a weaker local currency, global weather concerns, international coarse grain demand from China and a rally in international prices, which have led to higher feed prices into the first half of 2021,” he said.
Astral shares rose 1 percent to close at R131 on the JSE yesterday.
BUSINESS REPORT