Conditions toughen for Astral


Conditions toughen for Astral

Published Date: 2019-02-06 | Source: Stephen Gunnion | Author: Stephen Gunnion

Conditions toughen for Astral

The poultry producer says like many retailers it has been at the receiving end of constrained consumer spending.

Astral Foods has warned shareholders to expect a dip in first-half earnings due to rising maize prices and lower selling prices for its chickens.

In an operational update, the poultry producer said operating profit for the first quarter of its financial year was much lower than the corresponding period a year earlier, when it benefitted from low feed costs following a record maize crop and stronger selling prices for poultry products after Avian Influenza resulted in a shortage of broiler chickens.

When it presented last year's results in November, Astral cautioned that raw material prices were in an upward trend and consumer disposable income was under pressure.

The group said consumer spending in the three months to end-December was disappointing and in line with reports from a number of retailers. Together with high poultry stock levels at the end of its last financial year in September, it said average selling prices were lower than a year earlier. However, it said it was continuing with the expansion of its Festive chicken processing plant in Midrand, which would provide more capacity for value-added and fresh products, where supply has been constrained in the past. It expects to complete the initial phase of the project next year.

Its shares fell 0.2% to R156.12 yesterday.

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