Quantum Foods warns of weaker earnings


Quantum Foods warns of weaker earnings

Published Date: 2019-03-15 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Quantum Foods warns of weaker earnings

The poultry and egg producer has warned of lower first-half earnings after a strong 2018 financial year.

Quantum Foods has warned of a sharp fall in first-half earnings, sending its shares as much as 4.1% lower yesterday. The profit warning follows a strong rise in earnings for the poultry and eggs business last year.

In a trading statement, Quantum said earnings and headline earnings per share for the six months to end-March would be at least 42% lower than the comparative period. It gave no reason for the decline.

Last year the group benefited from a big increase in the price of eggs due to the Avian Influenza outbreak in the country. At the same time, there was a big reduction in feed volumes required by its layer farms, while raw material costs were lower due to good maize and soybean meal harvests in 2017. In November, it warned that egg prices were expected to decrease due to the cyclical nature of the business. It said it would mitigate that to some extent through operational efficiencies within the group.

Its shares retraced some of their losses to close 1.7% down at R3.40.

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