Astral guides on earnings decline


Astral guides on earnings decline


Published Date: 2021-04-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

Astral guides on earnings decline

The poultry group has been affected by higher feed costs and constrained consumer spending, exacerbated by Covid-19.

Astral Foods has outlined just how big the decline in its first-half earnings will be as it suffers the impact of Covid-19 lockdowns on the economy and constrained consumer spending.

In a revised trading statement, the poultry group said earnings and headline earnings per share for the six months to 31 March would be between 35% and 40% below the 951c reported for the same period last year.

In a trading update last month, Astral warned the earnings would be up to 45% weaker. At the time, it said it had not been able to recover significant increases in feed costs in the selling prices of poultry products during the period. The comparative six-month period ran mostly before the outbreak of Covid-19 in South Africa a year ago.

Astral didn't pay an interim dividend last year but declared a final dividend in November after navigating the impact of the Covid-19 lockdown on its operations - assisted with the cash it saved by holding back on paying an interim dividend. Together with the careful management of its funding resources, it remained in a cash positive position throughout the period, ending its 2020 financial year with net surplus cash of R546 million.

Last year, the group also completed the R710 million expansion project at its Festive poultry processing plant in Olifantsfontein, which increased its capacity by 16% to 800,000 birds per week. The expansion forms part of the Poultry Sector Master Plan, aimed at supporting volume growth in the industry and ensuring that local production makes up a higher component of chicken consumption into the future.

Astral expects to release its interim results on 17 May. Its shares fell 1.6% to R140.65 yesterday.


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