COVID-19 impacts Astral’s share earnings forecasts

As impacts of the pandemic continue to impact adversely its business as one of South Africa’s leading poultry companies, Astral Foods is forecasting significant year-on-year reductions in share earnings.

Yurii Bukhanovskyi | Bigstock
Yurii Bukhanovskyi | Bigstock

For South African poultry integrator, Astral Foods, the COVID-19 pandemic continues to impacts its bottom line significantly.

The firm has announced that earnings per share (EPS) and headline earnings per share (HEPS) for the first half of the current fiscal year are expected to be down by up to 45%. This is compared to the previous first-half, when both shares were 951 cents (ZAR; around US$0.064).

For the six months ending March 31, 2021, EPS and HEPS will each be a minimum of 523 cents, according to Astral.

Explaining its forecasts, the firm reports that performance for the current half-year is compared with that to March of 2020, before the pandemic arrived in South Africa. Throughout the latest half-year, COVID lockdowns have held back the country’s economy and consumer spending. At the same time, Astral was unable to pass on to customers its increased production costs that are attributed to significantly more costly feed.

Latest full-year results, AGM resolutions

According to its annual results for the last fiscal year published in November, Astral Foods generated lower profit before interest and tax, as well as profit before income tax year-on-year. This was despite an increase in sales of 4.6% to just over ZAR14.1 billion.

This reduction in Astral Foods’ overall profit was attributed to the relative weakness of the local currency, the rand, and to its effects on raw material costs.

At that time, the firm’s forecasts for 2021 were cautiously optimistic.

At the latest Annual General Meeting in early February, Astral Foods shareholders reacted with a low approval vote on ordinary resolutions relating to the group’s remuneration policy and its implementation. At 61.75% and 42.00%, respectively, the votes in favor of the two resolutions were well below the levels at the previous year’s meeting.

Expressing dismay at the low votes in favor, the company noted that the resolutions are of an advisory nature, and are non-binding.

More on Astral Foods

According to the Top Companies database from WATT Poultry, Astral Foods holds joint first place as the leading poultry meat producer in Africa. The firm’s annual output is reported as 260 million birds.

Astral Foods is an integrated poultry producer with several subsidiaries, including National Chicks, County Fair, Ross Poultry, Tiger Chicks, Tiger Animal Feeds and Provimi. The company is the largest producer of broiler chicks in South Africa, and the country’s second largest chicken processor.

Among its key activities are production of feed premixes and animal feeds, as well as broiler genetics, production and sale of day-old chicks and hatching eggs, integrated breeder and broiler production operations, abattoirs and the sale and distribution of various poultry brands. The firm has poultry operations in Mozambique, Swaziland and Zambia, as well as South Africa.

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