Poultry group Astral Foods has again confirmed that it will report its first-ever annual loss since 2001 listing on the JSE in November.
The company, valued at about R6.2bn on the JSE, on Tuesday provided greater guidance in a trading statement, saying that its headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, will fall 145%-155% year on year from a 2,762c profit to a loss of between 1,243c and 1,519c and earnings per share (EPS) by the same margin from 2,781c to a loss of 1,251c-1,529c.
In September, the group, which is one of SA’s largest chicken producers, said the loss came in part after spending R1.9bn on load-shedding related costs including feeding birds it could not slaughter on time.
It added at the time that it was selling chickens at a loss of R3/kg as it could not increase prices to recover high costs of feed and diesel because of delays in slaughtering. These costs include paying overtime to employees to deal with the backlog at abattoirs.
Consumers buy less chicken if prices rise too much as they look to save money where they can amid high inflation and interest rate hikes, with food inflation remaining higher than overall consumer inflation.
At the moment, Astral is spending about R45m a month to run diesel generators needed at farms and abattoirs as it suffers from the fallout of state-owned power utility Eskom being unable to provide sufficient energy for SA.
CEO Chris Schutte said at the time that this monthly spend will become an “embedded cost” as at least another two years of load-shedding is expected.
The local poultry industry is also contending with one of the worst bird flu outbreaks in SA’s history, resulting in extra costs for Astral and its competitors as they cull chickens in line with disease control measures.
The company expects to publish its annual results on November 20.
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