Feed and poultry producer Quantum Foods became the second company in two days to warn that it will report a loss in its next results in part because of the bird flu crisis that is ravaging the country.
The company, valued at about R800m on the JSE, did not provide a definitive range in its trading statement on Friday as it plans to release another trading statement later, but warned that headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, will be “at least” 100% lower, meaning Quantum will report a loss.
“A highly pathogenic avian influenza (HPAI) outbreak has been detected at several of the company’s farms in Gauteng and the North West province,” it said.
“To date, this HPAI outbreak has affected approximately 1.5-million of the company’s layer and breeding stock. Shareholders are reminded that an HPAI outbreak also affected approximately 420,000 layer birds at the Lemoenkloof layer farm in the Western Cape in April 2023.”
The full extent of the impact remains unknown as it depends on how many eggs will be available for sale in the future, but Quantum estimates the value of the company’s birds affected to be about R106m.
“The impact of this further HPAI outbreak on the company’s operations to date appears to be confined to the northern parts of SA and the company’s operations in the Western Cape and the Eastern Cape are currently unaffected,” it said.
Astral Foods, SA’s largest chicken producer, said on Thursday it will report its first ever annual loss since listing in 2001 after it spent R1.9bn on load-shedding related costs including feeding birds it could not slaughter on time.
One reason is the bird flu resulting in extra costs for Astral and its competitors as they cull chickens in line with disease control measures.
Astral believes the outbreak is the worst in SA’s history and its cost so far has amounted to about R220m.
About a third of egg-laying chickens and a quarter of broiler-breeding chickens in SA’s poultry industry are dying from the virus or being culled.
The virus, new in SA and identified as H7N6, has spread from Mpumalanga, where it was detected in early June to Gauteng, parts of Limpopo and Rustenburg in North West.
With Katharine Child
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