Quantum Foods says trading conditions have shown a significant improvement as it benefited from a recovery in its layer flock, an absence of load-shedding, relatively high egg selling prices and no bird flu outbreaks.
Releasing an update for the four months to end-January, the group said its layer farming and egg businesses continued to rebuild the layer flock.
The recovery of the layer breeding and layer rearing facilities from the 2023 and 2024 highly pathogenic avian influenza (HPAI) outbreaks made this possible.
In the previous period, HPAI had affected birds to the value of R37m.
“The higher volumes resulting from higher layer flock numbers contributed to improved farming efficiencies and cost recovery, and coupled with strong demand from external customers, saw increased earnings in the current period,” Quantum said in a statement on Monday.
The company’s egg supply was about 70% higher in the period. The margin contribution benefit of the higher egg volumes, continued high levels of operational efficiency at the egg-packing stations, effective cost management and improved overhead cost recovery outweighed the negative effect of a 13% decline in average egg selling prices, it said.
Total egg production in SA is steadily increasing as the national flock recovers from the 2023 and 2024 HPAI outbreaks. The SA Poultry Association forecasts national egg production to be at pre-2023 HPAI outbreak levels by mid-2025.
This increase in egg production is expected to result in a further decline in egg prices during the remainder of the financial year.
Quantum warned, however, that the risk of HPAI was expected to remain high for the remainder of the 2025 financial year, with an increased number of outbreaks reported recently in the US, Europe and North Africa.
“The stringent protocols for voluntary vaccination against HPAI published by the SA government remain prohibitive with, to the best of the company’s knowledge, no producers having been successful in their application to vaccinate poultry,” it said.
To mitigate this risk, the company maintained the strategy introduced in 2024, which involves placing a reduced number of layers in higher-risk geographical areas and sourcing layer hatching eggs from a larger number of geographically diverse breeder farms compared with the protocol that was in place before the 2023 HPAI outbreaks.
Quantum said the operational and financial performance of the broiler farming business was satisfactory in the first four months.
The company has started projects to convert a broiler farm and a layer rearing farm in Gauteng to broiler breeder farms. These projects, once completed, will increase hatching egg production volumes in the vicinity of the Hartbeespoort hatchery and therefore reduce the number of hatching eggs required to be transferred to this facility from the Western Cape.
This will result in lower logistics costs and is expected to improve efficiencies.
Total day-old chick production increased by 6% compared with the previous period.
Live broiler volumes supplied during the current period decreased by about 2% due to a slight reduction in placement volumes and a marginal decline in the average weight of broilers supplied.
The feed business delivered a satisfactory operational and financial performance, supported by a recovery of volumes, particularly from the Pretoria feed mill, it said.
Total feed volumes increased by about 21%.
Repairs to the Malmesbury feed mill intake area, which was damaged during the explosion in June 2024, were completed in December.
The project to expand production capacity at the Malmesbury feed mill is progressing and remains on track, with production scheduled to commence in the second quarter.
In its African operations, Quantuam said trading conditions in Zambia remained challenging as drought conditions continued, but conditions in Uganda remained favourable, with lower feed costs supporting higher demand for day-old chicks and improved margins from the Masindi egg business.
Operations in Mozambique were sporadically affected by protest action after the Mozambican election last year.
On December 26, a crowd stormed the layer farm and looted about 16% of the layer birds. “Fortunately, no injuries to staff members were reported and operations were able to resume soon after the incident. However, the lost egg production resulting from the incident will negatively impact earnings from this business during [the 2025 financial year].”
The financial impact was relatively minor and the egg business continued to perform well, with selling prices supported by lower availability of eggs in the market, satisfactory efficiencies and cost management.
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